Tag Archives: Microsoft

App stores set to dominate future software sales?

Following the success of the iPhone app store (over 6 billion downloads to date), app stores are becoming more and more of a feature of the software landscape. In case you missed it, Apple announced yesterday that there will be an App Store for Macs  ‘within 90 days’. In summary:

  • The Mac app store will be tightly integrated with Mac OS X, including automatic install and update.
  • There will be restrictions on technology, for example Java apps will not be allowed.
  • Apple will keep 30% of any revenue from sales.
  • $99/year subscription for developers.
  • Developers will still be able to sell their software outside the App store.

It is easy to see why Apple would want to do this:

  • A potentially huge new revenue stream from third party Mac software sales.
  • They get even more control over the customer experience.

And this could have advantages for Mac users:

  • Simpler payment and installation.
  • Screening out of low quality apps and malware.

And potential advantages for Mac developers:

  • Mac users might buy more software if it is easier to do so.
  • One main channel to concentrate your marketing efforts on.
  • Some of the boring infrastructure of selling software (licensing, shopping cart etc) can be taken care of by Apple.

But the disadvantages are all too obvious:

  • Your app could be rejected outright. And you won’t know until you submit it for approval. Apple are judge, jury and executioner. The iPhone app store has been infamous its capricious and opaque approval process.
  • 30% is a huge chunk of revenue. Typical payment processors take 5-10% of revenue. Where the new app store cannibalises existing sales (and it is hard to see that it won’t) vendors will lose 20-25% of existing sales revenues.
  • New apps and updates will be delayed by days or weeks as they go through the app store approval process.
  • A single centralised app store is likely to make it harder for niche/long-tail apps to make any sort of living. Certainly this is what seems to be happening in the iPhone App store.
  • Apple are control freaks and have traditionally taken a rather heavy handed approach with developers, including the liberal use of NDAs. The app store will give them even more control.

And worse might follow:

  • Apple makes a lot of their money from selling over-priced hardware. It may be in their interest to drive software prices down so they can sell more hardware. $5 is considered expensive in the iPhone App Store.
  • This could be the first step to making Mac OS X a closed system, like iPhone, where only Apple approved apps can be installed.

I guess they can’t piss off developers too much – a computer without third party applications isn’t going to be very attractive to customers. But I am finding it hard to work up any enthusiasm for a Mac app store. If it is successful I can either be in the store and give up a lot of freedom and cannibalize exisiting sales at a much lower margin, or stay out and be shut out of a large chunk of the market. It isn’t an attractive choice. As my app is written in C++/Qt, rather than Objective-C/Cocoa, I am not even sure that it will be eligible for inclusion in the store. I could just abandon Mac OS X, but Microsoft is also rumoured to be working on their own app store (despite the failure of DigitalLocker). That is a truly terrifying prospect given the awfulness of their ‘Works with Vista’ approval process (I speak from personal experience).

Suddenly web apps are looking more interesting.

What are they smoking in Redmond?

I scanned the Microsoft ad below from a recent QBS catalogue.

microsoft_ad

click for larger image

I am still struggling to understand the underlying message. Use Team System and Microsoft will get its tentacles around you? I don’t know which is more unlikely, the basketball playing Cthonians or the athletic and good looking development team.

Getting ready for Windows 7

windows-7I am currently downloading the new Windows 7 release candiate. It is 2.36 GB and the ActiveX download control predicts it will take around 10 hours in total (NB I am also doing a large FTP upload, which is probably slowing it down considerably). Once the download is complete I intend to install it in a VM to test my table planning software.

You can download the latest Windows 7 release candidate here. It is free to download and use, but  it expires on 01-June-2010 and will shutdown every 2 hours starting on 01-March-2010 (insert your own joke here). A couple of points to note from the Windows 7 FAQ:

While the RC is stable and has been thoroughly tested, it’s not the finished product. Your computer could crash and you could lose important files. So please back up your data and please don’t test the RC on your primary home or business PC.

When you use the RC, your PC sends information to our engineers to help them check the fixes and changes they made based on Beta tests.

Microsoft hasn’t officially announced when Windows 7 will be for sale. But there are rumours that it is planned for October 2009. Will you be ready?

