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Microsoft To Apple: Don't Take Your Normal 30% Cut of Office For iOS 724

Posted by Soulskill
from the gotta-pay-the-toll-to-cross-the-bridge dept.
An anonymous reader writes "Sources tell All Things D that Apple and Microsoft are at loggerheads over the cut Apple is expected to take of Office 365 subscriptions sold through Microsoft Office for iOS, which is expected to launch sometime next year. An update to Microsoft's SkyDrive app has been rejected after the company was 'pushing Apple to adjust the 70/30 revenue split in its developer license agreement. Predictably, Apple has refused to comply. It’s not yet clear what sort of concession Microsoft is seeking, but whatever it is, Apple’s evidently not willing to consider it.'"
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Microsoft To Apple: Don't Take Your Normal 30% Cut of Office For iOS

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  • We are the 30% (Score:5, Insightful)

    by Quakeulf (2650167) on Wednesday December 12, 2012 @07:38AM (#42258999)
    It's Apple's platform. I agree that a 30% cut is a bit too much, and there could be tiers introduced based on company size, revenue, etc., but to manage this would probably be a bit too much for them, although it would be beneficial for small startups.

    But then again, what would the Microsoft do if they were in their position, suddenly play fair?
  • by pointyhat (2649443) on Wednesday December 12, 2012 @07:42AM (#42259019)

    As much as I hate Microsoft, I'm behind them here. Perhaps they should just drop all their apps suddenly and promote the Android and Windows Phone versions?

  • Re:We are the 30% (Score:5, Insightful)

    by AliasMarlowe (1042386) on Wednesday December 12, 2012 @08:05AM (#42259153) Journal

    So... just reduce the price. Zero sounds about right, and then it does not really matter who gets what percentage of it.

  • by Entropy98 (1340659) on Wednesday December 12, 2012 @08:11AM (#42259179) Homepage

    Who modded this informative?? A significant percentage of gift cards are never redeemed, more than enough to cover the retailers cut and then some.

    You think apple might lose money on 20% transaction fees????? Paypal and other payment processors charge ~$.30 + 2-3% percent transaction fees and they aren't losing money.

    Apple is making 25%+ pure profit on every transaction.

  • uh... no (Score:2, Insightful)

    by smash (1351) on Wednesday December 12, 2012 @08:17AM (#42259201) Homepage Journal

    What the fuck do microsoft think makes them so special?

    If indie developers working out of their bedroom can take the 30% so can they.

  • by SuperDre (982372) on Wednesday December 12, 2012 @08:26AM (#42259245) Homepage
    Well, if that's your defense, than MS doesn't have to adher to any monopoly rules regarding windows, as there are numerous other desktop OSses...
  • Re:We are the 30% (Score:5, Insightful)

    by whisper_jeff (680366) on Wednesday December 12, 2012 @08:33AM (#42259315)

    I agree that a 30% cut is a bit too much...

    No. It isn't. The only people who think that are those that have an axe to grind with Apple.

    a) Pretty much every other app store out there has the same deal and, more importantly

    b) When a company sells digital software themselves, they don't get to keep 100% of the sale price. They have to pay for hosting, bandwidth, marketing, sales processing, manhours involved in all of this, etc., etc., etc. Those numbers start to add up very quickly and anyone who's been even vaguely involved in producing and selling a product knows that they can quickly add up to near or above 30%. And doing it yourself doesn't give you the same marketing potential that Apple has when they do it and that marketing potential is not easily ignored.

    Seriously, the only people who still bring this up (and mod it "Insightful" on /.) are those who are utterly ignorant of reality and just want to gripe about Apple (while ignoring all the other app stores operating under the same terms).

  • by Desler (1608317) on Wednesday December 12, 2012 @08:38AM (#42259341)

    If the complaints are about Apple taking a 30% cut of in-app purchases how exactly is Android an alternative? Google takes a 30% cut for both app purchases and in-app purchases as well. Yet somehow only Apple is "evil" for doing this.

    Transaction fees for app purchases: [google.com]

    For applications that you choose to sell in Google Play, the transaction fee is equivalent to 30% of the application price.

