Monday, May 14, 2007

AppExchange vs Windows Marketplace

I discovered Microsoft's Windows Marketplace by serendipity. And was surprised to see the breadth of the solutions being sold, ready for download. Yes, we all know that SaaS is the way of the future but the fact remains that over 90% of computers sold in the world come with a Microsoft OS and this site probably presents a channel as attractive to ISVs for Windows-based software as AppExchange is for Salesforce-based solutions.

I have not seen or read a lot about this Marketplace before and am curious to find out how much of Microsoft's sales are conducted via this site, and how much 3rd-party software do they sell. The original (declared) intent of the Marketplace was to sell Microsoft software but it appears to be an AppExchange like strategy to take a cut of the revenue made by the broader ecosystem by providing a popular channel. Meanwhile, my friend and fellow Irregular, Phil Wainewright asks How is AppExchange really doing?

The Marketplace goes beyond an online ordering system by introducing the concept of a Digital Locker.
What is a Digital Locker?

The digital locker allows you to download and install the products you have purchased on Windows Marketplace, make backup CDs, and view your software licenses. Browse Windows Marketplace and choose from a wide variety of software from hundreds of resellers. Every title you purchase is available for instant downloading and many are available to try before you buy.
It appears the Marketplace runs on top of Digital River's platform. There was a press release back in October 2006 by Digital River without much details. Here is a quote:
“Microsoft is committed to enabling customers to purchase Microsoft products any time, anywhere. With Digital River’s e-commerce expertise, global infrastructure and network of resellers, we look forward to expanding the availability of our software via the Internet,” said Joe Peterson, corporate vice president, Market Expansion Platform Group at Microsoft Corp. “Through the utilization of the Windows Marketplace and other online channels, we will make it easier and more convenient than ever before for customers to buy our products in multiple countries and at multiple locations.”
Some of the key benefits (and future 'lock-in's) to the consumer include:
  • Ability to try out the software before purchase. (Try & Buy)
  • Ability to burn the software on CDs if you wish to.
  • Backs up your software purchases online automatically.
  • Integration with Windows Vista or current Windows OS through a downloadable agent.
Question for my readers - do you have any experience with this service? are any ISVs using this channel to drive signficant revenue? do you think this is Microsoft's pre-SaaS answer to AppExchange and perhaps lays the foundations for a Software+Services AppExchange killer?

1 comment:

Anonymous said...

Creating a software exchange is old wine. Red Hat has something similar -

Exchanges/marketplaces are good. However, each one of these organizations ( included) will have to deal with
1. Support and Escalation policy
- 1st tier, 2nd tier, 3rd tier
- outsourced support
2. Integration/Compatibility/Testing/Approval status of applications
3. Revenue recognition
- product vs. services vs. support
4. Sales commission
- Do sales folks get commision on partner product sales?
5. Partner Sales commision / revenue sharing.

Usually big companies can do this and sustain it. Small companies do not have the money and resources to do this.