Microsoft never has had to be the innovator in a given market to succeed. More often than not, it has followed a successful path set forth by a predecessor, only with a bit more capital and marketing panache. This time, the competition has left a clear set of footprints for Microsoft to follow. And if Microsoft follows that path precisely, Windows 8 – an operating system many have declared kludgy and confusing – will nevertheless be a hit.
But First, A History Lesson
“No one cares about Linux on phones,” said the editors, “because no one cares about Linux anywhere else.” Despite all of human history, and all evidence to the contrary and the aphorisms that they themselves recite, many people who publish things for a living actually believe that times don’t change, and that consumers will do tomorrow what they did yesterday.
Only four years ago this month, which may as well have been yesterday, a very special phone premiered that you’ve probably forgotten even existed, even if you were one of the dozens who owned one: the HTC Dream, which T-Mobile rebranded the G1. It was an Android phone, which some folks in this business were rebranding a “Linux phone” just before dismissing them as things no one would ever care about. What makes this device a milestone is that, in order to give it a little push forward in the market, Google rushed to deployment with its answer to the iPhone App Store, a little kiosk offering what Google had hoped would be 50 or so apps, but which ended up being less than half that number.
It was the Android Market, which at first, many in my business declared a flop. With its initial inventory so poor, a major survey showed at the time, there was no reason for developers to cease working on their blockbuster mobility projects for the all-important .NET Compact Framework.
Today, Android continues to consist of a variety of dissimilar usage models with kludgy, untested and sometimes ill-considered methods. No single Android phone, not even the Samsung Galaxy S III, stands alone as the bellwether model that defines the genre. There are probably still a dozen fart apps for every productivity app. And to top it off, Google marketing renamed the Market the single worst name in all of retail, “Play Store” (the last time my daughter played store, she was about 8).
Yet the Android Market was the fuel that floated the ship. When customers first chose an Android phone over something as captivating and desirable as the iPhone, it was for one of two reasons: 1) You could get it with a carrier other than AT&T; 2) The Android Market looked promising, enough to bet money on. Today, editors who to this very day declare Linux “dead in the water” tweet these declarations to their writers over their Android phones.
Despite all the factors that should make Android a flop, and certainly more to come from reliable sources like Motorola, Android’s Play Store makes it a success. And that is the lesson of this article, one which Microsoft – the greatest learner of other companies’ lessons in the history of technology – undoubtedly already knows. Customers will flock to a platform with a vibrant and lively market even when the rest of it doesn’t make much sense, and even when the device that brings you that platform is as forgettable as last year’s NBC fall lineup.
Walk This Way
Microsoft’s path to success so closely matches its predecessor’s footsteps that it, too, named the Windows 8 apps store something stupid: Store. (It’s at this point you’re thankful that Microsoft doesn’t sell things like soup or cars.) Store is the point of presence, to borrow a phrase from the communications world, where consumers meet the burgeoning world of Microsoft’s completely new apps platform.
For those of you just tuning in, this bears repeating: The Windows 8 apps platform is not for the applications you would run on your Desktop (which, in some bizarre form of feng shui, Microsoft has literally shoved into a corner). It’s for the new class of apps called WinRT, which will run on Windows 8 devices as well as Windows Phone 8 devices. As an entirely new platform, it may as well be a new operating system. But Microsoft’s marketing strategy has always been aboutleverage, and this time its tactic for extending this new platform to a point in front of your face is to tack it right onto the old one.
While Store will have some Desktop apps for sale (though originally it wasn’t going to), and you will find Office 2010 there (even though the preview for Office 2013 is going on now for free), Store’s real purpose isn’t to boost sales for conventional PC software. It’s to launch the WinRT platform into orbit.
This is far from Microsoft’s first effort to sell software online. Indeed, the very first incarnation of “The Microsoft Network” (now MSN) included a retail platform for selling Windows software. But not until Xbox Live has any of Microsoft’s previous efforts had an enticing value proposition. The Windows 8 Store does: It contains free and low-cost apps that differentiate your use of Windows 8 from any other Windows you’ve used before.
