I was going to post about custom objects in DataTables today. But I ran across this and needed to comment (cuz, you know… I can’t help myself).
For disclosure, the whole thing is here:
So here are my top 10 most interesting points from the
Microsoft Store Developer Agreement.
(or the top 10 reasons “it’s good to be the king”):
1. 1.
Microsoft plans to charge for the account, regardless
of whether I put up any apps.
This was from my email and re-stated on the sign up
page:
“Developer
accounts are a one-time 12 month benefit. Registration and promo codes are
non-transferable”
and from the agreement:
“YOU CAN RECOVER …YOUR ACCOUNT FEE” (point #8 below….and *that* one is a doosie).
They don’t say how much. I suspect they don’t know
yet.
2.
2. Microsoft will limit what you can download
based on your manufacturer and/or cell phone provider.
“If your app
is designated as preinstallable by an OEM or other channel partner, or
"channel exclusive”…
This confirms what everyone suspected: if you buy a
Microsoft Surface branded by Borders, you’ll get content specific to Borders. In
other words, don’t expect to by a Borders Surface and download a Kindle app.
This is essential for Microsoft and Borders. But a little disappointing for the
consumer. There was a day when I got to choose which applications I installed
on my computer, but don’t expect that to continue.
3.
3. You give up a bunch of rights to Microsoft
“You grant to Microsoft the worldwide right to: host,
install, use, reproduce, format, make available to customers …, and sign the
app (including by removing preexisting signatures)…. [and] to publicly perform
and display, duplicate and demonstrate your app, pieces of your app, or
associated Marks and materials…”
Again, this isn’t unusual. They have to be able to
reproduce the app to sell it.
But a couple things caught my eye. First, they can
remove my digital signatures and put in their own. That’s really kinda scary.
Second, they get the right to “use” the app for free.
I used to work at Micro Center computer retail stores. When we wanted to use
one of Microsoft’s apps, we had to pay them for it. Just because we sold it,
didn’t give us the right to install it on our computers and use it. But this
sounds like Microsoft is demanding that.
And third, they get the rights to all my materials
for their marketing. On the one hand, that’s required. They can’t show my app’s
icon on their store if they don’t have rights to it. On the other hand, it’s a
little disconcerting if they plan on using my app to sell their product, then
don’t even pay me for that. Technically, by that argument, they could come out with
a Facebook branded Surface if Facebook submitted even one app. I’m sure they
won’t do that to Facebook, but for the small developer, things like icons and
fonts and images matter.
Also, make a mental note of this; I’ll come back to
it.
4. 4. Microsoft removes the idea of individual
licenses.
“Your Metro style app must be licensed and
technically enabled to support "roaming." Roaming is a Windows 8
feature that enables users to use your app on up to 5 Windows 8 enabled devices
at any one time”
As a consumer, my thought is “it’s about *time*.”
It’s always been annoying to me that I can listen to the same audio CD in my
car or in my home but if I want to install an app on my desktop and laptop, I’m
“supposed” to buy two copies.
As a developer, though, this bugs me. There are a
million companies that have “seat licensing” based on one individual user. Who
are they to tell me that I can’t do it? For the small developer, this may kill
some of their apps. If I have 2,000 users, but only sell 500 copies, that extra
support burden and loss of revenue could really nail me.
5. 5. Microsoft wants money… and likes BIG
developers.
“[T]he percentage of Net Receipts that is retained by
Microsoft as a fee …is 30%, unless and until your app takes in total Net
Receipts of USD$25,000, after which time the percentage is 20% for that app….”
First of all… so much for encouraging the small
developer. Out of the gate, small shops have to fork over an additional 10% of
their profit. You’ll hear a lot about how the Windows Store will foster growth
in the small developer community, but they don’t seem to want to support that
if it costs them anything.
Also, note
that the fee is based on Net Receipts not net revenue. That’s understandable
(and probably the only way they could do it), but that means I have to raise my
prices by 30% out of the gate just to cover my distribution costs. There was a
time when people said that the internet would remove distribution expenses,
making software cheaper, but this goes the other way.
Also, make a mental note of this; I’ll come back to this,
too.
6.
6. Taxes & Fees
Most of the tax and fee stuff is pretty standard.
Microsoft will charge normal sales taxes from its store. You’re responsible for
anything else. So if your state has a regulation that charges extra tax on your
software, it’s all on you. But Microsoft will collect and process the normal
sales tax.
The only concerning thing is that they take it out of
the total revenue they collect. From what I can tell, a $10 app won’t charge
the consumer $10.60 to cover the 60 cent sales tax, but $10. Microsoft will
take $3 for its fee. Then take $.60 for the tax, leaving the developer $7.40. Not
a huge deal, but again, the developers will need to inflate their prices to
account for it.
7.
7. Microsoft keeps its fee, even if I don’t.
“You are responsible for all costs and expenses for
returns and chargebacks of your app, including the full refund and chargeback
amounts paid or credited to customers”
So the developer does the refund not Microsoft. That
makes sense. But there’s never anything mentioned about Microsoft refunding the
developer for the store fee for that sale. In other words, someone downloads an
app for $10. MS takes its $3 and takes another $.60 for taxes, giving the
developer $7.40. But when the customer wants a refund, the developer has to do
it. Microsoft keeps the $3 and doesn’t back out the taxes. The developer can
either charge a fee to the consumer or (more likely) be expected to eat the
cost.
I’d expect two things: first, the refunds of apps
will get ugly, expensive and difficult. And second, Microsoft will change this
to mandate a full refund for the customer processed through its store, but
still will keep its $3. I think forcing the customers to deal with each
individual vendor for the refund will just be a looser for Microsoft, but it
will still want to recoup the cost it incurs.
