Windows 8 app store growth slows

Analyst links Microsoft's $100 cash-for-apps promotion to slowdown

Microsoft launched a Windows 8 app-for-cash promotion this week because growth of the company's app store has slowed this quarter, an analyst argued today.

"Month-over-month growth has slowed to just 10-15%," said Sameer Singh of Tech-Thoughts in a Friday blog post. "In response, Microsoft has launched a promotion, offering developers $100 to publish an app on the Windows Store."

That promotion, dubbed "Keep the Cash," kicked off Tuesday. Under its rules, developers who publish new apps to the Windows Store -- the mart that distributes Windows 8 and Windows RT "Modern" apps, the full-screen, tile-based software formerly known as "Metro" -- are rewarded with $100 per app, up to a maximum of 10.

The promotion ends June 30.

Singh used MetroStore Scanner to measure app growth. That website, in turn, relies on a counting algorithm created by Wes Miller, an analyst at Directions on Microsoft, who tallied Modern apps at his own WinAppUpdate.com site until last December.

According to MetroStore Scanner, after a 52% increase in December 2012 over November, gains slowed dramatically. January's total was 10% higher than the previous month's, while February posted a 9% gain. So far this month, with about a week to go, the Windows Store app count is 12% higher than February's.

As of today, the Windows Store boasts nearly 50,000 apps.

The uptick in December could have been fueled by several factors, including interest around the just-launched Windows 8 and the relatively small starting count, but it also got some inside help. Last September, Charlie Kindel, until mid-2011 the general manager of Microsoft's Windows Phone developer experience, said Microsoft was urging its own developers to build apps in their spare time.

Microsoft had used that tactic before, Kindel said, to drive up app counts for Windows Phone 7.

If Microsoft's own engineers did take time to create Windows Store apps, it was a short-lived effort, Singh said, again pointing to the MetroStore Scanner data. "At a certain point, those employees would run out of time, motivation or simply ideas to continue building apps," he wrote. "As this artificial boost is lost, it becomes more difficult to add apps to a fledgling platform."

Singh linked the slowing of the Windows Store's growth to the Keep the Cash pitch. "The timing of this promotion suggests that there is a causal relationship with the app slowdown," said Singh in an email reply to questions today.

The two events -- Keep the Cash's kick-off and the slowing of the app store's growth -- put Windows 8 and its limited-feature offshoot, Windows RT, in a difficult position. Microsoft, after all, has tied the success of those two operating systems to the Modern app ecosystem. CEO Steve Ballmer has repeatedly pitched that opportunity to developers by touting the number of likely Windows 8 machines to be sold this year.

After a spike last December, the Windows Store's growth slowed dramatically, dropping to 8% to 12% in the first three months of 2013. (Data: MetroStore Scanner; image: Tech-Thoughts.)

Last year, just three weeks before Windows 8's launch, Ballmer told developers at a San Francisco event, "There will be customers coming and looking for apps. That I can assure you. It's going to create a heck of a lot of opportunity for folks in this room to make millions."

"Microsoft is feeling some pressure," said Singh, referring to the double whammy of declining Windows Store growth and lackluster sales of Windows 8 and Windows RT hardware.

App store numbers aren't everything, of course, something that other analysts pointed out earlier this week when Microsoft launched the $100 app rewards.

"The industry has become its own worst enemy," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. "This measurement of app store success by numbers plays to the crowd." As Moorhead noted, other app vendors -- Apple especially -- frequently tout numbers as a measuring stick.

But while that's an easy way to compare app ecosystems, it's not what ultimately matters. "The app store people should be talking about how many awesome apps they have, rather than just how many apps," said Miller of Directions.

The experts agreed this week that Keep the Cash was a move for quantity, and if quality was a result, it was clearly secondary. With so little on the line, Microsoft was aiming at amateur and hobbyist developers, not the mainline firms that have yet to pull the trigger on porting existing work to Modern, or coming up with a brand new app for Windows only.

"Microsoft's asking developers to invest significantly in a new style of app," said Miller when discussing the $100 rewards. "It takes time to build a good Metro-style app, it takes time and money."

Singh blamed the slow sales of Windows 8 hardware for developer ambivalence. That's not Microsoft's fault alone, but it has to take some responsibility for its strategic decisions to emphasize touch when so few existing PCs support it, when new touch-enabled personal computers are priced higher than most buyers want to spend, and when other operating systems, iOS and Google's Android, have the tablet market in a headlock.

"At this point, the only real solution is demand-driven, in other words, higher tablet sales and app demand driving developers to the platform," said Singh via email. "But without the apps, that could be tough to accomplish. Legacy support isn't a great selling point when the key input mechanism [of touch] isn't optimized for them."

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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This story, "Windows 8 app store growth slows" was originally published by Computerworld.

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