How WSO2 API Manager timeouts and suspension works

Address and WSDL endpoints can be suspended if they are detected as failed endpoints. When an endpoint is in in suspended state for a specified time duration following a failure, it cannot process any new messages. Please find the WSO2 ESB document[1] which explains those properties and their usage(even APIM and ESB are different products they do share same synapse runtime and these properties will effect in same manner).

errorCode - A comma separated error code list which can be returned by the endpoint.This parameter is used to specify one or more error codes which can cause the endpoint to be suspended when they are returned from the endpoint. Multiple error codes can be specified, separated by commas.

initialDuration - The number of milliseconds after which the endpoint should be suspended when it is being suspended for the first time.

maximumDuration -The maximum duration (in milliseconds) to suspend the endpoint.

progressionFactor  - The progression factor for the geometric series. See the above formula for a more detailed description.

When endpoint suspension happens, it will work as follows.
For the suspend duration after the first failure, this equation does not applies. Also when endpoint changed from active to suspend state, suspension duration will be exactly initial duration.
This equation only applies when endpoint already in suspended state and suspension duration expired.

next suspension time period = Min (Initial suspension duration * Progression Factor , Max suspend time).

[1]https://docs.wso2.com/display/ESB481/Address+Endpoint

Also in API Manager we do have different timeouts. So if some endpoint timed out then we will notice that as faulty endpoint and consider for suspension

1. Global timeout defined in synapse.properties (API_HOME\repository\conf) file. This will decide the maximum time that a callback is waiting in the APIM for a response for a particular request. If APIM does not get any response from Back End, it will drop the message and clears out the callback. This is a global level parameter which affects all the endpoints configured in APIM.
The default is 120000 milliseconds (2 minutes).

2. Socket timeout defined in the passthru-http.properties (APIM_HOME\repository\conf) file. This parameter will decide on the timeout which a particular http request is waiting for a response. If APIM does not receive any response from the Back End during this period, HTTP connection get timed out and that will eventually throw timeout error in the APIM side and fault handlers will be hit.
The default value is 60000 milliseconds (1 minute).

3. You can define timeouts on the endpoint configuration such that it will affect only that particular endpoint in an API. This will be a better option if you need to configure timeouts per API endpoint for different Backend services. You can also define the action upon the timeout.
Below example configuration will set the endpoint to timeout in 120000 milliseconds (2 minutes) and then execute the fault handler.

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