Total Economic Impact
Cost Savings And Business Benefits Enabled By Azure API Management
A FORRESTER TOTAL ECONOMIC IMPACT STUDY COMMISSIONED BY Microsoft, MAY 2025
Total Economic Impact
A FORRESTER TOTAL ECONOMIC IMPACT STUDY COMMISSIONED BY Microsoft, MAY 2025
APIs are key to business strategy and enable modern businesses to function successfully.1 Furthermore, AI is fundamentally changing the digital user experience and how organizations create and consume APIs.2 As a result, to drive a high-value API program, Forrester recommends investing in the right business leadership, operating model, and technology, including API management software.3 Organizations can use solutions like Azure API Management to organize catalogs of APIs for developer engagement and onboarding, manage relationships with API users, create new API-based digital products and business models, and more.4
Azure API Management is a managed serviced by Microsoft that helps organizations publish, secure, monitor, and scale APIs in both cloud and hybrid environments with flexible, consumption-based pricing. It integrates deeply with Azure services and provides key scalable enterprise-grade capabilities, including request authentication, traffic management, developer engagement, and analytics. Azure API Center is a centralized catalog by Microsoft that helps organizations track, discover, and govern APIs no matter the type, lifecycle stage, or location with Azure API Management. Microsoft offers resources including documentation and support to help customers get started and succeed with Azure API Management to modernize legacy systems and enable intelligent and agentic apps.
Microsoft commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Azure API Management.5 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Azure API Management on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed eight decision-makers from seven organizations with experience using Azure API Management. For the purposes of this study, Forrester aggregated the experiences of the interviewees and combined the results into a single composite organization that is a global business based in North America with revenue of $1 billion per year.
Interviewees said that prior to using Azure API Management, their organizations typically had legacy integration systems or other API management software or they were starting API programs from scratch. Their organizations were also often in the process of modernizing their API programs and architectures. However, prior attempts yielded limited success, leaving them with challenges including high costs, security concerns, discovery and experience issues, productivity roadblocks, and legacy system limitations. These limitations hindered organizational success.
The interviewees said that after the investment in Azure API Management, their organizations were able to modernize their API programs and prepare for AI and the future. Key results from the investment include improved productivity across the entire API lifecycle, improved reuse, faster time to market, legacy cost savings, strengthened security, improved visibility and governance, synergies and efficiencies with the Microsoft ecosystem, and more.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Improved API development productivity that allows the organization to create APIs 30% more efficiently and configure API policies 50% more efficiently. The composite organization boosts developer productivity with Azure API Management. Its developers save more than a week of time when creating an API and more than an hour when configuring an API policy, and they can reallocate these time savings to other value-add work. Over three years, this benefit is worth $679,000 to the composite organization.
Improved API reuse of 5% or more. With Azure API Management and Azure API Center, the composite organization increases its reuse of APIs and API policies. It consolidates and tracks all the APIs it creates, which improves discovery and allows its developers to reuse APIs and API policies instead of creating new ones. Over three years, this benefit is worth $352,000 to the composite organization.
Improved API management and support productivity of 80%. The composite organization realizes productivity improvements throughout the API lifecycle, including when managing and supporting the APIs it creates. Compared to its prior legacy environment, the composite saves more than 12 hours per API per year. The composite’s API platform engineers then recapture this time spent on management and support and can refocus it on business growth. Over three years, this benefit is worth $370,000 to the composite organization.
Accelerated operating profit from a faster time to market of 50%. Instead of taking three months to bring an API initiative to market, the composite organization does this twice as fast in 1.5 months with Azure API Management. Because the developers and IT professionals work more efficiently, the composite earns additional months of recurring revenue and achieves its API-related business goals more quickly. Over three years, this benefit is worth $1.5 million to the composite organization.
Cost savings of $190,000 or more per year. By adopting Azure API Management and modernizing, the composite organization progressively retires and consolidates legacy hardware and software. This yields cost savings it can reinvest into other initiatives. Over three years, this benefit is worth $568,000 to the composite organization.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
Strengthened security. The composite organization secures its APIs across cloud and hybrid environments at scale with Azure API Management. Compared to its prior legacy environment, the composite is more secure.
Support, documentation, and feedback opportunities. Microsoft provides the composite organization with support and documentation to help it successfully adopt and use Azure API Management. Furthermore, the composite shares feedback with Microsoft to influence the continued evolution of the solution.
Enhanced developer and engineer experience. The composite organization’s developers and engineers benefit from a better experience using Azure API Management as compared to the legacy environment. In addition to increased productivity, a better employee experience has broad-reaching benefits for the composite’s team.
Synergies and efficiencies with the Microsoft ecosystem. The composite organization benefits from the rest of the Microsoft ecosystem and the synergies between Azure API Management and other solutions (e.g., Microsoft Defender for APIs, Azure OpenAI Service, Copilot). These synergies help the composite organization operate more efficiently and build better solutions.
Improved API resilience. The composite organization optimizes the performance and reliability of its APIs with Azure API Management and realizes less downtime compared to its prior legacy environment.
