I’d hate to be a piece of furniture in Steve Ballmer’s office this week

The Mac App Store launched Thursday, and Herman Miller stock went up two points in anticipation of all of the chairs Steve Ballmer has probably been throwing at people this week.  There’s no way the sweaty-pitted Microsoft CEO isn’t beating his middle managers like red-headed step-children after the news came out that people downloaded a million apps in the first day, with 10,000 apps available at launch.  The Mac App Store changes things in ways that people in Windowsland cannot even contemplate, although when Win7SP2 launches with the MSFT half-ass attempt of the same concept, I’m sure we’ll hear all about the greatness, just like we’ll hear about how great judicial advocacy is from Teapotters that have railed against it for the last two years when they need it to keep Guantanamo bay open.

The Mac App Store changes things in a big way, both good and bad.  Back when I got started in this industry, if you wanted to write and sell an application for a Mac (or a PC), you rode your dinosaur to work, hired a bunch of people to put your crap on floppy disks and into boxes, and then either sold it yourself in your local computer stores (kids younger than 20: imagine a Best Buy with only a computer section, that didn’t suck), or you got your retail boxes dumped into the channel and flushed out to big stores and catalogs.  (Catalog: a paper version of Amazon, but it took 4-6 weeks to get your stuff.)  Then the internet happened, and people sold software on web sites, where you somehow sent money and either got a download or got a CD-ROM sent to you through the pony express for later installation at your own leisure.

But if you had this great software package, you had this huge list of problems.  Gotta set up a web site.  Gotta get a shopping cart system in place.  Gotta take credit cards and get a merchant account and whatever SSL nonsense your ISP wants you to get.  Or, gotta bend over and spread for PalPal’s cut of the vig.  Gotta find a way to have a download center that isn’t just at widget.com/dontlookhere/dl/product.zip so the first person that buys your crap doesn’t just spam the magic link to the world and let everyone download.  Gotta come up with come crazy system of software enablement, serial numbers you type in and send securely, whatever obfuscated nonsense you need to keep the world from just emailing your ZIP file to all of their friends.  Gotta find a way to drive traffic to the site.  Gotta find a way to get people to return to the site for upgrades and new versions.  There are a lot of moving parts, a lot of things to consider, and either every software reseller reinvents the wheel, or you join some tribe or cabal or commune or collective or whatever else to use one common set of machinery for everyone’s releases, and you pay for the privilege.

So now you avoid all of that.  Pay Apple a hundred bucks to join, upload your DMG file, and you’re in a searchable, centralized catalog of apps.  When a new Apple user fires up their iMac for the first time, there’s a pretty little icon to click that brings them to a huge store filled with games and productivity apps and stuff people can click on without scrambling for their credit cards or signing up for yet another e-merchant account that will probably eventually get hacked, with your password and Visa number and home phone ending up in a torrent sent out to every script kiddie in the world.

There’s also the issue of central maintenance.  When you have to push out a patch, you don’t spam out emails, and you don’t have to write complicated code to beam back to the mothership and check if the latest version is installed on the user’s PC. You tell Apple you have a new version, and let them do the dirty work.  And when a person bricks their MacBook or spills juice in their iMac and has to go get a new machine, they just plug in their username and all of their apps magically download again.  There isn’t a two-month process of trying to remember all of the crap you installed, or a weekend-long backup and reload on an external drive or a pile of DVD-Rs.

Yeah, there are downsides.  You’re paying Apple that hundred bucks, and they’re also skimming 30% of the take on your sales.  But do you know how much banks take from mom and pop companies on merchant accounts?  I’d tell you, but there are like 79 different surcharges and monthly fees and address verification fees and machine rental fees and every other nickel-and-diming the banks can think of to hit you with.  That 30% erases a lot of headaches.  And compare it to how much of a discount you’d give in channel sales, and it’s not a bad deal.

There are all of the “walled garden” arguments you’ll hear from the Microsoft camp.  You’ve heard the same arguments since the App Store showed up on the iPhone, although you haven’t heard as many of them since Windows Phone 7 adopted the same exact strategy for their app store.  And you probably won’t hear much more about it after that Windows 7 Platinum Home Deluxe SP2 Zune Marketplace shows up in the next rev of their OS, providing the same exact walled garden, albeit with a lot of the wall’s pieces removed to appease any of the big software makers that balk.

I think by the fall, everyone at every point of the food chain is going to try to launch their PC app store.  Amazon’s probably brewing one; I’m sure all of the hardware manufacturers like HP and Dell are going to have a long, painful meeting this Monday where some idiot who has never installed software in his life but can wear a mean tie and gets all of the ZDNet headlines beamed to his Blackberry is going to pitch their genius idea to launch their own bundled crapware app store on their new computers.   App stores will be the add-on toolbar of 2011, just like they were for phones in the last 18 months.

Another argument that is a plus and a minus is what the hell this will do to pricing.  People are now used to paying 99 cents for a game on their phone, so good luck on putting your desktop game on the App Store for $79.99.  Sure, you can trim down that price a bit because you’re not paying $47 a copy in merchant account fees to Bank of America.  And your game is some one-gig DVD release and not just a two-screen screen-tapper you wrote in a weekend.  It’s going to cause unbundling of suites, like Apple is doing with iWork and iLife, where people will only buy the apps they want, at a lower price and a smaller download, instead of buying a full package of apps on a DVD.  I don’t know what the magic price point will become, although I’m guessing people will be less apt to buy a $99 app and more willing to pay something like $19 for Real Apps and $4.99 for games and entertainment.

I just got the update and installed the App Store, and gave it a quick drive to download the new Twitter client.  No problems, no surprises.  I haven’t bought anything yet, but when I get a free second (which will be in like June) I will probably hunt down the latest versions of some of the older registered payware/shareware I have, just to make the next update easier.  All I can tell you now is, I’m glad I’m not working at a hardware manufacturer that’s probably going to go on damage control and require all of its R&D center employees to waste a lot of their free time generating stupid powerpoints re-selling an already done idea.  Also glad I’m not driving across the 520 bridge every morning to potentially have a 57-pound Aeron chair thrown at my head.

One thought on “I’d hate to be a piece of furniture in Steve Ballmer’s office this week

  1. Pingback: Of course the Mac App Store will change the world, but how « indie posit