    In app purchases: [google.com]

    The standard 30% transaction fee applies to in-app transactions on Google Play.

  • by sootman (158191) on Wednesday December 12, 2012 @08:49AM (#42259379) Homepage Journal

    Is that big mean company not being nice?

    If they don't want to pay to play in Apple's playground, there's a simple, two step solution (with apologies to Larry Wall, I believe):

    1) Make your own mobile platform

    2) Make it popular

  • Re:We are the 30% (Score:5, Insightful)

    by bhagwad (1426855) on Wednesday December 12, 2012 @08:52AM (#42259395) Homepage

    Umm...Apple already charges developers for merely listing their apps - $99 a year. That's HUGE and more than covers all the stuff you talked about - hosting, bandwidth etc.

    They don't need to do this. They're just being greedy dicks.

  • Re:We are the 30% (Score:5, Insightful)

    by recoiledsnake (879048) on Wednesday December 12, 2012 @08:59AM (#42259443)

    This is about in-app subscriptions. Microsoft, unlike Apple does not mandate that you need to use their in-app purchasing model. The Kindle app on Windows 8/WP8 would be allowed to sell books in app or link to the Kindle's site. On iOS, Kindle was forced to remove even a link to the Kindle site.

    From http://blogs.msdn.com/b/windowsstore/archive/2012/07/20/making-money-with-your-apps-through-the-windows-store.aspx [msdn.com]

    Using your own billing system

    Your app and service may already depend on a particular transaction provider or benefit from ties to other lines of business. Your customers want the trust and efficiency of a familiar, trusted transaction experience. You can use your own transaction provider within your app to provide the experience your customers expect.

    If you are not using the Windows Store as your transaction provider, you will want to make sure that your app meets all of the certification requirements such as: Identifying the transaction provider to the user during purchase confirmation Prompt the user for authentication before processing the transaction Your payment processor must meet the current PCI Data Security Standard

    So, Microsoft is not being a hypocrite here while Apple is trying to install a toll on every bought on an iOS device, even if you stop using the iDevice after a month and use the service on other devices, Apple wants 30% of the entire subscription. Guess which company gets a free pass on HN while criticism is piled on which company even while developer freedom is compromised before our very eyes. Everyone raised hell when MS proposed Palladium but when Apple implemented the Palladium spec to the letter the same journalists were stepping over each other to praise the iDevices. Same here, misinformation is being spread about the 30% cut by Apple afficionados to blame Microsoft while another facet of developer freedom is lost.

  • by gagol (583737) on Wednesday December 12, 2012 @09:08AM (#42259509)
    When we talk about Microsoft and windows... they can only be closed...
  • Re:uh... no (Score:5, Insightful)

    by dcollins (135727) on Wednesday December 12, 2012 @09:12AM (#42259533) Homepage

    "What the fuck do microsoft think makes them so special?"

    (a) $70B annual revenue, (b) $230B market cap, (c) almost ubiquitous use of their office suite for personal and business document creation.

    If you don't think that's leverage for negotiating a better deal, then you have even less business sense than I do (which is pretty terrible).

  • by Anonymous Coward on Wednesday December 12, 2012 @09:21AM (#42259593)

    Tit for tat. Why not?

  • Re:We are the 30% (Score:4, Insightful)

    by poetmatt (793785) on Wednesday December 12, 2012 @09:23AM (#42259607) Journal

    This is why people say Apple is even more restrictive than MS, and it's true. The question is whether the users realize it.

  • Delicious Irony (Score:3, Insightful)

    by Spottywot (1910658) on Wednesday December 12, 2012 @09:31AM (#42259671)
    100 posts in, and no-one seems to have pointed out that Microsoft are complaining about the same type of system they are trying to foist on developers with Windows 8. Fuck off and pay Apple what they ask for, *or* make Windows a free platform to develop on again.
  • Re:Apple to MS: No (Score:5, Insightful)

    by jcr (53032) <.jcr. .at. .mac.com.> on Wednesday December 12, 2012 @09:32AM (#42259677) Journal

    At this point, MS needs Office on iPad more than Apple does.