Improved visibility and governance of AI consumption. The composite organization uses Azure API Management as a comprehensive AI gateway to better govern AI usage, track AI consumption and costs, maintain low and consistent latencies, and apply safeguards. This helps AI and app developers to manage and consume generative AI APIs more efficiently, leading to cost savings while building intelligent and agentic apps.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
Microsoft Azure API Management costs of $524,000. The composite organization pays for Azure API Management at the Premium V2 tier. It also purchases gateways at the workspace gateway premium tier and API Center. Because it purchases the Premium V2 tier, it has unlimited API requests per month.
Implementation and ongoing management costs of $244,000. The composite organization invests the necessary labor to adopt Azure API Management and manage it on an ongoing basis. This work helps the composite retire its legacy systems, modernize its architecture, and maintain and manage its investment post-adoption.
Training costs of $66,000. To effectively use Azure API Management, the composite organization’s API developers and API engineers commit sufficient time to learn the solution and keep their knowledge up to date post-adoption.
The financial analysis that is based on the interviews found that a composite organization experiences benefits of $3.5 million over three years versus costs of $834,000, adding up to a net present value (NPV) of $2.6 million and an ROI of 315%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
| Role | Industry | Region | Revenue | Employees |
|---|---|---|---|---|
| Cloud data architect and design manager | Consumer goods | Global | $50 billion+ | 100,000+ |
| Director of cloud enablement | Financial services | Global | $50 billion+ | 35,000+ |
| Principal architect | Manufacturing | Global | Undisclosed | 35,000 |
| Senior engineering manager | Financial services | APAC | Undisclosed | 4,000 |
| Director of data platforms and services | Financial technology | North America | $500 million+ | 2,000 |
|
ICT head Team lead |
Manufacturing | Global | $100 million+ | 1,000 |
| Senior vice president | Financial technology | North America, EMEA | $50 million+ | 200 |
Before adopting Azure API Management, the interviewees’ organizations either had legacy integration systems or other API management software or they were starting their API programs from scratch. Additionally, many of the interviewees’ organizations were in the process of modernizing their business and API programs to set up for AI and the future.
Interviewees noted how their organizations struggled with common challenges, including:
Costs. Interviewees told Forrester that managing APIs in their organizations’ prior environments was expensive. Costs were increasing, and this drove their organizations to explore new options. The senior engineering manager for a financial services organization said: “We had overhead because we decided to self-host [our prior solution]. We had to hire three full-time employees to maintain it and make sure it was compliant and security-approved.” The interviewee also noted: “When we reviewed [our prior solution], we realized that the pricing model had been changed as well. … [The SaaS version of our prior solution] was 50% more costly. … It was a very easy decision for us [to switch to Azure API Management] because, first, we were struggling, and, second, we were paying more for our struggles.”
Security. Interviewees noted that their organizations lacked visibility and control before using Azure API Management. The director of cloud enablement for a financial services organization said that because their company is in a regulated industry, it needs to meet API security requirements for its work with banks, which presented some challenges with the prior environment. They said: “There was no central place to govern API exposure. There was a security vulnerability. Security had concerns. We quickly selected API management software, and that’s why we have Azure API Management.”
Discovery and experience. Developers at the interviewees’ organizations struggled to find and reuse APIs. The director of data platforms and services for a financial technology organization said: “It was extremely hard to integrate with us. Even if a customer developed an integration with one of our platforms, almost nothing could be reused to go to a different platform.” The senior vice president for a financial technology organization said, “The adoption [of our products] was limited and slow.”
Productivity. Interviewees’ organizations faced roadblocks as API complexity slowed down teams. The senior engineering manager for a financial services organization said, “There are ways of measuring the productivity of our developers, and we were falling behind in all of them.”
Legacy system transformations. Interviewees explained how their organizations’ legacy systems simply couldn’t keep up with their needs and growing ambitions. Furthermore, their organizations were often transforming and desired to evolve their API programs and consolidate their APIs. This served as a driver in their decision-making processes as they decided to evaluate, select, and use API management software.
API Management Software
Forrester defines API management software as a foundation for establishing, managing, and securing digital business relationships via direct applications connections within and between organizations and individuals, centering first on REST APIs but extending to encompass any means of digital connection.6
The interviewees said their organizations evaluated various API software management solutions and chose Azure API management for its:
Cost-effectiveness.
Enterprise-grade security and governance.
Flexibility.
Ease of use.
Comprehensive functionality.
Cloud-based design and deep Azure integration.
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the interviewees’ organizations, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a global business based in North America with $1 billion in annual revenue. It has 40 API developers and platform engineers, develops 120 APIs or more per year, and has 10 API initiatives that generate monthly recurring revenue each year.
Deployment characteristics. The composite organization begins using Azure API Management in Year 1 following a three-month implementation period. It starts using three units in Year 1 along with three gateways. It then scales this use to five of each in Year 2 and six of each in Year 3 as its usage and benefits grow. A unit has a certain request processing capacity depending on the chosen tier.
