Understanding API Gateway Pricing: Maximizing Features While Minimizing Costs
Tags: api, apigateway, price
Published: 2024-07-10 06:00:00

Filtering and segmenting traffic to and from your app is critical to the consistent safety of your software development lifecycle, and finding the right API Gateway is just as important. Let’s look through the key components of an API gateway and the different ways companies tend to price them.

What is an API Gateway?

An API Gateway acts as a critical checkpoint in your infrastructure where you can place barriers and rules for APIs connecting to your [microservices](https://www.getambassador.io/blog/creating-a-microservice).

When comparing API Gateway products you’ll see a consistent set of features that solve for the need of improving security to and from your [microservices](https://www.getambassador.io/blog/creating-a-microservice), ideally without introducing latency. Here are some of the main features that impact the structure and cost of those products.

## 4 Key Components of API Gateway Pricing

**Request Thresholds:** Typically identified as the amount of requests your API gateway can handle per second, this is a key factor in keeping your APIs working without lag.
**Common Features: **Rate Limiting, Load Balancing, Routing
**Security**: Your API gateway is the primary barrier between your [microservices](https://www.getambassador.io/blog/creating-a-microservice) and traffic coming in from anyone and anywhere. Make sure your metaphorical bouncer is buff with tools to turn away malicious users.
**Common Features:** WAF, IP Whitelisting, Rate Limiting
Performance and Scalability: Improve your ability to control, manage, and expand your API Gateway as your organization grows.
**Common Features:** SSO, Automatic HTTPS, Air-Gapped capabilities, Dev Portal
**Support and Maintenance Services:** When problems arise, is there anyone out there (besides that one Reddit thread from three years ago) who can help you in real time? Is the gateway you chose native to your microservices environment, making it simpler to maintain? And if you’re considering an open source project - is that project actively maintained?
**Common Features:** community site, Support portal, dedicated Customer Service representative, Service Level Agreements (SLA)

## How to Compare API Gateway Pricing Models

Comparing pricing of the API Gateway products you are assessing comes down to two major comparisons: [freemium](https://www.getambassador.io/edge-stack-pricing) vs paid packages and flat rate vs usage-based pricing.

Understanding your current API usage to your microservices is what you’ll need to know in order to identify the right type of plan. We’ll get into some detailed examples below.

## How to Compare API Gateway Pricing Models

**Flat Rate vs. Usage-Based
**Like other flat-rate vs usage-based product products, the choice between flat rate and usage-based pricing should be based on long-term cost efficiency. Analyze your average yearly metrics for API requests to your microservices - do they vary greatly from month to month? Would a flat-rate package limit your usage, cutting off access to your API gateway if you meet your limit too soon? Is the usage limit based on monthly usage or a larger increment? All of the answers to these questions are going to impact the amount you’ll spend.

## OSS vs [Freemium](https://www.getambassador.io/edge-stack-pricing) vs Paid Packages

Open-source software (OSS) can be a useful starting point, but may not be advantageous in the long run. OSS updates aren't guaranteed—this could seriously compromise your company's security and traffic management using an API Gateway. On the other hand, [freemium](https://www.getambassador.io/edge-stack-pricing) is the perfect option for initially testing an API gateway, especially suitable for smaller products.

These versions typically offer a very limited version of a paid product, without any of the bells and whistles that companies sometimes require (like SSO or RBAC availability). Spend your time seeing what the freemium versions offer, and compare that list to your security needs and your usage needs. When the discrepancy between what you need and what freemium can offer you begins to expand, it’s time to start looking at a paid version.

## Reducing Costs While Maximizing Value from Your API Gateway

There’s a good chance that if you’re here, you’re vetting what you need from an API gateway within your infrastructure. So let’s talk about ways to strategize so you can get the right product at the right price – without compromising on features.

When you’re calculating costs for your potential [API gateway](https://www.getambassador.io/products/edge-stack/api-gateway), it is beneficial to understand your needs on a monthly and a yearly basis. Building out a quick spreadsheet calculator to assess the costs between each feature is something worth considering due to the complexities that come with [API Gateway](https://www.getambassador.io/products/edge-stack/api-gateway) pricing.

You will be able to plug in each pricing factor, using the best guess of any variable costs based on historic averages to gather total estimates for your needs. This will allow for a concentrated comparison between products based on the total annual cost – regardless of the pricing mode, highlighting each of your must-have features (like WAF or Kubernetes native with [Edge Stack](https://www.getambassador.io/products/edge-stack/api-gateway)) to your nice-to-have features.

When it comes down to the final decision, cost will always be a factor – something that does not go unnoticed especially in this economic climate. Ultimately, the best method to reduce your costs while maximizing value from your API gateway will be carving out the right budget for what you need to start and grow from there.