    Exactly. As the PC fades into history and the iPad takes over, MS has a rapidly-closing window in which to maintain their market position as the default business apps vendor.

    I know that's not the accepted conventional wisdom,

    The only people I see who haven't realized it are working in Redmond and trying to pretend that the world isn't changing under their feet.

    -jcr

  • Re:We are the 30% (Score:5, Insightful)

    by Vapula (14703) on Wednesday December 12, 2012 @09:36AM (#42259711)

    "they test and validate"...
    This leads to poor security updates for applications in apple store because of the delays introduced byt the "testing and validation" procedure.

    And that test is more about censorship (banning apps doing things THEY don't want to be done... like 3rd party in-app store, emulation or other 3rd langage interpreter to avoid "data as programs" which would bypass the Apple-Tax, ...). It's not about the good of the customers, it's only about their own good !!!

  • by mystikkman (1487801) on Wednesday December 12, 2012 @09:40AM (#42259747)

    This lends credence to my observation that prolific Slashdot posters like yourself(and the moderators) are more concerned about hating and bashing Microsoft than protecting or enhancing developer freedom which is being killed by Apple :)

  • by Tough Love (215404) on Wednesday December 12, 2012 @09:50AM (#42259823)

    The correct way to enhance developer freedom is by not having anything to do with Apple. If you are hoping Apple might some day turn over a new leaf, you are doomed to disappointment.

  • Re:We are the 30% (Score:2, Insightful)

    by Anonymous Coward on Wednesday December 12, 2012 @10:01AM (#42259899)

    So it works! You (a writer) are put off of writing "apps I code once and forget about". Somehow I think we're not missing anything here.

    Meanwhile I make $20-30 a day from my iOS apps (that I update as needed). Apple makes some too.

    While I don't like the forced mac purchase, I've made more money in Apple's closed garden then I ever did with a website or windows app.

    For a living, I'm a programmer.

  • by Anonymous Coward on Wednesday December 12, 2012 @10:02AM (#42259901)

    Well, if that's your defense, than MS doesn't have to adher to any monopoly rules regarding windows, as there are numerous other desktop OSses...

    Windows: 90-95% market share in desktop OSs.

    iOS: 30-35% market share in mobile.

    Since you seem to be fuzzy about the whole numbers thing, I'll explain: Windows has overwhelming dominance, being many times larger than all other players combined. iOS isn't even the biggest kid in its sandbox.

    Math. Do you speak it?

  • by jimicus (737525) on Wednesday December 12, 2012 @10:02AM (#42259911)

    I have mod points, but I'm not going to use them. Instead, I'm going to explain how I believe you're mistaken.

    Back in the late 1990's/early 2000's, Microsoft pretty well owned the desktop. (They still do, to a certain extent, but their stranglehold is starting to look a lot weaker) There was, for all practical purposes, no competition on the desktop whatsoever.

    (Yes, I know Apple existed, I know it was possible to run a Linux desktop, I know more than a few /.'ers did. Hell, I did. But that's not the point. The number of people who did so as a percentage of the whole market were such a tiny minority that for all intents and purposes, they may as well not have existed).

    Anyhow, back to the matter in hand. Office went through several revisions - Office '97, 2000, XP and 2003. For most end-users, there was virtually no difference between any of these versions. It didn't start to get real attention until lots of large organisations started to take OpenOffice seriously. You may or may not like the Ribbon interface, but it does demonstrate that Microsoft are taking Office seriously.

    Similarly, Internet Explorer stayed at version 6 for 5 years. It wasn't until Firefox started to gain serious traction that a new team was put together to write IE7, which was released in 2006. Since then we've had two more versions of Internet Explorer and there's a third on the way; but I don't doubt for one minute that had IE 7 crushed the competition back to 2001 levels, there wouldn't have been an IE 8 or 9.

    The point I'm making is even if you hate Apple with every fibre of your being, even if you think Ballmer should close down Microsoft and give the money back to the shareholders, probably the worst thing that could possibly happen to the technology industry right now would be for your dreams to come true. The entire industry basically moves forward from companies all cribbing ideas off each other; when there's nobody left to crib ideas from things go very stagnant very quickly.