$1 billion annual revenue
40 API developers and engineers
120+ APIs developed per year
10 API initiatives that generate monthly recurring revenue each year
3+ Azure API Management units and gateways
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Improved API development productivity | $179,091 | $298,485 | $358,182 | $835,758 | $678,599 |
| Btr | Improved API reuse | $26,625 | $119,595 | $304,967 | $451,187 | $352,169 |
| Ctr | Improved API management and support productivity | $52,884 | $146,608 | $267,560 | $467,051 | $370,261 |
| Dtr | Accelerated operating profit from a faster time to market | $600,000 | $600,000 | $600,000 | $1,800,000 | $1,492,111 |
| Etr | Cost savings | $161,500 | $246,500 | $289,000 | $697,000 | $567,667 |
| Total benefits (risk-adjusted) | $1,020,099 | $1,411,188 | $1,819,709 | $4,250,996 | $3,460,807 |
Evidence and data. Interviewees told Forrester their organizations gained the ability to develop and consume APIs faster with Azure API Management.
The director of data platforms and services for a financial technology organization said: “[Our team] develops much faster. First, there is a lot they don’t need to do anymore. …[Second, there is] the unification. We have most of the base components on the API specification and all the base data structures ready now. … We are seeing a 30% increase in productivity.”
The principal architect for a manufacturing organization said it previously took three to four weeks for their company to develop an API. But with Azure API Management, the organization can develop an API in a week, which is up to 75% faster than before. They also noted their organization is now able to develop API policies faster: “We started adopting fragments with Azure API Management. A move to reusable components has helped save 50% of the time. If I would have spent 3 hours building the policy, I can now do it in half the time.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization develops 120 APIs in Year 1, 200 APIs in Year 2, and 240 APIs in Year 3.
Before using Azure API Management, it took 160 hours for the composite organization to develop an API and 3 hours for it to develop an API policy.
With Azure API Management, the composite organization is 30% more productive when developing APIs and 50% more productive when creating API policies.
The composite organization’s API developers recapture 50% of this time for productive work.
The average fully burdened hourly rate for an API developer is $67.
Risks. This benefit may vary depending on:
The scale of an organization, its API program, and the resulting number of APIs it develops per year.
The prior state of an organization, including how much time it takes to develop APIs and API policies.
An organization’s change management capabilities and how well it is able adopt Azure API Management and reduce the time to develop APIs and API policies.
The team members engaged in this work and their pay rates.
How well an organization recaptures these time savings and what new activities the team can engage in.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $679,000.
API development productivity improvement with Azure API Management
Time saved on API development with Azure API Management in Year 3
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | APIs developed | Composite | 120 | 200 | 240 | |
| A2 | Time to develop an API before Azure API Management (hours) | Composite | 160 | 160 | 160 | |
| A3 | API development productivity improvement with Azure API Management | Interviews | 30% | 30% | 30% | |
| A4 | Time to develop an API policy before Azure API Management (hours) | Composite | 3 | 3 | 3 | |
| A5 | API policy development productivity improvement with Azure API Management | Interviews | 50% | 50% | 50% | |
| A6 | Subtotal: Time saved on API development (hours) | A1*(A2*A3+A4*A5) | 5,940 | 9,900 | 11,880 | |
| A7 | Productivity recapture rate | TEI methodology | 50% | 50% | 50% | |
| A8 | Average fully burdened hourly rate for an API developer | Composite | $67 | $67 | $67 | |
| At | Improved API development productivity | A6*A7*A8 | $198,990 | $331,650 | $397,980 | |
| Risk adjustment | ↓10% | |||||
| Atr | Improved API development productivity (risk-adjusted) | $179,091 | $298,485 | $358,182 | ||
| Three-year total: $835,758 | Three-year present value: $678,599 | |||||
Evidence and data. Interviewees told Forrester that in addition to developing APIs and API policies more quickly, their organizations’ developers and engineers were able to more easily discover and reuse existing APIs and API policies. The director of cloud enablement for a financial services organization explained: “There are time savings by going to the developer portal, looking at what APIs exist, testing them out, and incorporating those APIs into development. … We don’t need to create new policies [as often] because we reuse them.”
As the interviewees explained, this yielded time savings from not having to redevelop an API or API policies. The organizations could then reallocate this time to developing other APIs or other value-add work.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Seventy-five percent of the APIs the composite organization develops are reusable.
With Azure API Management, the composite organization reuses 5% of these APIs in Year 1. This increases to 10% of APIs in Year 2 and 15% of APIs in Year 3.
With Azure API Management, the composite organization reuses 50% of the API policies it creates each year.
The composite organization’s API developers recapture 50% of this time for productive work.
The average fully burdened hourly rate for an API developer is $67.
Risks. This benefit may vary depending on:
The scale of an organization, its API program, and the resulting number of APIs and API policies that could be reused each year.
The characteristics of an organization’s APIs and API program and the number of APIs and API policies that could be reused each year.
An organization’s change management capabilities and how well it can adopt Azure API Management and increase its reuse of APIs and API policies.
The prior state of an organization, including how much time it takes to create APIs and API policies without Azure API Management.
The team members engaged in this work and their pay rates.
How well an organization recaptures these time savings and what new activities the team can engage in.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $352,000.
