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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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  • by Anonymous Coward on Wednesday December 12, 2012 @07:47AM (#42259047)

    Funny, when it was their OWN store, for the XBox, they wanted $40k to certify a patch on a game:

    http://arstechnica.com/gaming/2012/07/microsoft-comes-under-fire-for-five-figure-xbox-360-patch-fee/

    Suddenly when other companies want *their* cut to sell in *their* store, it's suddenly objectionable?

    Hasn't the tables really turned here, Apple doesn't need MS Office for the iPad to be a success. Indeed Microsoft needs certification for it's Office 365 to succeed. Oh how the mighty have fallen.

    If Microsoft didn't release it for iPad, so what Polaris office or similar would work just fine.

  • by SerpentMage (13390) <ChristianHGross AT yahoo DOT ca> on Wednesday December 12, 2012 @08:00AM (#42259125)

    No Apple has a point here. The reason why Apple charges 30%, even if that may seem high, is that its FAIR! How many times do bigger companies have an unfair advantage over smaller companies? Apple is saying, "hey big or small you pay the same fee!" Of course Microsoft is irked because they play by a different set of rules. Rules that they like to make up. Oh wait, this is the company that has been charged with monopolistic practices.

    My answer to Microsoft, "tough shit live with it!"

  • by Anonymous Coward on Wednesday December 12, 2012 @08:02AM (#42259139)
    You claim that if you buy a gift card in a store, the store takes a "generous" cut. This is not the case. I am in a position where I order these gift cards for a large retail chain in the US. The margins on gift cards are 1 to 2 percent. So for that $50 gift card, the store profits 50 cents to a dollar. I wouldn't call that generous at all. The only reason we sell them is because people tend to not come in and only buy gift cards, they tend to also pick up greeting cards (a HUGE profit center, percentage wise) and other gift-related items at the same time.
  • by HumanEmulator (1062440) on Wednesday December 12, 2012 @08:41AM (#42259357)

    As a small developer, I would love if Apple took a smaller percentage of app purchases (which as others have pointed out isn't really 30% when you factor in referral fees, retail markups on iTunes gift cards and the credit card processing fees they pay out), but it's great that by enforcing rules they are effectively taking a step toward leveling the playing field for the small guys. (Instead of giving sweetheart deals to fellow big guys.)

    But in this case, we're not talking about app purchases-- we're talking about transactions that occur in an app, and this has always been a questionable rule. It a straight tax on transactions. It's in the same vein as Verizon demanding Google pay them because Verizon customers are accessing Google "through their pipes."

    And it's more inconsistent than people realize... I routinely place orders for food in the Delivery.com and the SeamlessWeb apps and because I have no credit card on file with either, I enter my credit card info for payment instead of using an iTunes account. So no 30% goes to Apple for my burrito, but DropBox leaves a link to their website in their SDK and suddenly all hell breaks loose. But Apple has a DropBox competitor and doesn't currently offer burritos I guess...

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

    by Anonymous Coward on Wednesday December 12, 2012 @08:54AM (#42259409)

    Microsoft only takes 30% for the first $25,000 of a given app. After that it's 20%.

    More importantly, they allow third party in-app subscription transactions and do not take a cut of that. That is a very major difference to Apple.

  • Apple to MS: No (Score:5, Interesting)

    by Tridus (79566) on Wednesday December 12, 2012 @09:04AM (#42259481) Homepage

    At this point, MS needs Office on iPad more than Apple does. I know that's not the accepted conventional wisdom, but the truth is that in the BYOD trend, people want iOS and Android devices. No CEO walks down to IT and says "I really want a Surface RT!" They do want an iPad because they see their kids with one and think it's fancy and way more portable than the laptop they have now (which it is).

    The danger for Microsoft is that as CEOs suddenly find that they can get by just fine with an iPad and no Office on it, they're going to look at the budget and ask why they're paying MS massive sums of money for Office enterprise agreements. Office is a huge cash cow, and the last thing MS wants is people using something else. Using Office on Surface is ideal. Using Office on iPad is alright, since it continues the Office lock-in. Using something else on an iPad is a nightmare scenario in Redmond.

    Apple would like to have Office, but the truth is that they're doing just fine in the enterprise without it. They don't have to cut Microsoft any special deals, and indeed not doing so makes them look good in the eyes of pretty much all other app developers: everybody likes a level playing field a lot more than they do an environment where Microsoft is special. (That doesn't even mention people who have done Xbox development and would love to see MS get some of its own treatment back, given how lopsidedly awful the terms for development on that platform are.)