  • Re:We are the 30% (Score:5, Insightful)

    by bhagwad (1426855) on Wednesday December 12, 2012 @10:03AM (#42259917) Homepage

    And when you give up coding, do you continue to pay $99 a year merely for the privilege of having your apps there? I work as a writer in India and earn around $10,000 a year which is a pretty good standard of living in that country.

    Why, oh why would you choose to do that when you could have your apps on Google Play for free?

    I mean, it costing less (according to you) isn't the same as it costing nothing! And I don't agree it costs less either.

  • by jbolden (176878) on Wednesday December 12, 2012 @10:23AM (#42260131) Homepage

    But it would definitely support more indie development which is one of the greatest things money just can't buy.

    The iOS store has been a huge success for indie and small development. For small developers reduced marketing costs, customer processing, reviews.... are easily worth 30%. It is bigger developers that see that cost as punitively high.

    As for opening the platform up. The problem is one of security. The security model on iOS requires the generation of provisioning files. Which means Apple ultimately has to support the distribution on an individual software -> device level. If you don't want to use provisioning files and just load whatever you want, that's just jailbreaking and that has been widely available throughout the iPhones life.

  • by denmarkw00t (892627) on Wednesday December 12, 2012 @10:47AM (#42260377) Homepage Journal

    But I can understand telling Microsoft to "shut up and take it" in this situation - unless they're lobbying for better rates for ALL developers and not just trying to push their weight around to get a better one-off deal with Apple, then they need to shut up and take it and play by the same unfair rules as everyone else who wants to be in on the iOS market.

  • by fuzzyfuzzyfungus (1223518) on Wednesday December 12, 2012 @10:54AM (#42260475) Journal

    Ultimately, it's the hardware guys who are dangerous. You can get locked into shitty software(particularly if you have an enterprise level interlinked spaghetti clusterfuck of the stuff); but the software guys can only attempt to make switching vendors more expensive than renewing your support contract.

    The hardware guys, though, can ultimately leave you with nowhere to run(your software) unless you have a truly heroic appetite for 7400s and wire wrap...

  • by fuzzyfuzzyfungus (1223518) on Wednesday December 12, 2012 @11:19AM (#42260787) Journal

    The difference here is that Windows has roughly 90% of the desktop marketshare (what is generally considered a monopoly market share), whereas iOS has an estimated 20%-50% (depending on who you ask) (30%-50% for Android).

    Source [wikipedia.org]

    The other major difference is that MS' attempts at anticompetitive behavior were fundamentally the same economic tactics that were already far from novel in 1890, when the Sherman Anti-trust act was put in place to combat them. Arm-twisting OEMs, tying, allegations of dumping, etc. Fundamentally very retro stuff.

    Apple, by contrast, has built their strategy around a much more contemporary approach: cryptographic lockdown. They have no need to stoop to any 19th-century robber baron supply chain shenanigans against 3rd party application distributors, OEMs, or whatever. It's all just baked into the hardware.

    Now, it's still a question of whether their market share is large enough for the fundamentally closed nature of their ecosystem to matter; but it is a significant distinction. If you look at regulators' treatment of Microsoft, they have largely focused on any attempt by MS to strong-arm what goes on on top of Windows, in the attempt to ensure that (while MS is the dominant platform vendor) they cannot leverage control of the platform into control of markets on top of the platform. In the case of Apple, the situation is almost the reverse: they are not the dominant platform vendor; but their dominance of all activity on top of the platform is nearly absolute.

  • Re:We are the 30% (Score:5, Insightful)

    by RazorSharp (1418697) on Wednesday December 12, 2012 @11:36AM (#42260931)

    The only thing I find shocking is that you find an anti-Microsoft stance on /. to be shocking.

    What exactly do you mean by 'promoting dev freedom by taking on Apple?' Apple's created an ecosystem that allows software developers to actually make money. Most of the crappy apps that people pay for on the Mac App store were available before the App store as shareware -- the developers couldn't find major distribution for them and no one paid money for them. When it comes to the iPhone apps, like 90% of them are junk but thousands of developers are making money off them thanks to Apple providing the market.