Percent of APIs reused with Azure API Management
Time saved with API and API policy reuse with Azure API Management in Year 3
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | APIs developed | A1 | 120 | 200 | 240 | |
| B2 | Percent of APIs that are reusable | Composite | 75% | 75% | 75% | |
| B3 | Subtotal: APIs available for reuse | (B1*B2)+B3PY | 90 | 240 | 420 | |
| B4 | Percent of APIs reused with Azure API Management | Composite | 5% | 10% | 15% | |
| B5 | Subtotal: APIs reused | B3*B4 | 5 | 24 | 63 | |
| B6 | Percent of API policies reused with Azure API Management | Interviews | 50% | 50% | 50% | |
| B7 | Subtotal: API policies reused | B3*B6 | 45 | 120 | 210 | |
| B8 | Time to develop an API before Azure API Management (hours) | A2 | 160 | 160 | 160 | |
| B9 | Time to create an API policy before Azure API Management (hours) | A4 | 3 | 3 | 3 | |
| B10 | Subtotal: Time saved with API and API policy reuse (hours) | (B5*B8)+(B7*B9) | 935 | 4,200 | 10,710 | |
| B11 | Productivity recapture rate | TEI methodology | 50% | 50% | 50% | |
| B12 | Average fully burdened hourly rate for an API developer | Composite | $67 | $67 | $67 | |
| Bt | Improved API reuse | B10*B11*B12 | $31,323 | $140,700 | $358,785 | |
| Risk adjustment | ↓15% | |||||
| Btr | Improved API reuse (risk-adjusted) | $26,625 | $119,595 | $304,967 | ||
| Three-year total: $451,187 | Three-year present value: $352,169 | |||||
Evidence and data. Interviewees told Forrester that prior to adopting Azure API Management, their organizations spent significant time managing and supporting the APIs they created. But they said with Azure API Management, their organizations’ developers and engineers were able to more efficiently manage and support the APIs they created. This resulted in time savings that allowed employees to focus on more value-added tasks that lead to greater organizational success.
The director of data platforms and services for a financial technology organization explained how their company was able to enable self-service support for its API customers. They noted that, as a result, the client integration support team is expected to improve productivity by 60%.
Similarly, the senior engineering manager for a financial services organization said: “Because of the developer portal and because Azure API Management is a cloud resource and everyone has read access to it, they can troubleshoot themselves.” In addition to the troubleshooting time savings with developer self-service, the interviewee also noted that Azure API Management helped their team by providing greater visibility into incidents. They said, “These three people were constantly overworked [with our prior solution], whereas in Azure API Management, we can give logs directly to developers.” The interviewee said that as a result of adopting Microsoft’s solution, they were targeting at least 10 times less intervention from the central team so that these three team members were then able to refocus their time on more value-added tasks.
The team lead for a manufacturing organization said their team became significantly more productive when supporting APIs and integrations as compared to the legacy on-premises systems. They noted their team did not need to do any customization to monitor their APIs: “In terms of efficiency, we are at least 10 times better today than before.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Before using Azure API Management, each API required 16 hours per year to manage and support.
With Azure API Management, the composite organization saves 80% of this time.
The composite organization’s API platform engineers recapture 50% of this time for productive work.
The average fully burdened hourly rate for an API platform engineer is $77.
Risks. This benefit may vary depending on:
The scale of an organization, its API program, and the resulting number of APIs to manage and support.
The prior state of an organization, including how much time it took to manage and support an API without Azure API Management.
An organization’s change management capabilities and how well it is able adopt Azure API Management and reduce the amount of management and support time per API.
The team members engaged in this work and their rate of pay.
How well an organization recaptures these time savings and what new activities the team can engage in.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $370,000.
Improved API management productivity with Azure API Management
Time saved on API management and support with Azure API Management in Year 3
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | APIs developed | A1 | 120 | 200 | 240 | |
| C2 | Subtotal: Cumulative APIs managed and supported | C1+C2PY | 120 | 320 | 560 | |
| C3 | Time to manage and support an API before Azure API Management (hours) | Composite | 16 | 16 | 16 | |
| C4 | Improved API management productivity with Azure API Management | Interviews | 80% | 80% | 80% | |
| C5 | Subtotal: Time saved on API management and support (hours) | C2*C3*C4+B5*C3 | 1,616 | 4,480 | 8,176 | |
| C6 | Productivity recapture rate | TEI methodology | 50% | 50% | 50% | |
| C7 | Average fully burdened hourly rate for an API platform engineer | Composite | $77 | $77 | $77 | |
| Ct | Improved API management and support productivity | C5*C6*C7 | $62,216 | $172,480 | $314,776 | |
| Risk adjustment | ↓15% | |||||
| Ctr | Improved API management and support productivity (risk-adjusted) | $52,884 | $146,608 | $267,560 | ||
| Three-year total: $467,051 | Three-year present value: $370,261 | |||||
Evidence and data. Interviewees told Forrester that by improving productivity, their organizations were able to achieve faster time to market for their API-related initiatives. This means the organizations were able to complete their various initiatives faster and — depending on the nature of the initiatives — earn additional months of revenue and operating profit.
The director of cloud enablement for a financial services organization said: “The developer portal allows developers to know the API specifications, how to use APIs, and how to deploy APIs. When using Azure API Management, our regions develop twice as fast.”
The director of data platforms and services for a financial technology organization said: “I would say [my organization accelerated its time to market by] 30% to 40%. Azure API Management allows for much more efficient parallel working. That’s the main benefit.”
The senior vice president for a financial technology organization said: “Time to market is of the essence. … Each customer will take about six months for an implementation cycle. However, we can run it in parallel [with Azure API Management]. We can do [more] revenue.”
