Software Business Idea: Make a Software Distribution Platform like the iPhone App Store and Steam

by phil on Saturday Nov 22, 2008 11:18 AM
ideas for business

How come there isn't a popular application distribution platform on Windows or Mac similar to the iPhone App Store or Steam for games?

I think now is the perfect time to make a Software Distribution Platform (SDP, my own acronym). Both Steam and the App Store have proven that the model is viable, highly profitable, and a much better user experience. This is also very timely given that consumers typically cycle through multiple machines, have always-on broadband connections, and are weary of the state of malware. Both RIM and Google are jumping onto the SDP bandwagon, and it's just a matter of time before you see an explosion (and subsequent consolidation) of an SDP market.

Here are some of the benefits of SDPs:

Reduces fear of malware

For consumers to legally acquire software online, they surf around any of the numerous shareware sites, like tucows or download.com, or they go to the individual developer's home page. While both tucows and download.com assure you that the software they distribute is safe, it's hard to trust them because they don't have a financial relationship with the developers. They're motivated by having the most number of freely downloadable shareware and trial apps. Also, if a security vulnerability is discovered later, tucows or dowload.com do not notify you to update the software.

If you download from an individual developer's site, then you are really taking a risk, and hopefully you trust the developer. Even some major developers can't be trusted. For example, Real Player software was rated by Google as spyware. Also, not all software include notification systems to deliver security patches.

SDPs, which share commissions with developers, have a financial incentive to eliminate malware. Also, they provide a centralized notification system to alert you to security updates and patches. No more going to the individual developer's websites to find out about patches. No more subscribing to e-mail lists.

Simplifies re-installations

If you format or purchase a computer, do you backup the applications that you downloaded? Do you have the installation discs that you purchased? Do you remember what apps you own?

SDPs provide you a single repository to retrieve your apps whenever you want. Plus, there is the potential with SDPs to store your user preferences online, and allow you to re-install with those same preferences.

Reduces marketing and distribution costs

I was able to charge so little for the iPhone Apps (~$1.99) I made because I didn't have to create a website to distribute them, nor did I have to spend much money on marketing. Plus I didn't have to make shareware CDs and distribute them to every Fry's or Bestbuy. Similar Tarot software sell for around $10 to take care of these costs. Plus my expertise is in development, not marketing or distribution, and so I may not have even made those applications in the old model.

Minimizes piracy, yet side-steps otherwise irritating DRM

EA's widely-anticipated game Spore had a major PR nightmare when the anti-DRM community flooded the Internet with bad reviews. Everybody complained that you could only install the game three times. SDPs are able to sidestep these by using authentication. Plus, in the case of Steam, by requiring a sign-on they can see if more than one user is signed on with the same copy.

More convenient than purchasing a hard copy of the software

If you wanted to buy Spore in a store, you'd have to first call to make sure they have it in stock (and wait on hold while the dude checks), then drive there (wastes gas, time), find it, take it to the register, pay, drive back, unpackage it, and then figure out how you plan on protecting your purchase for life (i.e. by storing it in a closet with your other software).

If you want to purchase it online, you have to find a site with the lowest price, register there if you aren't already a customer, add to cart, check out, and then wait for it arrive in the mail.

SDPs eliminate all of that.

More convenient than bittorrent

As convenient as torrenting is, there's a lot of anxiety involved in the process. First, there's the wait. It may take 24 hours before you can get a game or app installed, while as on an SDP, you're downloading immediately. Then there's the convoluted installation processes. For large games or apps, you often have to unplug your Ethernet cable, run serial generating software, and install complicated patches and cracks. And finally, when all is said and done, you don't know if the software is going to work or if there is a Trojan horse installed.

More viral

If you want to tell others about the software you just downloaded, with SDPs you can sidestep the acquisition part of the conversation. "Just get it off Steam" or "Just get it off the App Store." Some SDPs also have social potential, such as Steam. Every time I play a game, it shows up on my friends' contact lists, and they can easily join in the game. This makes sense for multiplayer games, but there could be other ways for SDPs to leverage social networks.

...Other thoughts

All of this occurred to me when I felt a tipping point in deciding whether to pirate World of Goo or pay the $20 to download it off steam. I usually choose the piracy route, but this is the first time that the alternative was just so much more compelling. (Also, the developer's article on piracy helped—apparently 90% of all software is pirated).

I also thought of this when I saw Microsoft marketing Office to college students as The Ultimate Steal, by marking it down 90% to $60. If there was a viable SDP, Microsoft could have marked it down to $20, and really have made it the ultimate steal; Microsoft would have also made up the difference on the extra volume due to convenience.

Steam took off by making it the distribution method of choice for a few blockbuster games in 2002. Any popular software developer, like Adobe, could do the same thing. Or even a niche software developer, like a maker of a semi-popular audio production app, could make an SDP just for producers: "Here is the one-stop method to acquire and manage your audio applications."