    I don't know where you got this idea that developers are entitled to some special form of freedom. As a software developer you're free to do whatever you want, but if you want to make money then market forces will create restrictions. But that's how it always is. A musician is free to play any type of music he wants, but if he wants to make money off his music he better play something that people will pay money for. Does a bar owner restrict musician freedom by not hiring jazz musicians? Maybe, in some abstract perversion of the word freedom, but no one's entitled to profit.

    The only thing I can conclude from your various posts on this topic is that you're very young. If you were part of my generation you would understand why people on /. (especially those low UIDs) cheer the demise of Microsoft. There's a difference between what Apple does -- leverage their platform and popularity to their advantage; and what Microsoft does -- actively bribe, lie, and destroy competition by any means necessary. Look up the Halloween Documents, for a glaring example.

    Microsoft stagnated technology when innovation should have been at its finest (look up Windows 95 and the internet). Since the late 90s Apple has done nothing but keep the tech industry on its heels by constantly innovating and creating quality products. That's why so many /.ers use Apple products and hope to see them succeed further: We remember what it's like to have no feasible alternative to Microsoft and we don't like it. Freedom. . .how quaint. The only thing I want to be free from is using Microsoft products, which unfortunately is something I can't do with my current job.

  • by Bram Stolk (24781) on Wednesday December 12, 2012 @12:05PM (#42261291) Homepage

    Yes, I am a game dev, and I think 30 percent is pretty cheap for services offered.
    Google Play offers less service: apple handles all local sales taxes for you, google does not.
    Also, flash portal royalties are often abysmal: the developer gets the small part, the portal the large part.
    30 for google play is fair, for apple App Store I would pay 40 percent as well.

  • by Americano (920576) on Wednesday December 12, 2012 @12:45PM (#42261777)

    Anybody who wants to make a competing product could quite happily target Android, Windows Phone, or Blackberry devices and ignore Apple's iOS ecosystem entirely. It's not the only player in the mobile market - hell, as Android users here seem to LOVE to trumpet, it's not even the dominant player in that market.

    "Apple has a monopoly on operating systems for iOS devices" is not a valid monopoly claim any more than Honda complaining that "Ford has a monopoly on Ford-branded cars" is a valid anti-trust concern. There are numerous alternatives, one of which Microsoft themselves own.

    I would love to see Apple open up its rules on installation from non-Apple sources... but it's not going to happen by shouting "monopoly" at them when they are a distant 2nd place in the mobile space.

  • by DragonWriter (970822) on Wednesday December 12, 2012 @01:21PM (#42262395)

    Apple's approach is also considerably more sustainable, as it pays for itself, and can therefore last.

    The Play store model pays for what costs Google money. It may not subsidize OS development, but all the rest of Google's services do that.

    What happens when Google decides to stop spending billions on Android because they still make more money on iOS?

    Google makes money from iOS use because iOS hasn't managed to monopolize the mobile OS market allowing Apple to prevent Google from being able to make money from it. Why is that? In large part, because of Android. While the long-term goal for products like Chrome (via ChromeOS) and Android is, of course, for them to become profitable in their own right, a major part of the value of both lines (Android and Chrome as Chrome-the-browser) has been in shaping what other people do in the mobile OS and browser space and in preventing/disrupting dominance of either space by a non-Google party, and thereby protecting Google's ability to continue to make revenue from its core business.

    You might want to go look at the economics of Android, including how much Google has spent on it. What happens when Google decides to stop spending billions on Android because they still make more money on iOS?

    Most likely, Google stops making money on iOS in fairly short order (and quite likely, much of the money they make outside of iOS), unless someone else with the will, resources, and ability steps in to prevent iOS dominance followed by Apple leveraging that dominance to take away Google's best revenue opportunities on the platform (and some that extend beyond the platform.) Chrome and Android serve in no small part to preventing a dominant browser or mobile OS vendor from leveraging that dominance to threaten Google's advertising and search business.

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