Everybody is jumping on the “app store” bandwagon.

The model that Apple has used quite successfully with the iPhone is being adopted by the makers of the Blackberry, RIM; and Google will be offering an app store of its own for Android applications.

Not wanting to be left behind online as it has so often been in the past, Microsoft is planning to develop one of its own.

During a Q&A session at a conference in Sydney last Friday, Microsoft CEO Steve Ballmer stated that Microsoft is planning to launch an app store that will “let programmers sell their wares directly to consumers.

He complimented Apple on its app store for the iPhone as well as Facebook, which has an application platform but doesn’t allow developers to sell their apps.

Ballmer noted that “both of those companies have made it easier for developers to distribute their applications” and stated “the general concept of giving developers a way not only to get their code distributed, but to really get visibility for the code, is a good idea.”

At the same time, he also observed “there’s not much money being made.”

He’s right on both counts.

Apple’s app store was an ideal way for Apple to build an ecosystem around the iPhone. Apple gets to control the ecosystem and collect some of the revenues from it. Developers get distribution through Apple and Apple handles the tedious parts of the process, including payment and delivery.

Yet this ecosystem, as successful as it has been, isn’t exactly lucrative for everyone.

While everyone loves the stories of developers who have reaped financial rewards from their iPhone apps, the reality is that most have not. Just like in real life, the big money is made in the head, not the tail.

Of course, Apple is the snake and makes money no matter what. It can’t lose.

So Microsoft’s app store is a good idea, right?

Not necessarily. While Ballmer isn’t spilling the beans on details, I question just how sensible an app store for Windows applications will be because there are some huge differences between what Apple has done with the iPhone app store and what Microsoft can realistically do with its app store.

As noted, Apple controls the entire ecosystem (as does Facebook with its application platform, albeit in a different manner). If you want to develop and sell an application for the iPhone, you have to deal with Apple. If you want to buy an application for your iPhone, you have to go through Apple.

The overall success of the app store is based on the fact that Apple has made itself the middleman in every transaction.

Microsoft cannot do that with its app store because Windows is a bonafide operating system. Any third party that wants to develop Windows applications can do so. And they can sell those applications on their own.

Would there be tangible benefits to Windows developers who participate in a Microsoft app store?

Sure, if Microsoft implements the app store well. But at the same time, there two major challenges:

  • There are probably hundreds of thousands of Windows applications. The Microsoft app store, if not intolerably costly for developers, will contain so many applications and be so competitive that developers realistically aren’t going to rely on it as a primary distribution channel.

    Apple, of course, implemented a strategy that ensured it was the only distribution channel for iPhone apps. Microsoft can’t do that and it wouldn’t want to do that.

  • Microsoft has never been an authoritative consumer source to find software. Consumers are used to purchasing Windows applications through multiple sources.Windows users who are looking for an application aren’t going to microsoft.com to find it. They go to retailers, search engines and online directories to find them. Changing this behavior isn’t going to happen and it’s not necessary.

In short, I believe that Microsoft’s app store will likely be little more than a Microsoft-operated version of Download.com, CNet’s software download directory.

Of course, I’d be surprised if Ballmer thinks that Microsoft’s app store will do for Microsoft what Apple’s iPhone app store has done for Apple, but I question why he thinks building an app store at all is a worthwhile investment for Microsoft.

I fail to see what Microsoft hopes to accomplish. It seems like Microsoft is simply jumping on the bandwagon because everyone else has too.

At the end of the day, I’m of the opinion that businesses should do only what is worth doing. Everything else, no matter how popular, is a misallocation of resources.

I’d welcome comments from Windows users – if Microsoft opens an app store for Windows software, would you use it and why?