If you’re a full time independent developer, or a programmer who creates apps or software in your spare time with an eye towards making money, choosing the right revenue model is critical. However, it turns out that the most popular ways to generate revenue being used by developers aren’t the most lucrative ones. That finding comes from a new global survey of coders that sheds light on which revenue models are actually bringing in the most money.
VisionMobile recently surveyed 13,000 developers in 149 countries about a variety of things related to their work. The results of the survey were released last week in a report titled the State of the Developer Nation Q3 2015. The report covers a number of topics, including developer demographics, top platforms, and favored languages and tools. It also compares the most popular versus the most lucrative revenue models for four groups of developers: those focusing on mobile apps, cloud services, the Internet of Things, and desktop apps.
Based on this survey, here are the revenue models that developers should be using to make the most money, versus what they're actually choosing.
e-Commerce (particularly for iOS) makes the most for mobile developers
The most popular revenue model for mobile app developers is advertising (not surprising, given how easy it is to plug into an ad network) chosen by 46% of those developers who say they want to make money. However, only 17% of developers who rely primarily on advertising make more than $10,000 per month from their apps, while 72% make less than $5,000 per month and 51% make $500 or less. The report authors point out that advertising can, in fact, be lucrative, but that it requires “gigantic audiences that remain engaged for a long time.” For most developers, though, it’s not likely to generate much money.
Instead, the survey reveals that mobile app developers who rely on e-commerce (that is, the sale of real world non-digital goods and services) are making the most money. Only 10% of mobile developers are using e-commerce as their revenue model, but 37% of those who do make $10k per month or more. This, the report authors concluded, makes it obvious that “the future lies in transactions actioned from within an application.”
To get even more granular, mobile developers relying on e-commerce who primarily target iOS devices make the most, with 50% of them earning more than $10k per month. This is significantly more than the 36% of e-commerce mobile developers who choose to target Android first. “The fact remains that iPhone users are, on average, richer than those with an Android device, and are thus going to spend more on goods and services of all kinds,” VisionMobile analysts wrote.
Royalties pay off in the mature desktop market
Developers working on desktop apps, like those doing mobile apps, are choosing advertising most frequently as their revenue model. However, it’s those who are relying primarily on royalties and licensing fees who are making the most money. In total, 24% of desktop developers are making more than $10k per month. VisionMobile argued that the maturity of the desktop market makes it a good candidate for the licensing model. “It’s not a very easy model to get started with but fits the more established market well,” they wrote.
The report also noted that selling services to other developers is the second most lucrative revenue model for desktop app developers, which again, makes sense given the size of the desktop market. “Developers represent a very large group of desktop power users who need a lot of software to run their businesses,” the authors concluded.
Cloud service developers are the most likely to make good money
The survey found that developers focusing on cloud services rely the most on contract work to make money. However, similar to desktop developers, it’s royalties and software licensing that are proving to be the most lucrative revenue-generating approaches for this group. Overall, cloud service coders are doing the best among these four groups of developers, with 28% making more than $10k per month
Software licensing is working for IoT developers (for now)
VisionMobile noted that most developers working in the Internet of Things are trying to sell physical products as a way to make money. As many are finding out, even with crowdsourcing to help with funding, manufacturing and selling hardware is a difficult way to make money. What’s had better success is software licensing which, so far, has shown to be the most lucrative revenue model. However, as the authors noted, the IoT market is still so nascent, very little money is being made yet by anyone; only 16% of IoT developers are making more than $10k per month while 79% are making less than $5k.
VisionMobile’s report contains a whole lot more interesting data and findings about the state of the developer world. You can download it for free (with registration) from their website.