  • by Swampash (1131503) on Wednesday December 12, 2012 @09:33AM (#42259687)

    Seen the market share stats? iOS is nowhere near Android in terms of market share. Making it nicely insulated from criticism of monopoly practices while it takes ALL THE MONEY ON THE TABLE.

  • by alen (225700) on Wednesday December 12, 2012 @09:42AM (#42259755)

    apple has a clear rule that it won't charge 30% for physical items

  • by jcr (53032) <jcr&mac,com> on Wednesday December 12, 2012 @09:45AM (#42259771) Journal

    30% is absurd as it is.

    I disagree. For that 30%, Apple is hosting the apps, collecting the payment and remitting it to the developer, distributing the updates, providing a global notification service, and making apps easy to find with centralized searching.

    Compare it to what software companies used to pay distributors like Ingram.

    -jcr

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

    by bhagwad (1426855) on Wednesday December 12, 2012 @10:06AM (#42259953) Homepage

    FYI, a cup of coffee costs less than 10 cents in India (which is where I live). We're talking about about 1000 cups of coffee every year for no tangible benefit since I get the same for free on Google Play.

    It may seem less, but I have this thing against throwing money away when I don't have to....

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

    by TheRaven64 (641858) on Wednesday December 12, 2012 @10:10AM (#42259979) Journal
    The difference is, it's much easier to opt out of the Apple ecosystem. When was the last time someone sent you an iWork document to collaborate on? When was the last time someone sent a Microsoft Office document? Apple may be more restrictive, but as long as that restriction only applies to people who actively opt in to their environment, it's much harder to care.
  • by recoiledsnake (879048) on Wednesday December 12, 2012 @10:50AM (#42260437)

    Perhaps for apps, but Apple does nothing like that for in app purchases like Kindle ebooks or Netflix or Office 365 subscription(the fucking topic we're supposed to be discussing btw) but still wants to charge 30%. How do you support that?

  • by NatasRevol (731260) on Wednesday December 12, 2012 @11:23AM (#42260807) Journal

    What part aren't they doing from the list above?

    Hosting app/in-app purchases - yep
    Collecting payment - yep
    Remitting to developer - yep
    Distributing updates/purchases - yep
    Providing notification service - yep
    Making apps/updates easy to find - yep.

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

    by fuzzyfuzzyfungus (1223518) on Wednesday December 12, 2012 @11:28AM (#42260851) Journal

    Wait, Apple wants you to pay for the infrastructure that your app uses?

    The horror!

    No, Apple wants to be paid for any goods or infrastructure that happen to be sold through programs running on their devices. Stuff that they had absolutely no relation to, 'skydrive' server space in some MS datacenter, accessed through the user's ISP, Kindle ebooks licensed by Amazon and downloaded directly from them, that sort of thing.

    That is where the in-app-purchase rules get interesting. Yes, obviously, Apple doesn't want "Pissed-Off-Pigeons, $3.99" to turn into "Pissed-Off-Pigeons-Lite $0, in-app-upgrade $3.99, no money goes to Apple!"; but the cut is the same whether the in-app purchase is essentially just another ITMS download, or a wholly 3rd-party transaction for some good or service provided entirely by a non-Apple entity.

  • by DragonWriter (970822) on Wednesday December 12, 2012 @11:58AM (#42261203)

    No, Apple wants to be paid for any goods or infrastructure that happen to be sold through programs running on their devices. Stuff that they had absolutely no relation to, 'skydrive' server space in some MS datacenter, accessed through the user's ISP, Kindle ebooks licensed by Amazon and downloaded directly from them, that sort of thing.

    Google requires a similar cut for in-app purchases made through Google's payment handling system, the difference is that Google doesn't require apps to use Google's payment system for in-app purchases when the good or service can be used outside of the app itself whereas Apple requires all in-app purchases to use their payment system and be subject to the 30% cut. Google's system prevents you from using in-app purchase to bypass the 30% cut on the store by making the app free and providing essential functionality through an in-app purchase, Apple's approach is considerably more intrusive.

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

    by SvnLyrBrto (62138) on Wednesday December 12, 2012 @12:16PM (#42261389)

    Even more importantly, since Apple takes care of all the credit card stuff, and as an app developer you never have cardholder data in your possession; you don't have to worry about PCI DSS compliance.

    I have enough headaches enforcing PCI at work. If I had to deal with it at home I wouldn't touch the App Store, or anyone else's mobile store, with a 10' pole.

Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth. -- Nero Wolfe

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