the onda

Over at Gigaom there is a piece called "Is the iPhone Platform Destined to Disrupt the Packaged Software Industry?" which led me to wonder why Mark Sigal (the author) thinks that there is still a for-pay software industry outside of professional niches (development, design, etc.) that is capable of being disrupted.

It would seem that the Internet killed both the channel for (CompUSA, trade pubs, tradeshows), and the reason for packaged software in the first place. You can now get from a blog review to a hosted web service, or even a downloadable app in just a couple of clicks, and increasingly people expect to be able to use what would have previously been considered "features" to products in a stand-alone (albeit connected) way. Case in point: the Picnik photo editor) .

And this is all a Good Thing because it allows us to tailor our computing experiences to specific needs instead of making big investments in money and time to get a full program which needs to justify its $20-100 price point by larding on features that some product manager feels are appropriate justifications for dollars.

So instead of looking at the AppStore today as a marketplace for applications, isn't it better to think of it as the "Customize" menu option of say Microsoft Office where any power user can choose to turn on and off features? In this model, $1-3 (or even free) might be just the right amount to charge per feature, and all of the griping that app developers are doing about the downward trend in prices might be more as a result of mismatched expectations than anything else.

Ever since Google and Amazon led the way in the monetization of increasingly smaller bits of functionality (AdSense and Amazon Affiliates being good ways for small sites/webapps to make money), we've entered an era where the traditional model for delivering functionality in big semi-independent programs is over, as well as the opportunity for reaping Lotus or Intuit-like returns on the back of someone else's platform. And in fact, despite rumors of casual gaming sites making eight figures with micropayments, I imagine that the Facebook F8 platform is probably an even more extreme case of exactly this dynamic.

To date Apple has done a poor job of treating its apps like features: they don't allow any form of rich interapp communication a la REST APIs, OLE, or even because they are Apple, OpenDoc, and they don't expose enough of the phone's interesting data in common frameworks. But this may change as the dynamic of small dollar/free transactions becomes the norm in the AppStore.

In the meanwhile, if I were an app developer, I'd either be thinking in terms of delivering monetizable features or just using the App Store as a way to driving traffic to features that increasingly live outside on the wild open web.