The Developer ‘App Debt’ Problem

Apple has a steadfast, long-standing policy: developers cannot directly monetize updates to the apps they have developed. Back then, this helped Apple set itself apart from the established Windows software ecosystem: Users of iPhone and iPad would be able to purchase an app once and be eligible for automatic updates/upgrades to the iOS software.

Today, hordes of developers are realizing that Apple’s policy is idealistic, and with no direct way to charge users for app updates without angering them, unrealistic at best. If they were able to completely close shop on an app having created an elegant product and have it remain viable for years, it would have taken the edge off things.  However, each Apple iOS update mandates modifications to third-party software to ensure OS compatibility. For instance, apps that aren’t updates since the iOS 6 launch can be unstable when running on the iPad or on iOS 7. Developers need to be on their feet, checking and tweaking their apps so the iOS update hasn’t broken something around their app and fixing it for free.

There Ain’t No Such Thing As a Free Lunch?

What’s the workaround for a sticky situation? You guessed right, in-app purchases! With the app already installed in users’ phones, this is a no-brainer monetization model that could defray the cost of keeping the app healthy. While on the downside not everyone pays for new features, all the users get to enjoy the stability of the app across screens.

Some other developers have chosen to launch an entirely new app, while abandoning the older version completely. In a nutshell, users have to pay up again. Although this route levels up the developers’ costs of app maintenance, they get complaints hurled at them from all corners.

Subscriptions are another way out – a monthly or a yearly fee to access all of the app’s features work for some types of apps and the developers who build them. The bottom-line here is Apple hasn’t given developers a lot of options when it comes to charging consumers for new updated content; and if they can’t find a way to monetize updates to apps, chances are, they could spiral into a black hole sooner than you can say update.

Factoring In the Cost of Maintenance

Let’s take a step back here. Before we can theorize on how to monetize app updates and maintenance after the app is launched, would it make more sense to first figure out the phantom cost of these upgrades and factor that into the initial contract with customers?

App development is no short term, one time investment. Whether developing in-house or outsourcing to an agency, a long term investment with regard to people and capital costs ought to be estimated. According to a 2013 AnyPresence survey, over 80% of developers revealed that they updated their apps twice a year.  So that’s four updates over a two year period.  For a design rich networked or server based app, maintenance costs can run up to 40% of the total project size. You can add to that for the second year.

So it’s easy to see why developers can pretty easily run into ‘app debt’ simply by providing free updates. Reach out to us at ContractIQ to help you maneuver around this conundrum right away!