Azure API Management
by Microsoft · API Management
Azure-native platform to secure, govern and scale REST, GraphQL, SOAP and AI APIs across their lifecycle.
Updated August 2026 · By the ERP Research Editorial Team · Independent and vendor-neutral.
- Works with
SAP- Deployment
- Cloud, Hybrid
- Pricing
- Tiered subscription (Consumption, Developer, Basic/Basic v2, Standard/Standard v2, Premium/Premium v2) plus a separate AI Gateway tier
- Founded
- 1975
- Headquarters
- Redmond, Washington, United States
Overview
Azure API Management is a fully managed, Azure-native platform for securing, governing and scaling APIs across their lifecycle, covering traditional REST, GraphQL, WebSocket, OData, gRPC and SOAP services as well as AI models, MCP servers and agents within one control plane. The service traces back to an October 2013 acquisition of Apiphany, a Washington D.C.-based API management startup founded in 2012; the resulting Azure API Management launched in 2014, making Azure the first major cloud provider to build API management directly into its platform. Microsoft reports the service now supports more than 35,000 customers processing over 2 trillion API requests a month.
The gateway layer provides authentication, authorization, rate limiting, caching, dynamic routing and circuit breaking, with centralized governance and API discovery through API Center. It supports hybrid and multi-cloud scenarios through self-hosted, containerized gateways deployable on-premises or across clouds, with policy enforcement still centrally managed from the Azure control plane. Newer capabilities layer AI-specific governance on the same platform, including token quotas and cost attribution for models, MCP servers and agents, semantic caching, and content-safety enforcement with prompt and completion logging.
Microsoft documents a specific pattern for exposing SAP OData services, from SAP Gateway Foundation, S/4HANA or SuccessFactors, through Azure API Management: importing SAP OData metadata directly as an API or converting it to an OpenAPI specification, and configuring Azure API Management to convert Microsoft Entra ID OAuth tokens into SAML tokens for SAP Principal Propagation single sign-on. This is a documented Microsoft integration pattern rather than SAP-certified middleware.
Screenshots & demo
Demo video from the vendor's YouTube channel.
Features & capabilities
API Gateway and Protocols
Core traffic-handling and policy layer.
- Multi-protocol support: REST, GraphQL, WebSocket, OData, gRPC and SOAP
- Authentication, authorization and rate limiting policies
- Response caching and dynamic routing
- Circuit breaking for backend resilience
- Policy authoring in XML with Azure Copilot natural-language assistance
Governance and Discovery
Centralized visibility and control across an API estate.
- Centralized API governance via API Center
- API discovery across traditional and AI APIs
- GitHub Copilot integration for generating API specifications
- Built-in defenses against the OWASP API Security Top 10
AI API Management
Governance extended to AI model and agent traffic.
- Token quotas and cost attribution for AI model, MCP server and agent traffic
- Semantic caching to reduce AI request latency and cost
- Content safety enforcement with prompt and completion logging for fine-tuning
- One-click transformation of existing REST APIs into MCP servers
Hybrid and Multi-Cloud Deployment
Running gateways outside Azure while keeping governance centralized.
- Self-hosted, containerized gateways deployable on-premises or in other clouds
- Centralized policy enforcement from the Azure control plane regardless of gateway location
- Deployment on Azure Kubernetes Service, Azure Container Apps, Azure Functions and Logic Apps
- Workspace gateways for isolating teams within one APIM instance
SAP Integration
Documented pattern for exposing SAP OData services.
- Import SAP OData metadata directly as an API or convert it to OpenAPI
- Support for SAP Gateway Foundation, S/4HANA and SuccessFactors OData v2/v4 services
- Microsoft Entra ID to SAML token conversion for SAP Principal Propagation single sign-on
- Documented pattern for Power Platform-to-SAP connectivity via Azure API Management
Common use cases
- Exposing SAP OData services (S/4HANA, SAP Gateway, SuccessFactors) as governed APIs with Entra ID single sign-on
- Centralizing authentication, rate limiting and caching across REST, GraphQL and SOAP APIs from one control plane
- Turning existing REST APIs into MCP servers to expose them to AI agents
- Governing token usage and cost across multiple AI model providers behind one AI Gateway layer
- Running self-hosted gateways on-premises or in another cloud while keeping policy management centralized in Azure
- Publishing an internal API catalog and enforcing OWASP API Security Top 10 defenses
Strengths & considerations
Strengths
- Documented SAP OData integration path, including Entra ID to SAML token conversion for SAP Principal Propagation SSO
- Single platform spanning traditional REST/SOAP APIs and newer AI model, MCP and agent traffic, rather than separate products
- Self-hosted gateway option for hybrid and multi-cloud deployments while retaining centralized Azure-based governance
- Decade-plus operating history, launched in 2014, with a large reported customer base (35,000+) and monthly request volume (2 trillion+)
ERP integrations
Covers SAP Gateway Foundation, S/4HANA and SuccessFactors OData v2/v4 services; SSO is configured by having Azure API Management convert Entra ID OAuth tokens into SAML tokens
Pricing
The Consumption tier is billed per 10,000 API operations with no fixed monthly fee. The v2 tiers (Basic v2, Standard v2, Premium v2) include base monthly request allowances of 10 million, 50 million and unlimited respectively, with overage charges. Classic tiers (Developer, Basic, Standard, Premium) are billed per provisioned unit, with Premium offering additional units at 50% of the first units cost. Microsoft does not publish flat list prices on the product pricing page; exact rates depend on region and are shown in the Azure pricing calculator. Get an independent shortlist with pricing guidance below.
Technical & security
- Hosting
- Managed control plane in Azure, with optional self-hosted gateways on-premises, in Kubernetes, or in other clouds
About the vendor
- Founded
- 1975
- Headquarters
- Redmond, Washington, United States
- Employees
- Part of Microsoft (~228,000)
- Ownership
- Public (Microsoft Corporation; NASDAQ: MSFT)
Alternatives to Azure API Management in API Management
Azure API Management — frequently asked questions
Can Azure API Management expose SAP OData services?
Yes. Microsoft documents importing SAP OData metadata, from SAP Gateway Foundation, S/4HANA or SuccessFactors, directly as an API, or converting it to an OpenAPI specification, and configuring Azure API Management to convert Microsoft Entra ID OAuth tokens into SAML tokens for SAP Principal Propagation single sign-on.
What protocols does Azure API Management support?
REST, GraphQL, WebSocket, OData, gRPC and SOAP, alongside newer support for AI models, MCP servers and agents within the same platform.
How is Azure API Management priced?
Across a Consumption tier (per 10,000 operations), classic unit-based tiers (Developer, Basic, Standard, Premium), and newer v2 tiers (Basic v2, Standard v2, Premium v2) with built-in monthly request allowances. Microsoft does not publish flat list prices; exact rates depend on region via the Azure pricing calculator.
Can Azure API Management run outside Azure?
Yes, through self-hosted, containerized gateways that can run on-premises, in Kubernetes, or in other clouds, while policy management and governance remain centralized in the Azure control plane.
Does Azure API Management manage AI and LLM traffic?
Yes. It applies token quotas and cost attribution to AI models, MCP servers and agents, adds semantic caching to reduce latency and cost, and can turn existing REST APIs into MCP servers for agent access.
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