Over the last few years, the on-demand delivery of consumer applications has boomed. On the desktop, Valve's Steam service has made buying games quick and painless. In the mobile world, the iPhone, Android, RIM, and Windows Mobile devices all have application stores or will be getting one in the near future. So where is the Steam-type service for desktop applications?
With the launch of Windows Vista, Microsoft introduced a set of technologies to make buying desktop applications very similar to buying games via Steam. There was the Windows Marketplace initiative, complete with a "digital locker" that allowed customers to re-download items and license keys as needed. But when I went to the Windows Marketplace Web site to do research for this article, I discovered that it has been shuttered. Instead of providing a one-stop shop for Windows applications, it will be a mere directory of applications -- and applications in the digital locker? The FAQ says to make sure to download the applications by August 2009 and copy your license keys by then, because it is going away.
The Windows Marketplace was given fairly high-profile attention in the Windows Vista operating system, and the Windows Marketplace and digital locker made it attractive for application vendors to work with Microsoft and alleviate themselves of those burdens such as handling re-downloads, reissuing license keys, maintaining customer accounts, and so on. And yet, Windows Marketplace is clearly a failure. I talked to a number of people about Windows Marketplace; some of the people are very tech savvy and some are not, but none of them were even aware of the existence of the Windows Marketplace, despite being Windows Vista users. Clearly, being "high profile" at the OS level is not enough to be a success.
What would it take for a similar service to do well? Taking a look at what is making money, and what is making developers happy, points the way to success.
- It must be easy to give your money to the store. After you make your first purchase, you should not have to enter more than your username, your password, and maybe your credit card information to make purchases.
- It must be easy and obvious. The purchase system must be up-front to the user, in a place that they see all of the time. You do not want the users crawling the Web looking for apps; you want to make your application store more of a habit than Google.
- It must be publisher friendly. Remember, no participating publishers means no applications. The iTunes market is the only one in which vendors are letting themselves be pushed around; vendors have no choice if they want to develop for the iPhone. For other markets, especially the PC, there are so many ways to get an application onto the device that your store needs to be overwhelmingly advantageous. This means low fees, offloading of basic customer services (help making purchases), handling of product updates, version upgrades, etc. The publisher needs to save enough money internally to justify giving your store a cut of the revenues.
- It must allow a shareware model. For those publishers who want it, the store must allow a way for customers to try an application, and then pay for it without needing to reinstall it.
The brass ring of such a store would be to see publishers stop selling software through the publisher's Web site and sell through the store exclusively (or nearly exclusively).
There are a few companies that specialize in software sales (e.g., Digital River), but none are destinations unto themselves, and none offer the integration that Steam, App Store, etc. offer. I think the market is ripe for an enterprising company in this space, provided that it can latch onto consumers' newfound discovery of the concept of paying for applications, which was recently revived by the mobile device market.
Do you know of any companies that are already offering this type of service? Is there anything other than what I list for a company to do well in this space? Share your thoughts in the forums.
J.JaDisclosure of Justin's industry affiliations: Justin James has a working arrangement with Microsoft to write an article for MSDN Magazine. He also has a contract with Spiceworks to write product buying guides.
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Justin James is the Lead Architect for Conigent.