The practical side of this, though, is that Microsoft
has no reason to de-emphasize sucky apps. Most sales reps are commissioned
based on sales minus refunds. Microsoft keeps its pound of flesh either way. So
it will be tempted to market the things that sell, even if those things take
massive amounts of returns.
.
8.
8. It’s good to be the King.
“YOU CAN RECOVER FROM MICROSOFT…ONLY DIRECT DAMAGES
UP TO AN AMOUNT EQUAL TO YOUR ACCOUNT FEE ... YOU AGREE NOT TO SEEK AND WAIVE
ANY RIGHT TO RECOVER ANY OTHER LOSSES OR DAMAGES, INCLUDING …LOST PROFITS…PUNITIVE
OR INCIDENTAL DAMAGES… THESE LIMITS AND EXCLUSIONS APPLY EVEN IF MICROSOFT KNEW
OR SHOULD HAVE KNOWN ABOUT THE POSSIBILITY OF THE DAMAGES. “
Translation: “It’s good to be the King. “
So, if I write an app to give you behind the scenes
access to the Olympics and I sell my house to buy a 30-second add on NBC right
at the start of the opening ceremonies, and Microsoft’s store goes down an hour
before for a planned, but unannounced, 8 hour down time… I’m just… homeless.
And if they come back online and accidently (or
on purpose) remove my app… well, too
bad. Thanks for playing.
Oh, wait, I can get my monthly account fee back from
Microsoft (they say they’ll give me $1 if I got the account for free) so I’m
good.
Who wouldn’t love this agreement? AND what’s really
cool? There’s *NO MENTION OF SERVICE LEVEL AGREEMENTS* in the whole
thing! The idea that I can’t sue them for loss of profits, even if it’s their
fault , would actually be ok, if they gave me a service level agreement of
99.999% with some financial re-imbursement if they don’t.
Remember this one too for later, too.
9.
9. It’s really, really good to be the King
“You will defend … and hold harmless Microsoft …from
and against …any and all third party claims: … relating to the use of or
inability to use the app, including any product liability claims; or … by any
tax authority based on any nonpayment or underpayment of any sales”
This is normal, really. They’re basically saying “hey,
we’re just the retail store, not the manufacturer”.
Sure, it’s a small issue that they want you to defend
against tax claims when they collect the standard taxes, but, realistically,
they’ll do what they need to do to stay out of trouble with the IRS or state
tax agencies, so that’s not much of a deal.
But here’s the cool part. Remember points 4, 5 and 8
above? Basically, Microsoft gets to use and distribute my software (or not, at
their choice). They get my logos for their ads without having to pay for them.
They get the 30% fee that they don’t have to refund. And they get a “get out of
jail free” card on any outages or mistakes that cost you money. And they get
complete immunity from prosecution.
This is a blank check. Microsoft can screw up as much
as they like and cost you as much as they want, but still use your logos and
keep your fees.
1 10.
Welcome to the future, but don’t worry, this
won’t impact desktops … unless it does.
“You may submit an app description for one or more
desktop apps to the …Windows Store. Notwithstanding anything else in this
agreement, you understand that Microsoft will not offer any desktop apps
through the Store and only Metro style apps are made available through the
Windows Store. ”
So, don’t worry. This is just for notepads, and isn’t
anything different than what Apple does.
Only…that’s not quite accurate.
The same ARM-type processors that are powering phones
and tablets are now powerful enough to power ultra-books and laptops. If you’re
bored and don’t believe me, you can see what PC World says:
Face it, the x86 architecture is on the way out for
consumers. In 5-10 years, the majority of home computers won’t be desktops, but
laptops and ultras and notepads. And most of these will probably have ARM-based
chips in them. Under Microsoft’s definition, anything with an ARM chip won’t
run “desktop” Windows 8, only Metro. Of course, they may have to revisit that
(I think they will), but who knows? It’s up to them. For right now, if you pick
up an ARM-based device, you’ll be desktop-less.
And that means that all apps will need to move to
Metro (which is MS’ stated plan, of course), which means that all apps will
need to follow this model. Sure, there will be exceptions made for large
companies who want to work around the process. But for the small or medium
sized shop… not so much.
Some people are really worried about this. Windows
Store will be direct competition to Valve’s Steam service. And their CIO is a
bit grumpy about that:
In the short term, I think one of the things that
will happen is that small-shop developers will be less than enthusiastic to
develop Metro apps. Even big shops seem pretty hesitant. Microsoft has been
paying companies to develop Windows phone software for quite a while now:
Hey, this is great for Pandora and Instagram, but
smaller shops just don’t get any of the love. I’m wondering what happens to
companies like Stardock. They make some great software and games (when I saw
Window Blinds for the first time, I had a geek-drool moment). But I don’t think
they can get MS to fund their apps. Nor do I think they will be willing to sign
off to put their apps in Windows Store. Right now, they don’t make any Metro
apps, but, again, if ARM makes it into the ultra-book market, they may have to
re-think that.
Steam is betting on desktop Linux. I’m not sure that’s
a great idea, but then….maybe. Desktop Linux has finally matured enough that
the average user can install Ubuntu without issue. And, if they get Steam’s
support, they’d get a host of apps they could add to their stack. Moreover, the
desktop OS is becoming less and less important. Chrome/Android? Mac? Linux?
Windows? WebOS? Who cares? I can get my email and watch Netflix on any of them.
Meanwhile… I want to be a king, too.
--kevin
