Opinion: Why Microsoft’s Windows 8 App Store May Fail

So it’s not really a surprise that Microsoft says Windows 8 needs its own app store. But simply having an app store is not enough anymore. The Windows Store we have seen so far is not convincing and may go down in flames. Microsoft needs to do better.

Apps, formerly called software or programs, are driving platforms these days. Apps, wrapped into a convenient delivery package, are the magic that Apple and Google learned to use to surround their operating systems with amazing user experiences that transcend the idea of a traditional operating system. If the successes of iOS and Android are any indication, then we can assume that there is at least a chance that massive app support for a new Windows version can help Microsoft to secure its dominant market position. Over time, apps in Windows are a critical feature for Microsoft to connect its desktop, mobile, ultra-mobile and entertainment platforms.

If you look closely, Microsoft has an app opportunity that is greater than the opportunity of any of its rivals. Apps can help Microsoft connect (1) desktop and mobile computers with (2) ultra-mobile (smartphone) computing devices, (3) entertainment and video games (Xbox Live), and (4) servers. Imagine a fabric that unites those four environments, realize Microsoft’s market reach, and it’s clear that Microsoft’s need for an app store is not just a casual idea that some managers had while drinking a couple of beers. The goal must be a support system for all of its platforms. Even Windows Mobile could potentially see the light at the end of the tunnel with a great cross-platform app store experience.

The Good

Microsoft has a few good ideas for the Windows Store. Summarized, there is a more attractive revenue share model (80/20 above $25,000 in sales), a nicely designed app discovery interface that is seamlessly integrated into the Metro UI, a developer contest to spark the development of unique launch apps, discovery integration in Bing, app curation, an opportunity for developers to automatically offer their apps as a trial without writing additional code, as well as optional integration of app discovery in IE10. Microsoft’s pitch is (you may have already noticed it) “easy discovery” of content. Expect an appealing, animated and smooth interface with a conclusive structure that organizes a flood of apps.

The Bad

I don’t think it will be enough for the Windows Store to succeed by default. From a very naïve view, you could even question the need for this store. We have had an app store for Windows for about 15 years (download.com), which will remain a valuable source for software as long as Cnet doesn’t hurt itself with dumb ideas such as a nasty installer routine that delivers code for which you have not asked. If Cnet has been following the trend toward app stores, I am sure that they are working on an app version of download.com for Windows and other platforms already. How much more value than download.com can the Windows Store deliver? Here are three problem areas that could potentially hurt Microsoft.

Developer support

There are many companies that are trying to ascertain how many apps it would take to make an app store successful. The number as well as the quality of apps will be important. Microsoft will have to invest a lot of money into apps to offer a unique appeal for Windows. It needs to court developers to be able to attract consumer interest. Unfortunately, Microsoft’s pitch is not quite as strong as it should be. The company argues that 400 million PCs will be sold next year, which gives the app store tremendous exposure. That is true, but does that exposure translate into sales? No. We learned in recent years that neither user base nor the number of available applications translates into developer value, revenues and actual purchases. We all know that Windows has 90 percent of the market and that most PCs are sold as Windows versions. Highlighting that fact will not persuade additional developers.

The same holds true for the revenue share model: 70/30 under $25,000 in sales and 80/20 above. But, seriously, how many app developers make more than $25,000 on their app? Most apps don’t even reach $5,000. For example, we know that Windows users are less likely to spend money on software than Apple users. A better revenue share is a great idea, but Microsoft should be focusing more on helping developers to market their apps among potentially tens or hundreds of thousands of apps. Visibility is the true problem for most developers today. IE and Bing exposure are great, but probably not enough. There needs to be some innovative ways for small developers to help their app reach consumers. “Easy discovery” is the right path, but every other app store offers that claim as well. If Microsoft can offer much more value here than its rivals, it will win.

Touch

Microsoft explicitly promotes applications designed for the Windows Metro UI for its Windows Store. Let’s think about this one for a moment. Does this make sense? Since Windows 8 is all about the Metro UI, will all Windows 8 PCs be touchscreen PCs? Windows 7 to Windows 8 upgrades will, most likely, not be touchscreen PCs and there may be a good portion of new Windows 8 PCs that won’t have touchscreens either. Subtract all those upgrades and entry-level PCs from the customers accessing the Windows Store. How many of those 400 million PCs next year will, in fact, be aligned with touchscreen Metro apps in the Windows Store? Your guess is as good as any market researcher’s guess at this time, but it is safe to say that it won’t be close to 400 million.

In actuality, how useful is touch on a desktop and a notebook PC? Are you willing to largely replace your mouse with your hand that reaches across the keyboard and taps on a vertical screen that bounces back and forth? Touch on desktop and notebook computers is far from being a slam dunk for Microsoft. It could succeed in the long run, but it may just as easily fail entirely. Given the layout of Metro as well as the closely attached user model of the Windows Store, touch needs to be a complete success to guarantee success for Microsoft. However, touch will not work for all users. It is great on horizontal devices such as tablets, but it is a pain in the neck on notebooks and desktops. If touch fails, Microsoft may have a bigger problem on its hands than they experienced with Vista, as Windows 8’s success, as far as consumer perception is concerned, could live and die with the Metro UI. Enthusiasts may care about under-the-hood changes, such as more efficient memory usage, but I don’t think that the average consumer will care.

Xbox Live

I don’t quite understand why Xbox Live does not have a much more prominent position in platform product marketing these days. Xbox Live should have been a much more powerful component in Windows Mobile, and it is somewhat neglected in Windows 8 previews. We know that it will be integrated in some way, but we have no idea how far the platform integration will reach. If the integration ends with checking your game high-scores and admiring your avatar, it’s not a big deal. However, Xbox Live should be much more integrated, especially if Microsoft moves increasingly in the general entertainment direction.

Microsoft’s entertainment division has the only brand that sparks enthusiasm among its users and is, at this time, the most powerful entertainment platform available. It is a missed opportunity for Microsoft if it does not connect games and entertainment across its platforms. It would be foolish if the company did not specifically engage developers to address Xbox Live that could connect phones, the Xbox 360 and PCs.

Right now, Xbox Live in Windows 8 is clearly under-marketed; it is even more under-marketed as far as the Windows Store is concerned.

Delivery vehicle

Microsoft has been building IE10 to become the engine that will enable access to HTML5 apps and will run them. However, the integration in IE10 is rather limited, and IE10 users have to actively setup an App Store icon in the browser. This can’t be an ideal solution.

As much as Microsoft is pitching its HTML5 efforts, its hardware acceleration engine, and its progress in removing legacy baggage from its browser, it is rather surprising that Microsoft has not been marketing HTML5 and its capabilities for Windows Store applications. HTML5 will deliver a completely new connected app experience that will be entirely enabled by IE10, which offers a great hardware acceleration engine to run certain apps with certain features much better than Chrome and Firefox can.

I am not quite sure why Microsoft has failed to mention this opportunity for developers right off the bat.

Bottom line

Put everything together and the initial impression of the Windows Store is not quite as exciting as Microsoft would want it to be. The pitch to developers needs to be streamlined, the focus clearly needs to be on HTML5, and Microsoft needs to move away from touch only.