Microsoft's long-term Windows 8 app strategy may backfire, say analysts

CEO Steve Ballmer courts developers just a month from launch

As the countdown clock ticks toward Windows 8's launch later this month, Microsoft has still not shown that there will be enough apps to drive users toward the new OS, an analyst said Friday.

Last week, Microsoft CEO Steve Ballmer again touted Windows 8 as a lucrative development platform, a move seen by many as a pep rally for programmers.

"There will be customers coming and looking for apps. That I can assure you," Ballmer was quoted by Wired as saying at a San Francisco event for developers. "It's going to create a heck of a lot of opportunity for folks in this room to make millions," he said.

The late push -- and the relatively small number of apps now in the Windows Store -- made one analyst question Microsoft's strategy.

"Microsoft has put a big burden on Windows 8 and Windows RT," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, referring to the tablet-oriented spinoff. "They have to have a large number of high-quality apps.... I've said 5,000 is a reasonable number...to be successful at launch. They don't need 100,000, but they need a decent number."

And Moorhead's not seeing that in the Windows Store, the sole distribution channel for Windows 8 and Windows RT apps written for the "Modern" interface. Like Apple's iOS App Store and its OS X Mac App Store, the Windows Store is curated: Microsoft reviews each submission and is the final arbiter of what can be sold or given away at the Store.

According to Wes Miller, an analyst with Directions on Microsoft, as of Sept. 26, the Windows Store sported 2,452 apps, 1,741 of them available to U.S. customers. About 86% were free.

Miller has been tracking the number of apps in the Windows Store for two months, and regularly posts results to his WinAppUpdate website.

The two-thousand-and-counting number is far from Moorhead's 5,000, and includes a large number of "filler" apps that don't meet his definition of high quality. That, along with Ballmer's continuing recruitment of developers, makes Microsoft's strategy clear.

"They're thinking long-term," said Moorhead. "Microsoft and their partners are taking a long-term view of this. What's important [to them] is getting Windows into mobility. They're not too concerned about making that first impression [at launch]."

Moorhead sees that as a mistake. "It's their strategy, but it's not what I would do," he said.

Three weeks ago, he argued that failures of other tablets, including Hewlett-Packard's TouchPad and RIM's BlackBerry PlayBook, could be traced to a lack of high-quality apps and a weak app store. "History shows that for consumers, the first impression is the one that sticks," Moorhead said then.

He's sticking to that view.

"October 26 will send a message to developers, particularly consumer [app] developers, as to whether they should stay on the sideline or step up and create an app," Moorhead said, speaking of the quantity and quality of the Windows Store's inventory at launch. "All of the focus needs to be on the consumer side, because there's not enough in Windows 8 for classic laptop and desktop users to make a move."

Ballmer provided proof of his long-term strategy with Windows 8 and Windows RT apps simply by stepping in front of developers last week. "You can develop a simple app in 30 days, but you can't develop a complex app in that time," Moorhead asserted.

Microsoft will undoubtedly strut apps from major software and service providers on Oct. 25 when it hosts a launch event in New York City, ones it's saving for a splash. And the company could spin AWOL apps in a way that will make customers delay judgment, Moorhead said.

"If, for example, a Facebook app is not ready on Day 1, but they come out on stage and promise that one will be within 30 days of launch, or within a specific time, that will be acceptable," said Moorhead.

Microsoft seems sanguine about the Windows Store's app count and even the composition of its content: The company has said little about the Windows Store and its apps, and nothing specific about the goals it has for the app market.

Miller noticed that, too. "The entire Windows 8 development cycle has been largely a black box for me," he said in a Friday post to his personal blog. His comment about Microsoft's increased secrecy has been echoed by other analysts, who have criticized the company, on and off the record, for not keeping customers in the loop as it has in the past.

Microsoft's courting of developers this late in the process shows that the company knows it's not yet made the case for Windows 8, Moorhead added.

"With the hundreds of millions of seats expected on Windows 8, it's a much better value proposition than Windows Phone, which has a very low market share," Moorhead said. "But because the current crop of Windows developers work in .Net, not Metro, Microsoft knows it needs to pull in people who develop for iOS. But [those developers] are sitting on the fence."

True, others have said.

In a survey of more than 5,500 mobile app developers jointly conducted Aug. 22-28 by Appcelerator and research firm IDC, only 33% said they were "very interested" in developing for Windows 8 tablets. iOS on the iPhone and iPad, meanwhile, garnered 85% and 83%, respectively, while Android phones and tablets collected 76% and 66%.

The poll also revealed some of the reasons why most developers weren't planning on entering the Windows 8/Windows RT app market. Most important, they said, was the large installed base of devices, and thus users, necessary to create revenue opportunities.

That, of course, is a chicken-and-egg problem: To entice developers, Microsoft has to sell a large number of Windows 8/Windows RT tablets or other touch-enabled devices. But customers are reluctant to buy such hardware without a well-stocked app store.

Microsoft has not yet disclosed prices for the Surface tablets it announced in June. It will start selling the Windows RT-powered Surface on Oct. 26, then follow with the Windows 8 tablet several months later.

"Windows 8 success is far from a sure thing," concluded Appcelerator and IDC ( download PDF). "Microsoft has to deliver a strong showing right out of the gate; with its reduced market share position and falling interest in the Windows Phone platform, developers are unlikely to tolerate any missteps. Microsoft will have to deliver for both end users and developers, from launch."

"The big question is, is it too little, too late for Microsoft and Windows Store?" asked Moorhead. "Will it be enough at launch? I just don't know."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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