Last year, when not even Microsoft knew what that differentiating factor would be, it launched a contest to incite other people to figure it out. The contest worked. During the Consumer Preview period, the contest added enough apps to the prototype Store that commercial apps vendors – including Angry Birds maker Rovio – felt they wouldn’t be adding their wares to empty shelves. By the middle of the Release Preview period, there were recognizable brands throughout the Store.
Microsoft has been running its Store like a store since Windows 8 released to manufacturing (RTM), including enabling the first automated sales with monetary transactions. So right this moment, the Store is already open and doing business. When most consumers actually touch the Windows 8 Store for the first time later this month, they won’t be breaking the ribbon. Business will already be happening, reviews for some apps will already have been posted, and there won’t be a question of whether any of these apps will eventually take off.
You won’t find many business and productivity applications here, even though there will be departments for them. (It won’t be the first online thing you’ll find whose business department isn’t really stocked with anything for business.) As the decorations imply, the WinRT platform for now is about relaxing and getting to know your device (we probably won’t call it a “PC” for much longer) a bit more intimately.
So unsurprisingly, there will be more fun stuff here than business stuff. This will probably continue to be the case, as the value proposition for trading multitasking, network sharing and multiple windows for touch sensitivity will probably never appeal to many productivity software developers. But there’s precedent that says this may not really matter. While certain apps do exist for mobile platforms that categorize themselves as “productivity,” for the most part they’re laughable. That’s fine, because people use their smartphones to communicate and to sort out their itineraries, as well as to have fun and share their media. There are other devices for work.
Store’s serious stuff falls more into the range of accessories and occasional apps, such as newsreaders, portfolio status checkers and welcome and familiar names like Evernote and Box.net (see above). Microsoft is obviously not working to extend the WinRT platform into the work realm where .NET applications, and the older class of COM applications, continue to prevail. But attempting to do so would not only be futile but unnecessary. WinRT’s whole point of existence is to make PCs and a new class of tablets desirable, and unless you’re a network TV program executive, you can’t mix desire with business.
What’s more, the barrier to entry for independent software developers into the business market has always been steep, and no online retail ecosystem will change that. Since the very first day of its existence, Microsoft has made tools for bringing individual developers (I was one of them) into the software business to make money and have fun. In the past few years, it’s given game developers a common platform for developing products in Visual Studio and easily deploying them on Xbox, including in the Xbox Live market (the company’s other successful online retail venture).
As cloud-based funding platforms are proving today, nothing is more appealing to a small business than an automated, almost turnkey system for deploying products and reaping revenue. To that end, Microsoft’s flat royalty rate of 30% of revenue for the first $25,000 per app, and 20% thereafter, is fair and competitive. It makes 16-year-olds struggling with their algebra courses and wondering if the future will be as dull as J. J. Abrams’ latest series, dream of what they can do with $17,500. And it makes them learn things and do things they had no idea they could do for themselves. Just look at all the iOS game developers today who are too young to vote, yet when they attend startups conferences for the first time, have already started up at least twice.
There is nothing particularly innovative about building a retail software ecosystem around a platform that extends itself to smartphones and computers. Yet if Apple had done it first – if a common core were introduced letting iOS apps run on Macs, and vice versa – do you really think Tim Cook wouldn’t have put on a San Francisco rollout show and sunk a billion dollars into marketing it?
No one cares about Windows any more, I’ve been told. Operating systems are dead. Mass, mainstream media is dead. People want to be entertained. It’s what they wanted yesterday, and it’s what they’ll want today.
Uh-huh. The reason people have invested so much of their time, energy, and money into anything this digital era has produced in the past two decades, is not because of what it doesnow but for the promise of what it can do soon. Seriously: The Web, the Net, the PC, the subscription TV service, the (aging) gaming consoles and platforms, and even smartphones have all underperformed the potential we know they have. Android’s continued success is proof that faith can sell a product when quality won’t.
So what can a Windows 8 user have faith in? The Start Screen (formerly known as "Metro") might not suddenly make sense to everyone tomorrow. But something might be happening in the Store that’s worth looking at, and maybe even worth shelling out a fiver. If Windows 8 succeeds, despite some of the poorest design decisions ever for a major tech product, the Windows 8 Store will be the reason why. And if Windows 8 fails, and Windows 7 marks the final resting point for progress in the PC era, the Windows 8 Store will also be the reason why.