The principal architect for a manufacturing organization said: “Azure API Management has improved [my company’s time to market by] 60% to 70%. Azure API Management is one of our key systems now.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization has 10 new API initiatives per year that generate monthly recurring revenue.
Each new initiative results in $5 million of annual revenue and $600,000 of annual operating profit at a 12% operating profit margin.
Before using Azure API Management, each initiative had a three-month time to market.
With Azure API Management, the time to market is accelerated by 50%. This results in 1.5 months of additional revenue and operating profit per initiative.
Risks. This benefit may vary depending on:
An organization’s business model and API program.
How an organization generates revenue.
The scale of an organization, the size of its development team, the number of initiatives it engages in per year, and the size and nature of those initiatives.
An organization’s prior environment and time to market for an API initiative before using Azure API Management.
The change management capabilities of an organization and how well it can adopt Azure API Management.
Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.5 million.
Accelerated time to market with Azure API Management
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| D1 | Time to market before Azure API Management (months) | Composite | 3 | 3 | 3 | |
| D2 | Accelerated time to market with Azure API Management | Interviews | 50% | 50% | 50% | |
| D3 | Subtotal: Additional revenue time per API initiative (months) | D1*D2 | 1.5 | 1.5 | 1.5 | |
| D4 | API initiatives that generate monthly recurring revenue | Composite | 10 | 10 | 10 | |
| D5 | Revenue per API initiative | Composite | $5,000,000 | $5,000,000 | $5,000,000 | |
| D6 | Subtotal: Additional revenue from API initiatives | D3*D4*(D5/12 months) | $6,250,000 | $6,250,000 | $6,250,000 | |
| D7 | Operating profit margin | Composite | 12% | 12% | 12% | |
| Dt | Accelerated operating profit from a faster time to market | D6*D7 | $750,000 | $750,000 | $750,000 | |
| Risk adjustment | ↓20% | |||||
| Dtr | Accelerated operating profit from a faster time to market (risk-adjusted) | $600,000 | $600,000 | $600,000 | ||
| Three-year total: $1,800,000 | Three-year present value: $1,492,111 | |||||
Evidence and data. Interviewees’ organizations had varying prior states and used different hardware and software solutions to manage APIs and integrations. Interviewees explained that by adopting Azure API Management and modernizing, their organizations gained the opportunity to consolidate and retire this legacy software and hardware that was often more costly than Microsoft’s solution. The director of cloud enablement at a financial services organization said, “[Our prior API gateways] that were hosted on-premises [in each country] cost three times more than Azure API Management.” The organizations were then able to reinvest these cost savings elsewhere in the businesses.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization has legacy integration and API-related software and hardware costs from its prior environment. These costs are greater than the cost of Azure API Management.
As it adopts Azure API Management, the composite organization progressively retires its legacy hardware and software, leading to greater cost savings by Year 3.
Risks. This benefit may vary depending on:
An organization’s prior environment, including any software and hardware it uses to manage APIs and their costs.
An organization’s ability to successfully adopt Azure API Management and its ability to manage change and retire legacy hardware and software.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $568,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| E1 | Legacy costs saved | Composite | $190,000 | $290,000 | $340,000 | |
| Et | Cost savings | E1 | $190,000 | $290,000 | $340,000 | |
| Risk adjustment | ↓15% | |||||
| Etr | Cost savings (risk-adjusted) | $161,500 | $246,500 | $289,000 | ||
| Three-year total: $697,000 | Three-year present value: $567,667 | |||||
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
Strengthened security. Interviewees told Forrester their organizations became more secure with Azure API Management than they were in their prior states. The director of data platforms and services for a financial technology organization explained: “First, Azure API Management is a modern application. We can apply modern security mechanisms, and we have all the layers required for proper security. Second, we created a single door to get to the APIs. It increased our security posture. … [We are] twice as secure.”
Similarly, the senior engineering manager for a financial services organization told Forrester: “[My organization has] definitely [strengthened its security]. [The cybersecurity team] is very excited about Azure API Management, and it’s rare to say [that team] is excited about a solution. Our prior solution was difficult to update. [With Azure API Management,] we don’t have to worry about patching. Microsoft is responsible for keeping security patched. The monitoring is much better too, and the logs going to our SIEM (security information and event management) solution are more seamless because of direct integration into Sentinel. We only have good words from [the cybersecurity team] that Azure API Management is traceable and well-integrated already.”
Support, documentation, and feedback opportunities. Interviewees said they value the initial support Microsoft provided as their organizations adopted Azure API Management and the continued support provided as they use the solution. This includes public documentation and opportunities to share feedback and influence the product roadmap leading to an ever-improving solution. The director of cloud enablement for a financial services organization said, “Microsoft helped us to accelerate.”
The cloud data architect for a consumer goods organization said: “Microsoft helped us a lot. In fact, we had a dedicated API architect who was working with us as part of the whole initiative. Even from a support ticket perspective, they were able to solve whatever issues we had raised. … The Azure API Management team was able to coordinate with the Microsoft Entra team to figure out a solution for any authentication issues that we faced. We had a good experience overall working with Microsoft team.”
