One of the biggest issues for developers they face today with various app eco-systems is how to build an on going revenue stream.  This is the problem mobile developers face and why many mobile marketplaces have introduced in app purchases.

In the business world this is even more of a problem. Typically the apps are a lot more complex and require big investment to build, maintain and improve over time. It is simply not possible to build a business model on a single one time payment when someone buys an app.

What app builders need is an on going revenue stream via a subscription model.  It has been by far and away the most asked for revenue feature in the Office/SharePoint store.

Starting today that is possible. Here is the announcement.

The long and short of it is app developers can submit or update their apps to use the subscription model.  As of writing the store doesn’t seem to be offering subscriptions, but i suspect its going live shortly.

Update:  It looks like the only subscription option will be per user per month. Not yearly or something like per tenant per month/year etc…

The implications of this are HUGE.  I have heard from many people who are just not interested in building apps unless they have subscriptions. To date only ISVs with decent size and resources have been able to work around this store limitation by building their own commerce model and do their commerce and licensing outside of the store (which is allowed).  Nintex recently launched Nintex Workflow for Office 365 which does this. Licensing is managed outside of the store and they manage the subscriptions etc… This is also handy because they can deal with much more complex subscription types such as pricing tiers etc…  Managing your own subscriptions is nice because you have full control, but with it comes the complexity of doing all the commerce etc… Also by doing the commerce outside of the store you are not giving MS the 30% cut from your app sales.

I am really interested to see what other ISVs now pull the trigger and start offering apps in the store now we have this capability.  I suspect the big ISVs wont be using the store commerce model anyway … but i would expect to see some smaller ISVs coming to the party soon. 

-CJ