Windows 11 is pitching itself as the best alternative to Apple for developers, and it’s a key part of CEO Satya Nadella’s master plan for Microsoft
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At its Windows 11 event on Thursday, Microsoft rolled out what CEO Satya Nadella described as “the next generation of Windows.”
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While that sounds like the ordinary kind of marketing spin you might hear at a product launch, after watching the keynote, it’s actually a good description. Not only does Windows 11 look different than what most people are used to, but it also represents a shift in philosophy and strategy for Microsoft.
There are certainly plenty of design changes, most of which are focused on simplifying the user interface and bringing Windows closer to Microsoft’s goal of unifying the experience on laptops and tablets.
More importantly, however, are the changes to the Microsoft Store – and what it means for users, developers, and platform creators.
The Microsoft Store has never had the kind of success that the iOS App Store or Google Play on Android have, mostly because developers have been building apps and selling them directly to PC users for decades, first in boxes with floppy disks, then on CDs, and more recently, over the internet.
Selling apps directly to consumers allows developers much more freedom to create interesting business models, instead of having to follow a set of guidelines and rules set by an app store. Mobile app stores enforce restrictions on both the types of apps you can build as well as the way you’re allowed to distribute and monetize them.
At Thursday’s event, Nadella said that “Windows is the platform where things that are bigger than Windows are born.” That’s a lofty statement, but it reflects a belief that the next version of Windows can help the company maintain its position as the default software platform by opening it up and making it easier for others to build their own platforms. As long as they’re building for Windows, Microsoft’s happy.
Microsoft’s Chief Product Officer, Panos Panay, told developers, “We want you to bring any technology to the store.” Microsoft is basically saying that it just wants developers on its platform, even if it means it has little control over the business model. It’s hard not to see that as a direct shot at Apple.
Panay said that Microsoft will only take a 15% cut of apps that use its in-app purchase (IAP) system, but developers will be allowed to use their own or any third-party “commerce engine,” and Microsoft won’t take any commission at all (with the exception of games, which Microsoft treats separately from apps).
Apple and Google will happily let you give your app away for free, sell it for a price you choose, sell a subscription to your service, or offer digital goods within your app – all for a cut of all those transactions. In Apple’s case, 15 or 30%.
It’s almost as though Microsoft recognizes something that Apple hasn’t.
That is, that distributing third-party apps on desktop computers can be very profitable, but not enough to be worth the pushback you get from developers when you impose restrictive rules and conditions.
Even the iOS App Store, which some analysts estimate brings in more than $60 billion for Apple, represents a relatively small amount of the company’s total profit, but is responsible for almost all of the current criticism the company faces.
The changes Microsoft has made aren’t going to suddenly result in a new major stream of income for the company – it’s giving away Windows 11 as a free upgrade. Where it will make a difference is in changing people’s mind about the types of apps they develop for Windows and types of businesses they can build.
It’s a valid question, considering that even though the companies overlap in plenty of areas, they’re each dominant in different aspects of personal computing – Microsoft on desktop, and Apple on mobile. But I don’t think Microsoft looks at it like that.
Windows is the operating system that runs on 74% of personal computers worldwide. However, here in the US, Windows is second to iOS when you count all types of devices. If you’re a developer wanting to build an interesting app, iOS is where you start. It’s the most important platform for anything that isn’t enterprise software. Then, you’ll likely make an Android version.
That explains another of the surprising changes coming to Windows 11.
You can install Android apps natively via the Amazon Appstore within the Microsoft Store.
Users should be able to simply download apps the way they would any other software from the Microsoft Store. Those apps will run natively using Intel’s Bridge technology, which allows apps designed for different architectures to run on x86 processors like Intel and AMD.
It’s literally inviting developers to build platforms on top of its own, something Apple has never allowed – treating apps as essentially an extension of its own core platform.
Microsoft can do this because it doesn’t need any of the money it might lose as a result of developers bypassing its cut.
Microsoft made $41.7 billion in the most recent quarter ending March 31. Most of that comes from licensing Windows to PC manufacturers, selling Office subscriptions to users, and selling Surface devices.
The company doesn’t break out revenue for the Microsoft Store. In fact, as an indication of fact that it’s barely a blip on Microsoft’s financial statements, the company didn’t mention it once in either its earnings call or press release.
Microsoft is so dominant in the primary markets where it competes, in desktop operating systems and productivity software, that there’s far less of an opportunity to grow there. On the other hand, the company clearly sees an opportunity to position itself as the anti-Apple in terms of being a platform where you can build anything, including other platforms.