The senior engineering manager for a financial services organization said, “Microsoft has good training material.” Similarly, the principal architect for a manufacturing organization said, “The documentation was good.” The director of data platforms and services for a financial technology organization added: “We worked well with Microsoft. They also put us in contact with their product team, so we were able to start providing feedback and get some of that feedback implemented into the solution.”
Enhanced developer and engineer experience. Interviewees told Forrester that in addition to seeing quantifiable productivity-related benefits, their organizations also improved developer and engineer experiences while using Azure API Management. The cloud data architect and design manager for a consumer goods organization said, “From the development standpoint … it makes life easier.”
Synergies and efficiencies with the Microsoft ecosystem. Interviewees noted that in addition to the benefits realized with Azure API Management, their organizations realized broader benefits due to the solution’s place in the Microsoft ecosystem. For example, the director of data platforms and services for a financial technology organization said their company is using Copilot for policy generation. And interviewees said Copilot can also be used for policy explanation with Azure API Management.
The senior engineering manager for a financial services organization explained: “The seamless integrations are a major benefit. API Gateway just integrates with Azure API Management automatically. The integration to Azure Monitor is automatic. The SIEM logs are integrated to Sentinel.” The interviewees said these integrations resulted in additional value-add for their organizations by helping them operate even more efficiently.
Improved API resilience. Interviewees told Forrester their organizations’ APIs became more resilient with Azure API Management. This means downtime was reduced compared to their prior environments. The director of cloud enablement for a financial services organization explained, “We [can operate] without outages or downtime to customers.”
Improved visibility and governance of AI consumption. Interviewees told Forrester that with Azure API Management, their organizations were able to improve their visibility and governance of API use and AI consumption. This included rate limiting as they securely exposed generative AI APIs to their app and AI developers with the AI gateway capabilities of Azure API Management.
The cloud data architect and design manager for a consumer goods organization said: “We have enforced rate-limiting in our nonproduction environment. The rate limit helps us to control the usage pattern so that there is no excess usage with respect to the APIs.” However, the interviewee said this benefit extended beyond rate-limiting: “Azure API Management provides visibility and traceability. That helps us to see the usage pattern and take proactive steps to communicate to the consumers [of AI].” The interviewee estimated that as a result of this improved visibility and governance, their organization saw “at least a 20% to 30% marginal benefit” in driving more efficient AI consumption.
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Azure API Management and later realize additional uses and business opportunities, including:
New revenue streams. Interviewees told Forrester that by adopting Azure API Management, there are often opportunities to create new API-related revenue streams that did not exist before. This means their organizations can see extra revenue and operating profit, driving the ROI even higher. The director of data platforms and services for a financial technology company explained, “We now have a data stream where we are able to share data externally for a profit.”
Scalability. Interviewees told Forrester that Azure API Management helps give their organizations’ API programs greater scalability across regions, traffic levels, and hybrid environments. This includes supporting enterprise scale and meeting enterprise regulatory requirements. The director of cloud enablement for a financial services organization said: “Azure API Management is a managed service in the cloud. The scaling of Azure API Management allows us to accelerate API deployments [across our region]. … We have no plans to [stop using] Azure API Management.”
The cloud data architect and design manager for a consumer goods organization explained why Azure API Management was the right choice for their enterprise: “First, any issue that we have, we’ll be able to get quick support from the Microsoft team. Second, it does an auto scale-out. … [Azure API Management has been] sufficiently capable of handling our requirements.”
Preparing for the future. Interviewees detailed how their organizations modernized their legacy systems by adopting Azure API Management and said that with that modernization improvement, their companies are well-positioned for the future of APIs and AI. The senior engineering manager for a financial services organization said: “AI will change how we develop, how we deploy, and how we maintain. … This is the future.”
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Impact Approach).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ftr | Microsoft Azure API Management | $34,657 | $138,626 | $212,574 | $249,547 | $635,404 | $523,850 |
| Gtr | Implementation and ongoing management | $60,720 | $73,600 | $73,600 | $73,600 | $281,520 | $243,752 |
| Htr | Training | $26,496 | $15,898 | $15,898 | $15,898 | $74,189 | $66,031 |
| Total costs (risk-adjusted) | $121,873 | $228,124 | $302,072 | $339,045 | $991,113 | $833,633 |
Evidence and data. Interviewees explained that when their organizations chose to use Azure API Management, price was an important part of the decision-making process. It was not only a factor as a comparison point to other options, but interviewees explained that it was important to have pricing that is scalable and predictable. They also said they value how Microsoft offers managed gateways with Azure API Management, enabling their organizations to better manage and forecast their spending while realizing the solution’s benefits.
The director of cloud enablement for a financial services organization said: “[Azure API Management pricing] is very predictable because [Microsoft charges] by the number of instances and the ingress and egress. It can be estimated. We keep the Azure API Management cost within our budget.” They added: “The pricing model is not expensive because it [scales]. The costs are transparent in the Microsoft Cost Management portal.”
The director of data platforms and services for a financial technology organization said: “We are using managed gateways only. We wanted elasticity, and we didn’t want to deploy on-premises components.”
The cloud data architect and design manager for a consumer goods organization said: “[Azure API Management pricing] is based on the usage. Does it make sense? And are we able to predict the usage pattern and cost? Yes.”