Mac OS X market share accelerates in 2008

2008 was a good year for Apple and Mac OS X. According to netapplications.com data (via sharewarepromotions blog) Mac OS X’s share of the OS market increased from 7.31% in Dec 2007 to 9.63% in Dec 2008. That is a 32% increase in market share during 2008, compared to a 22% increase during 2007.

macosx_market_share_2007_2008

Windows market share fell from 91.79% to 88.68% in the same time. While Mac OS X’s annual gains are impressive, it has a long way to go to catch Windows. 15 years if you project the 2008 gains forward.

macosx_vs_windows_market_share_2007_2008Of course, it is highly questionable to project 15 years from a single year of data, but it gives an idea how much work Apple still has to do.

I sell table planning software for Windows and Mac OS X. Mac visitors to my website have followed the general trend, up from 7.41% in 2007 to 8.5% in 2008 and accounting for around of 10% of visitors at the end of 2008.

macosx_visitor_percentage% Mac visitors to http://www.perfecttableplan.com

My data also shows that Mac users are twice as likely to purchase my software as Windows users (I have heard similar figures have reported by others). So Mac users currently account for 20% of my sales. I wouldn’t want to live off my Mac sales, but it is very useful additional income. Given the disparity in cost between Windows and Mac hardware it is hardly surprising that Mac users are more ready to reach for their credit card.

My software is built on top of the Qt cross-platform toolkit. The recent porting of Qt 4.5 to Cocoa gives me the opportunity to further improve PerfectTablePlan’s Mac look and feel and to release a 64 bit version. Hopefully this, coupled with increasing Mac market share, will further improve my Mac sales.

A beta of Windows 7 has just been released.  It will be interesting to see if it can repair some of the damage caused by Vista and slow the growth of Mac OS X. Personally, I doubt it – the Windows 7 feature list certainly doesn’t set my pulse racing.

Unlock new customers?

Microsoft Adcenter helpfully sent me a link to lists of low cost keywords I could advertise on, categorised by sector, to “unlock new customers”. I had a quick look through the ‘sport and rec’ list. Here is a small sample (click to enlarge):

There are lots more where they came from. Microsoft say:

These keywords are actual terms recently used by your customers on Live and MSN Search Engines and are available at a low cost while very few other advertisers are bidding on them.

No kidding.

Did they do any QA on this list[1]? Exactly how many people are searching on “vn b m gn mbnmncbm xbc bcv 0 vfkmjirhtfnkj nb b x bmnx bv”? What has dogging (not work safe) or Hare Krishna got to do with rugby? Is it any wonder nobody is bidding on “duck porn”? Are there really that many people interested in pictures of nude female bodybuilders (apparently)?

Thanks Microsoft, but I’m really not sure they are the sort of new customers I want to unlock.

[1]There are some pretty unpleasant ones I didn’t include.

Microsoft adCenter over reporting conversions

I have long suspected that Microsoft adCenter is over reporting conversions. Here is the confirmation from my adCenter reporting:

I am guessing that the purchaser visited the ‘thank you for your purchase’ page (which contains the conversion tracking script) 5 times, for whatever reason. I can’t think of any other way this situation could occur – the conversion tracking isn’t set up to take account of multiple purchases in one transaction. How difficult would it be to only count the first visit? Google can do it.

Being cynical, perhaps the over reporting suits Microsoft? But it makes it much more difficult for me to assess the real effectiveness of keywords and ads. Another good reason to concentrate my efforts on Google Adwords instead.

The great digital certificate ripoff?

digital certificateRipoff: A ripoff (or rip-off) is a bad deal. Usually it refers to an incident in which a person pays too much for something. A ripoff is distinguished from a scam in that a scam involves wrongdoing such as fraud. From Wikipedia.

Digitally signing your software allows you to show that you are the author of the software and that the application hasn’t been tampered with. If your software isn’t signed, Windows displays scary looking warnings when customers download it. So it makes a lot of sense to digitally sign your software if you are distributing it on Windows. So far so good.

Anyone can create their own digital signature, but Windows only ‘trusts’ signatures that have been created by certain third parties. While there are quite a few Microsoft root certificate program members, I am only aware of 3 that sell code signing (‘authenticode’) certificates. This is where it starts to get ugly. Here are their published prices per year:

Verisign: $499.00

Thawte: $299.00

Comodo: $119.95

That seems an awful lot considering that all they appear to do is check a document (e.g. a scan of your certificate of incorporation), check your whois record, multiply a couple of large prime numbers and then send you a certificate file. Much of this process is (or should be) automated. No wonder the founder of Thawte could afford to be one of the first space tourists.

