**As published in RCR Wireless News** SAN DIEGO – You don’t even need access to mass media to know that app stores are all the rage in mobile these days. But how app storefronts and their ecosystems play in the enterprise sandbox is an entirely different animal. Michael King, a research director at Gartner, began his presentation at Gartner’s Wireless, Networking and Communications Summit by detailing the level of competition, interest and investment in the app space. “It seems like everybody and their mother has an app store these days,” King said and it doesn’t really make sense for everyone to have one.
More importantly, the role that each player in the ecosystem plays is going to shift and “the power’s going to be relatively fluid for the next 18 to 24 months,” he said. “The amount that you’re going to invest in these applications … and the importance that they’ll hold with your consumers becomes of paramount importance,” King said. “This will be the primary way that they interact with over the next two to three years.” Not surprisingly, the wants and needs of users and developers aren’t always in line. Users want rich, innovative applications, content and services, King said. “It’s not necessarily which applications I use, but which applications I can tell people I use,” he added, alluding to the popular nature of apps and the all-too-common desire to define oneself as cutting edge based on their personal app catalog. Developers mostly want to get famous or make a lot of money – preferably both, King said. To attain either of those goals, developers need a large customer base to sell to, business support services, storefront application promotion and marketing, market intelligence, payment processing, technology/developer support and extensible foundation services like mapping and search. King quickly reinforced this point with a little audience participation. It may sound simplified, but Apple owes at least some of its App Store success to the huge lead iTunes already had on the financial transactions side of the equation. When King asked for a show of hands from everyone who’d ever received an incorrect bill from their carrier, practically everyone started flailing their arms about as if it was an act of defiance against the carriers’ decidedly-ill ways. By contrast, when King asked for the same reaction from anyone who’d received an incorrect bill from iTunes, only one gentleman in the entire room raised his hand. Another factor that is clouding most businesses’ understanding of the space is this almost natural urge for openness, but being more or less open isn’t the end all be all, King said. Businesses have to maintain controls, otherwise apps will start bubbling through that no one uses, no one gets paid for, or worse, they get buggy and slow down the performance of your device. “The key is to be just open enough,” King added. While total app store revenue, including downloads and advertising, is project to exceed $29 billion by 2013, there are many success indicators that can help separate your business from the rest of the pack early on, King said. Differentiating and separating your business from the rest of the pack, especially your competitors, is an early success key success indicator. Practicality and convenience will continue to be the greatest driving forces behind many successful apps, even those that may not turn a profit or duplicate the strengths of other apps. King provided an example in the case of mobile banking and laid out just how much money banks stand to save if they embrace the technology. According to King, the cost of depositing a check at a local bank branch costs the bank about $9, a deposit via ATM runs about 45 cents and a mobile app can bring that total cost to the bank down to 9 cents. Charging money for apps might be a good short-term revenue generation tool, indeed app stores are equipped to make more money than we can imagine over the next couple years, but after 2014 King doesn’t expect to discover many diamonds in the so-called rough. King expects many, if not all, of these app stores to go through a roll-up period. Very large stores are going to be stocked like Wal-Mart Stores Inc. – think big-box model – and yet it’s still going to be way too hard to find what you’re looking for. The smaller boutique storefronts should fill this gap by targeting specific groups of apps. “The old model of owning an OS and making money off an OS is pretty much dead,” King added. “An end-to-end ecosystem is really the only thing that makes this successful.” King closed his presentation with an action plan that should be followed in the case of all internal employee apps. IT decision makers are much less free to make judgment calls than they should be, but still it’s always a good idea to do your diligence and review the app store viabilities and other platform restrictions in enterprise. Twelve months down the line, businesses are encouraged to again review their app store of choice and insure that they are getting as much value as possible out of all their time and effort. Considering how much the smartphone space has changed of late, it wouldn’t be entirely unheard if yet another new entrant emerged a couple years down the line.