Pricing may vary. Contact Microsoft for additional details.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization uses three Azure API Management Premium V2 units in Year 1. This increases to five units in Year 2 and to six units in Year 3.
Because the composite organization is using Premium V2 units, it receives an unlimited number of API requests per month.
The composite organization uses three Workspace gateway premium gateways in Year 1. This increases to five gateways in Year 2 and to six gateways in Year 3.
The composite organization purchases API Center.
The composite organization purchases and uses Azure API Management for a three-month implementation period.
Risks. This cost may vary depending on:
Microsoft’s pricing for Azure API Management.
The size and scale of an organization and its API program.
An organization’s use of Azure API Management.
Whether or not an organization purchases support from Microsoft.
Results. To account for these risks, Forrester adjusted this cost upward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $524,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| F1 | Units | Composite | 3 | 3 | 5 | 6 |
| F2 | API Management price per service per month | Microsoft | $2,801 | $2,801 | $2,801 | $2,801 |
| F3 | API Management scale-out price per additional service per month | Microsoft | $1,401 | $1,401 | $1,401 | $1,401 |
| F4 | Included API requests per month | Microsoft | Unlimited | Unlimited | Unlimited | Unlimited |
| F5 | Additional API requests per month | Composite | 0 | 0 | 0 | 0 |
| F6 | Price per additional 1 million API requests per month | Microsoft | $0.00 | $0.00 | $0.00 | $0.00 |
| F7 | Subtotal: API Management |
Initial: (F2+(F1-1)*F3+F5/1,000,000*F6)*3 months Y1-Y3: (F2+(F1-1)*F3+F5/1,000,000*F6)*12 months |
$16,809 | $67,236 | $100,860 | $117,672 |
| F8 | Gateways | Composite | 3 | 3 | 5 | 6 |
| F9 | Price per gateway per month | Microsoft | $1,400.01 | $1,400.01 | $1,400.01 | $1,400.01 |
| F10 | Subtotal: Gateway |
Initial: F8*F9*3 months Y1 - Y3: F8*F9*12 months |
$12,600 | $50,400 | $84,001 | $100,801 |
| F11 | API Center price per month | Microsoft | $698.975 | $698.975 | $698.975 | $698.975 |
| F12 | Subtotal: API Center |
Initial: F11*3 months Y1-Y3: F11*12 months |
$2,097 | $8,388 | $8,388 | $8,388 |
| Ft | Microsoft Azure API Management | F7+F10+F12 | $31,506 | $126,024 | $193,249 | $226,861 |
| Risk adjustment | ↑10% | |||||
| Ftr | Microsoft Azure API Management (risk-adjusted) | $34,657 | $138,626 | $212,574 | $249,547 | |
| Three-year total: $635,404 | Three-year present value: $523,850 | |||||
Evidence and data. Each interviewee’s organization had its own implementation process depending on its prior state, current API environment, and future API goals. For example, some organizations were modernizing their legacy systems to set them up for AI and the future, so this entailed simultaneously adopting other solutions (e.g., Azure Integration Services). Interviewees also explained how their organizations invested labor into managing the solution post-implementation to ensure they continued to realize value.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization implements Azure API Management in three months.
Four API platform engineers commit 33% of their time during those three months to the implementation.
Post-implementation, four API platform engineers commit 10% of their time to managing Azure API Management on an ongoing basis.
The average fully burdened annual salary for an API platform engineer is $160,000.
Risks. This cost may vary depending on:
The degree of labor required for implementation, as influenced by an organization’s prior state and goals.
The duration of an organization’s implementation, the number of team members involved in the implementation, and the percentage of time those team members commit to the implementation.
The number of team members involved in ongoing management and the percentage of time dedicated to these activities.
The average fully burdened salaries for the team members involved in the implementation and ongoing management.
Whether or not an organization elects to work with a third-party partner.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $244,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| G1 | Implementation time (months) | Composite | 3 | 0 | 0 | 0 |
| G2 | API platform engineers involved in implementation | Composite | 4 | 0 | 0 | 0 |
| G3 | Percent of time dedicated to implementation | Interviews | 33% | 0% | 0% | 0% |
| G4 | API platform engineers involved in ongoing management | Composite | 0 | 4 | 4 | 4 |
| G5 | Percent of time dedicated | Interviews | 0% | 10% | 10% | 10% |
| G6 | Average fully burdened salary for an API platform engineer | Composite | $160,000 | $160,000 | $160,000 | $160,000 |
| Gt | Implementation and ongoing management | (G1/12 months*G2*G3+G4*G5)*G6 | $52,800 | $64,000 | $64,000 | $64,000 |
| Risk adjustment | ↑15% | |||||
| Gtr | Implementation and ongoing management (risk-adjusted) | $60,720 | $73,600 | $73,600 | $73,600 | |
| Three-year total: $281,520 | Three-year present value: $243,752 | |||||
Evidence and data. Interviewees told Forrester their organizations invested time for their employees to learn Azure API Management. This included both initial training when first adopting the solution and often also included some minimal degree of ongoing effort to stay up to date with the solution and the organizations’ best practices. For some organizations, the training was on-the-job learning and, for other organizations, the training was more formal. Interviewees explained that as their organizations modernized their legacy systems and transformed their API programs, it was important to ensure their employees knew how to effectively use Azure API Management to maximize the value of the solution.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite organization trains 40 API developers and API platform engineers on Azure API Management. Each of these employees receives refresher training in subsequent years. Additionally, 10% of employees turn over each year, necessitating ongoing new training for new hires.
