The king is dead, long live the king! It is a traditional proclamation made following the accession of a new monarch in various countries. In modern times, it has become a popular phrasal template.
Do you remember the level of excitement we had about the idea of Apps in engineering software? More apps, even more apps… Some vendors produced quite a number of apps. Some platforms claimed to deliver apps overnight. The future of apps was bright and shiny.
After few years, we finally learned a brutal reality of apps. The average amount of apps we use is relatively small. The following TechCrunch article can give you an idea – Consumers Spend 85% Of Time On Smartphones In Apps, But Only 5 Apps See Heavy Use.
The latest news from Apple WWDC in San Francisco brought an interesting news about coming changes in app eco-system. TechCruch article Apple’s App Store at the end of the app era speaks about changes related to Apps and App Store.
My favorite passage and topic here is about subscription. Originally, subscription was king of oxymoron to app store. The idea of buying app was the one that dominate. Things are changing now.
From the beginning, developers who sell on the App Store get 70 percent of the revenue from an app, and Apple takes home 30 percent. Last week’s announcement cracked that amber for the first time, allowing a tiny fly foot to wriggle free.
Now, developers who institute a subscription fee will see their profits swell to 85 percent in the second year of that subscription. If they keep customers around, they’ll see more money. And to facilitate that, Apple also allows any app category to take advantage of subscriptions.
There are now 200 pricing tiers, though those won’t be revealed until later this year. The revenue split changes this week. Developers will now be able to allow users to upgrade, side-grade and cross-grade from one package to another very easily, and Apple is looking at ways to make the interface easier than it currently is. There is a notification when a subscription is going to be renewed and renewal is opt-in, rather than opt-out. You’ll have to say for sure it’s working for you.
The widening of subscriptions to all categories isn’t an exact replacement for a free-trial situation, but it offers a much better situation than before. Any app that decides to roll out a subscription can now offer its wares for free for a time until it requires a subscription, or to a subset of options. These already existed in some apps like news and music, but games developers — who occupy the biggest App Store category — will now be able to play with these tools.
The subscription can turn App store model towards enterprise application and open additional opportunity to long tail of developers looking for long value providing to customers.
Here is the thing, all engineering and manufacturing are exactly belonging to the category of long time value. Engineers are buying software and using it for years. The idea of buying 20-30$ app didn’t work well for companies developing CAD, CAE and other apps.
What is my conclusion? New structure of app store can provide an interesting go to market model to software companies working on technical applications in the domains CAD, CAM, CAE and provide an subscription infrastructure. Looks like an interesting opportunity. Just my thoughts…
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Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain.