Finally, an API over a library means the maintainer of said API has an opportunity to harvest data about usage. Perhaps they use this to motivate new features, or perhaps they can monetize this data on the side.
I seriously doubt these decisions have any connection to technical requirements; it's all business.
The big advantages for the customer of a managed API are:
* No costs of installing or upgrading
* It's language independent
I agree that it's lower risk to rely on a library that you have locally, but none of my customers have ever requested that. I do offer a self-hosted plan, and a few customers have inquired about that, but they lose interest when I tell them it costs 10% more than a managed plan.
All of Zestful's commercial competitors are managed APIs as well, so I don't think customers view a locally-installed library as critical.
Although it's wildly inefficient, a SAAS offering solves those problems.
I don't know how profitable the business is, but if the problem is popular enough it should be possible to make money?
Also, when you are selling to businesses, piracy isn't that big of an issue.
In my experience, APIs are generally slow, unreliable, and tend to change without notice.
I don't understand what advantage an API has, except making it easier for the developer to charge based on usage.
Do people really buy APIs like this? Am I missing something?