Each employee receives 8 hours of new training initially followed by 4 hours of refresher training per year.
The average fully burdened blended hourly rates for an API developer and an API platform engineer is $72.
Risks. This cost may vary depending on:
The size of an organization, the scale of its API program, and the resulting number of employees it needs to train on Azure API Management.
The prior knowledge of employees and the amount of time required for training.
An organization’s training programs and decisions.
The average fully burdened hourly rates for employees who require training.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $66,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 |
|---|---|---|---|---|---|---|
| H1 | Employees trained | Composite | 40 | 4 | 4 | 4 |
| H2 | Employees refreshed | H1 (initial) | 0 | 40 | 40 | 40 |
| H3 | Time for new training (hours) | Interviews | 8 | 8 | 8 | 8 |
| H4 | Time for refresher training (hours) | Interviews | 4 | 4 | 4 | 4 |
| H5 | Average fully burdened blended hourly rate for an employee who requires training | Composite | $72 | $72 | $72 | $72 |
| Ht | Training | (H1*H3+H2*H4)*H5 | $23,040 | $13,824 | $13,824 | $13,824 |
| Risk adjustment | ↑15% | |||||
| Htr | Training (risk-adjusted) | $26,496 | $15,898 | $15,898 | $15,898 | |
| Three-year total: $74,189 | Three-year present value: $66,031 | |||||
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($121,873) | ($228,124) | ($302,072) | ($339,045) | ($991,113) | ($833,633) |
| Total benefits | $0 | $1,020,099 | $1,411,188 | $1,819,709 | $4,250,996 | $3,460,807 |
| Net benefits | ($121,873) | $791,975 | $1,109,117 | $1,480,664 | $3,259,883 | $2,627,174 |
| ROI | 315% | |||||
| Payback | <12 months |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Azure API Management.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Azure API Management can have on an organization.
Interviewed Microsoft stakeholders and Forrester analysts to gather data relative to Azure API Management.
Interviewed eight decision-makers at seven organizations using Azure API Management to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Benefits represent the value the solution delivers to the business. The TEI methodology places equal weight on the measure of benefits and costs, allowing for a full examination of the solution’s effect on the entire organization.
Costs comprise all expenses necessary to deliver the proposed value, or benefits, of the solution. The methodology captures implementation and ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. The ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made unless other projects have higher NPVs.
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
Related Forrester Research
Top Recommendations For Development Leaders, 2025, Forrester Research, Inc., March 7, 2025.
Forrester’s Three-Pillar API Enablement Model: Implementing The Right Operating Model, Forrester Research, Inc., January 30, 2025.
Forrester’s Three-Pillar API Enablement Model: How To Build A Comprehensive API Platform, Forrester Research, Inc., December 13, 2024.
Buyer’s Guide: API Management Software, 2024, Forrester Research, Inc., September 20, 2024.
David Mooter, Introducing Forrester’s Three-Pillar API Enablement Model, Forrester Blogs, August 21, 2024.
Budget Planning Guide 2025: Technology Architecture And Delivery, Forrester Research, Inc., August 1, 2024.
High-Performance IT: The Essential Technology And Practices, Forrester Research, Inc., January 16, 2024.
API And Integration Data Overview: Forrester’s Developer Survey, 2023, Forrester Research, Inc., November 8, 2023.
The Total Economic Impact™ Of Microsoft Azure Integration Services, a commissioned study conducted by Forrester Consulting on behalf of Microsoft, July 2023.
Integration Usages Checklist, Forrester Research, Inc., March 23, 2022.
API Product Management Is Key For API Success, Forrester Research, Inc., October 1, 2021.
1 Source: The Forrester Wave™: API Management Software, Q3 2024, Forrester Research, Inc., July 1, 2024; What Digital Leaders Need To Know About API Trends, Forrester Research, Inc., January 9, 2024.
2 Source: The Future Of APIs And API Management, Forrester Research, Inc., May 2, 2024.
3 Source: Deliver A High-Value API Program With Forrester’s Three-Pillar API Enablement Model, Forrester Research, Inc., August 9, 2024.
4 Source: The API Management Software Landscape, Q1 2024, Forrester Research, Inc., February 28, 2024.
5 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists solution providers in communicating their value proposition to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of business and technology initiatives to both senior management and other key stakeholders.
6 Source: Forrester Glossary, Forrester Research, Inc.
Readers should be aware of the following:
This study is commissioned by Microsoft and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Azure API Management.
Microsoft reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Microsoft provided the customer names for the interviews but did not participate in the interviews.
Andrew Nadler
May 2025
ABOUT FORRESTER CONSULTING
Forrester provides independent and objective research-based consulting to help leaders deliver key transformation outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute on their priorities using a unique engagement model that tailors to diverse needs and ensures lasting impact. For more information, visit forrester.com/consulting.
© Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies.
https://mainstayadvisor.com/go/mainstay/gdpr/policy.html
PDF