For twenty years, software companies sold entire applications. Then APIs arrived and cracked that model open. Now the next shift is happening. Not apps. Not platforms. Functions. Small pieces of logic that solve a specific problem and get paid every time they run.
Functions are the new products. Marketplaces are the new distribution layer. And the economics of software are changing.
Software Just Got Unbundled
Modern software is no longer built as one giant application. It is assembled from individual capabilities.
Authentication
Payments
Messaging
Search
Machine learning
Each capability is pulled into the stack as needed.
That shift is already visible in the API economy. More than 90 percent of developers use APIs in their applications, meaning most modern software is assembled from external services rather than built entirely from scratch. Source: Nordic APIs
The market behind those services is massive. The global API economy is projected to exceed $16 billion by 2026, driven by the demand for modular, programmable services. Source: Orbilon Tech
APIs were the first sign that software capabilities could be packaged and sold independently. Functions take that idea even further.
APIs Turned Capabilities Into Products
Before APIs, software was sold as a full application. If you wanted payments, you bought payment software. If you wanted messaging, you installed messaging infrastructure. APIs changed that.
Recent industry reports show that roughly two-thirds of organizations already generate revenue from APIs, with a significant portion attributing more than a quarter of total revenue to them. Source: Stoplight API Economy Report
APIs proved something important. Developers will pay for capabilities. Not just software. But APIs are still relatively large building blocks. Functions shrink the product even further.
Functions Are the Smallest Product in Software
Serverless computing changed how software is built. Applications are no longer long running services. They are collections of functions that execute when called. Each function performs one task.
Validate an email
Classify a document
Extract keywords
Analyze sentiment
The market behind this model is growing fast. The serverless computing market reached $21.9 billion in 2024 and is expected to grow to $44.7 billion by 2029. Source: Markets and Markets
Serverless architectures enable developers to run independent functions that scale automatically and execute on demand. Source: Academic research on serverless architectures
A function has everything a product needs. It solves a specific problem. It runs independently. It can be priced per execution. That makes it the smallest sellable unit of software.
Monetization Is Moving to Usage
Software economics have evolved through three phases: licenses, subscriptions, usage. Licensing sold static software. Subscriptions sold access. Usage sells execution. Instead of paying for a tool you might use, you pay when logic actually runs.
This shift is accelerating across the API economy. The API monetization platform market is projected to grow from $6.1 billion in 2024 to more than $44 billion by 2032, fueled by usage based pricing models. Source: Credence Research
Usage pricing aligns incentives. Developers earn when their logic creates value. Not when marketing convinces someone to buy software they may never use. But monetization alone does not solve the whole problem. Software still needs distribution.
The Rise of Agents Changes How Software Is Used
At the same time, a new layer is emerging on top of this model. Agents. Not as products themselves, but as orchestrators of execution. Agents do not replace functions. They rely on them. Where a function performs a single task, an agent decides what tasks to run, in what order, and under what conditions. This is the shift from static software to dynamic systems. From tools you use to systems that operate. But even in an agent-driven world, the economics do not change. Every decision an agent makes leads to execution. And execution happens at the function level. Agents introduce intelligence. Functions deliver the outcome.
Marketplaces Are the New Distribution Layer
Distribution used to belong to sales teams. Then app stores arrived. Now marketplaces are taking over. Marketplaces solve three critical problems instantly. Discovery. Trust. Payments.
That is why the API marketplace market reached $21.3 billion in 2025 and is projected to grow to more than $82 billion by 2033. Source: Grand View Research
Enterprises are increasingly turning to marketplaces to discover and deploy software faster. Source: AWS Marketplace Economic Impact Study
Marketplaces are not just catalogs. They are economic engines. Developers publish capabilities. Workflows consume them. Revenue flows every time they run.
Why Functions Beat Monolithic SaaS
Most SaaS products bundle hundreds of capabilities into one application. Enterprises rarely need all of them. But they still pay for the entire system. Functions flip that model. Instead of buying software, companies assemble workflows. Instead of platforms, they use composable logic. Instead of subscriptions, they pay per execution. A single marketing platform might contain dozens of capabilities – headline generation; Sentiment analysis; Keyword extraction; Content scoring; the possibilities go on and on.
In a function economy, each of those capabilities becomes a product. Each function can power thousands of workflows. Each execution generates revenue. Small composable logic beats monolithic SaaS. Not because it sounds modern, but because it is more efficient.
What This Means for Developers
This evolution is creating huge shifts in the developer economy.. AI increases developer output. Hiring slows. Traditional opportunities shrink. But the demand for logic keeps growing.
Functions unlock a new path. When developers publish capabilities and workflows run them, developers can earn from usage. No marketing department required. The value of code is measured by execution. Not downloads or installs. Execution.
Why Rival Exists
This shift is already happening. But the infrastructure has been missing. Rival was built for the function economy. The Rival Marketplace turns functions into products. CortexOne routes workloads to the most efficient infrastructure. Developers publish once. Workflows run anywhere. Revenue scales with execution. Software is no longer packaged. It is executed. Functions are the new products andmarketplaces are the new distribution layer.
Start building functions that earn money every time they run.
Explore the Rival Marketplace or publish your first function today.