Monday, September 30, 2019

Software as Business

Oluseyi Sonaiya:

Web applications have certain advantages, such as every user being updated to the latest version whenever you want, but also come with certain expectations such as user-created data being stored remotely and needing to be exported/downloaded to a local device. This expectation allows web app publishers a measure of leverage, in that they can charge a fee to grant users access to the data they create using the app.


The demand for performance at scale drives them to something they can install locally, and use local file assets against, simply periodically syncing to remote (“cloud”) storage. This is the Adobe Creative Cloud model, charging for continued access to the programs[…] These petitions were unsuccessful, but I firmly believe that the response to this change by Adobe spawned dozens of new design and creative applications, almost all of which opted for the “traditional” pay to purchase/license in perpetuity model: Pixelmator, Procreate, Affinity Photo, Affinity Designer, Sketch, LumaFusion, etc.


Overlapping all of this were changes in user expectations around the price of downloaded and installed application software, driven primarily by Apple’s App Store. While early apps had price points comparable to desktop software of the early and mid-2000s, the competition for audience and the willingness of publishers of substitutes to undercut each other on pricing created a “race to zero,” such that today the average app’s price is barely $1.

Update (2019-10-11): Isaiah Carew:

i think many assume the app store price pressure is the new normal. that user expectations simply changed for all software one day.

but outside of mobile app store the $1 app expectation never took root. there is pressure to reduce prices sure, but nothing like the app store.

Isaiah Carew:

I believe (and base my business strategy - what there is of it anyway) that there is still a very active market for pro-sumer productivity software priced under $100.

the market is much smaller than mobile, but the user-base is willing to pay reasonable prices for useful tools.

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