When did software turn into Apps?

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13 October 2010
Craig Beattie
The rise of the App store and the many copies have demonstrated that there was clearly a gap in the market, but a gap in the market for what? There have been attempts at software stores similar to the app store before, Microsoft's Store and Direct2Drive are examples of online software stores that allow the download of software. The key difference with the App store comes from three key features. Firstly the App Store and recent clones integrate a payment scheme that doesn't require the buyer to hand over payment details. In the case of the App Store this is payment via your iTunes account, with the Android Market through Google Checkout and Research In Motion's Blackberry App World seeks payment through the mobile phone carrier. In the case of the new Windows Phone 7 platform money is taken through an online "Zune" account. In this age of increased security concerns on the part of consumers and PCI DSS requirements on organisations and software makers - this is a key advantage to the app store. Secondly the Apps are small. In fact small is considered better by users of these markets. In a world where instant gratification is king, Apps win over heavy software downloads. In mobile environments application software is now typically downloaded direct to the device over Wi-Fi or 3G networks. Most apps are less than 10 megabytes in size, with a typical App less than 2 megabytes. Consumers no longer expect software to do everything, rather it performs a focussed, useful function well. Mobile phones are in essence a set of applications that together meet the full requirements of the consumer, although there may be multiple vendors involved and a dizzying array of apps. The final piece of the puzzle lies outside the apps and the store that sells them. Historically it has always been difficult to buy software that is guaranteed to work as it is expected. It used to be, 20 years ago, that certain word processing software only worked with certain printers. Things have improved significantly since those days but most consumers would agree purchasing or finding software for your laptop or desktop machine is a much more worrying activity than it should be. Apples system software for the iPhone, iOS, and Google's Android platform solve these issues. There is a well defined, secure API which the Apps must adhere to. The Apps inform users of the types of activities they will undertake - before installation. The spectre of viruses and software that performs malicious activities is protected against and software can always be completely uninstalled. Perhaps most importantly though, the apps work. So, consumers can now find free and paid for software, that meets a well defined specific need and is guaranteed to work. Not only that but they don't need to share their payment details with all the developers in order to get access to these. As a result consumers have flocked to this new way to access software, and developers have followed them. This has a number of key implications for Insurers.
  • Consumers would never have previously bought software from an insurance company where as it is almost expected that they are able to today, although most insurers offer such software for free.
  • Staff will become less tolerant of software that doesn't work or is slow. Software that is always on, works, is functional and responsive is the new normal.
  • Staff will be accustomed to software that is sold from different vendors but that works together, perhaps laying the ground for a different kind of technology environment where staff can pick and choose software from a known list to meet their needs.
For vendors then the obvious product strategy question is clear - when will you be getting Apps? Actually this is two questions. The first is asking when your platform will have an app for iPhone, Blackberry or Android. The second is when will third party developers be able to package apps for your platform in the same way - or in a manner similar to Facebook and Salesforce. The world of software has changed forever, insurers and vendors will need to change too.


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