Given that authenticode certificates from these three companies are functionally identical[1], as far as I can tell, why the price difference? It seems even more bizarre when you consider that Verisign now own Thawte. If you had the misfortune to sign up for the Microsoft ‘works with Vista’ program you could get a 1-year Verisign code signing certificate for $99. I doubt they were doing this at a loss, so how can they justify selling the exact same certificate for $499? I would guess that at least 99% of customers will never check who issued a certificate, so it can hardly be due to the power of the brand.

So why doesn’t someone just set up their own certificating authority, get approved by Microsoft, and undercut these 3 companies? Because their root certificate wouldn’t be installed on all the millions of PCs currently out there. It would be worthless until the vast majority of PCs had the new root certificate. What a fantastic lock-in!

The good news is that you can buy Comodo certificates for much more reasonable prices from these resellers:

Tucows: $75 [2]

KSoftware: $85 ($75 for ASP members)

Which rather begs the question – if resellers can make a profit at $75, why are Comodo charging $119? Because they can, I suppose. I emailed Verisign, Thawte and Comodo to ask about the disparities in price. I only received a reply from Comodo:

This [difference between their price and the reseller price] is simply due to Retail Vs Wholesale solutions we offer. Our Resellers commit to a specific program which enables discounted prices allowing them to make margins on the product as they see fit. Whether that be reduced prices, or make a cash profit from the sale.

All 3 companies have had major price hikes in the last few years. With so little competition, why wouldn’t they? So what is Microsoft’s role is in all of this? One would have thought that they would want to keep certificate prices low to encourage their wider adoption. I emailed Microsoft’s PR people to ask about pricing and whether they had any financial interest in Verisign. Here is the response:

1) Why does Microsoft “insist” on VeriSign certificates?

Microsoft Windows Quality Labs only recognizes files that are signed with a Verisign Class 3 Certificate of Authority (COA). Windows Quality Labs is evaluating recognizing other COA’s. There is a USD $399 offer for Class 3 COAs for those partners (IHVs, OEMS, ISVs) – who plan to submit solutions for Microsoft certification. More details are available at http://www.verisign.com/code-signing/msft-organizational-certificates/.

2) Does Microsoft have any comment to make on the disparity in price?

VeriSign also offers a USD $99 Organizational ID certificate. This provides authentication for organizations to Microsoft Windows Quality Labs, providing access to various services, such as creating submission IDs for products to undergo Microsoft testing. This certificate is not valid for signing drivers or executable files.

Information pertaining to Microsoft Investments can be located at the MSFT Investor Relations site, under Investments/Acquisitions: http://www.microsoft.com/msft/default.mspx.

Steve Bell, Senior Product Manager – Server Certification Programs, Windows Server

After a bit of surfing I found this page which says that Microsoft invested in Verisign in 1996. I don’t know how much they invested, but it certainly puts things in a rather different light. So Windows authenticode certificates are effectively controlled by just 2 companies, at least one of whom is part-owned by Microsoft[3]. Companies are in business to make profits, but it seems to me that these companies are using their effective monopoly to take advantage of the situation. I only see the situation getting worse as Windows displays ever more scary warnings for unsigned software. Perhaps this is something government regulators should be investigating. Let’s hope that Verisign don’t buy Comodo as well.

[1] Only Verisign certificates are recognised for some of the Microsoft certification programs, for example x64 Vista driver signing.

[2] You need to register with Tucows to login.

[3] Assuming they haven’t sold their Verisign stock. I am not aware that Microsoft owns any Comodo stock. I haven’t been able to find any further details by Googling.

Windows Vista service pack 1

vista.gifMicrosoft have announced that service pack 1 for Windows Vista has been released to manufacturing. Microsoft claim “great progress in performance, reliability and compatibility”. SP1 will be rolled out through Windows update from mid-March.

My own stats show that Vista has been slowly increasing market share at 1% per month. At this rate it will take it another 5 years to reach the 75% share currently held by XP. But perhaps a lot of people have been wisely waiting for SP1 before committing?

I have been using Vista on my main development machine for the last few months. It is OK once you turn the deeply annoying UAC off. But it is still hard to see any compelling reason to upgrade from XP.