THE “WAIT AND SEE” DEATH SPIRAL

THE “WAIT AND SEE” DEATH SPIRAL

Shane BarnhillFriday,14 December 2012

The Snap:

Earlier this week, I had an opportunity to speak at the AppNation conference in San Francisco (that’s me, above). Although I’ve done a few other speaking engagements this year — including ones at Salesforce.com’s Dreamforce event (recorded here) and Social Media Intelligence 2012 in Atlanta — this one was unique, because it was all about mobility. The event was narrowly focused on mobile apps (both Consumer and Enterprise), eschewing broader sessions on social media and digital marketing.

The Download:

Given the app-centered nature of the event, there was a lot of discussion about the merits of developing for native platforms (such as iOS and Android) versus the open web (HTML5-based web apps). Unsurprisingly, this was the most-discussed issue at the conference, with most debates settling on an “it depends, based on user needs and business requirements” answer.

And the second most-discussed issue?

Without a doubt, it was whether Microsoft’s Windows 8 can emerge, over time, to become a viable, profitable, third platform for developers (after iOS and Android). Unfortunately for the Redmond-based giant, the consensus answer of conference participants was “we’re going to take a ‘wait and see’ approach.”

This isn’t a good sign for Microsoft. Despite funding the development efforts of top app companies in order to build out its app ecosystem, it doesn’t yet have much to show for it. Windows phones comprise only a tiny share of global smartphone sales, and Microsoft is still wiping egg from its face due to cutting orders from its Surface RT tablet’s supply chain partners.

Microsoft is now five steps into Business Insider’s 12-step process for the company’s total collapse (take a close look at number 4, developers), and unless price-slashing mandates start flowing from Redmond (which are unlikely, because Steve Ballmer apparently doesn’t want our business), this situation has all the makings of an odd sort of death spiral.

The death spiral goes something like this: Developers are cautious about the unproven Windows 8 platform. Microsoft thus resorts to a high-cost approach of paying developers to build apps for the platform. This approach leads to high-priced devices, which aim to make up for the expensive developer outreach through high margins. High prices — coupled with a weak app ecosystem — lead to poor sales. Poor sales mean developers don’t make much money on the platform. Hence, developers are wary of developing for Windows 8.

Rinse, repeat. And hence, the “We’re taking a ‘wait and see’ approach.”

(By the way, I’m pretty sure that I know the way for Microsoft to navigate its way out of the death spiral, but I’ll save that for another post. I’m curious what readers would suggest, however, so hit me up with a comment below).

Hat Tips:

AppNation, Business Insider, Image Credit: Flickr/Michael Rubottom Photography for Appnation

 

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  1. […] number of apps and developers. This makes it challenging for other competitors and has led to Microsoft paying developers to write apps for the Windows phone. By developing a phone that is optimized to a single app […]

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