As reported a little while ago, Sun plans to launch their own app store for Java-based desktop applications. With Apple’s App Store having passed the one-billion download mark last month and thus proving to be a roaring success, it’s clear that Sun, like many others, is hoping to imitate and perhaps improve on the effort. But does it make sense?

Mobile vs. Desktop

Following in the steps of RIM, Google’s Android, Palm and others, Sun hopes to follow the same pattern of success that Apple has enjoyed with their App Store. However, things are a bit different here. All the current App Store competitors have a separate mobile platform with which to compete against Apple. In general, this business model makes sense because there are few other easy ways to get software onto the devices, so a centralized app store of sorts makes sense.

In Apple’s case, they intended from the beginning to have the App Store be the only way to get software onto their devices. This closed-model and high level of control, which Apple is known for, is what helped make the App Store so popular. It was also very easy to use, and provided functionality not available elsewhere. Other mobile app stores aim to emulate this “app store tie-in”, hoping to make their respective app stores the primary place to get new software for your device, thus providing the companies with a steady source of revenue.

On the desktop, thing’s aren’t so clear. For the most part, people are already able to freely and easily download/purchase and install software, either through their web browser or through content delivery systems like Steam. Sun will have some real competition on their hands because of this, and unless they can create the ecosystem to spawn “killer apps”, people won’t be flocking to it in droves. Currently, there are just too many options for getting new software onto your desktop, thanks to the openness of the system, and this will be a real problem for Sun when it comes to gaining any significant market share in this area.

Furthermore, as noted in the article, there haven’t been very many compelling Java apps, save for Eclipse and Azureus. (I only use the former) Java on the desktop just hasn’t been as much of a success as Sun would’ve hoped for, mainly because Java desktop applications haven’t had the same consistent look & feel that native OS applications have offered, with some notable exceptions like Eclipse. While Java has gained much acceptance on the server side, it may have to settle for this before looking to gain significant acceptance on the desktop anytime soon.

App Store Hype?

It should be also noted that while the Apple’s App Store has been a roaring success for the company itself, it seems that it’s not as much of a success for the vast majority of developers out there. Like most markets with low-barriers to entry, (blogging for profit, startups, etc.) the distribution of revenue seems to follow a long-tail model, with very few developers making a lot of money, with the rest only making a fraction of that.

This was highlighted by a recent TechCrunch article about the reality of the App Store, which referenced an original article by an App Store developer. In that article, the developer revealed that because there were so many apps available for download, it didn’t take much to get into the top 100 for a given category:

In order to place #34 on the social networking charts, you need 30-35 downloads a day. At the standard app store pricing of .99, and after Apple takes its cut, that means your app needs to bring in a little over $20 a day to chart at that position. And social networking is a popular category.

Thus, it would appear that App Store not as profitable for developers as the hype or large success stories would suggest. You may have a compelling app that is nicely done, but it may only make a marginal amount instead of the six-figure amounts being seen by some of the most successful apps. If this is the case with even a successful implementation like Apple’s App Store, how does this bode for Sun, which hasn’t even proven that their Java app store can enjoy similar success? Indeed, it appears that they will have a hard time attracting developers to their app store platform.

Mind you, this hasn’t stopped people from even speculating about an Ubuntu app store, though it’s hard to see this business model working well with the FOSS model of Ubuntu. Nevertheless, it wouldn’t be unrealistic, given that Canonical is trying to make Android apps run on Ubuntu, possibly allow for Android’s app store to make an entrance to the desktop through this backdoor method.

It’s all about the advertising

The advent of Internet advertising as a viable income source has been the fuel for this tranformation. Ever since the major players launched huge ad networks (Google’s AdSense and Yahoo’s Publisher Network), it’s becoming easier for sites to “make a quick” buck without apparently selling any service or product. This ad model is what allows you to sign up for a bevy of free services, from webmail to social news sites, and has been the basis for large social networking sites like Facebook. It’s also been a focal point for traditional news services, who not only have been making money off ads on their own sites, but have also bought out sites like MySpace in the further hopes of money from online advertising.

However, it’s also had the effect of making it much easier for “the little guy” to get into the business, sometimes wreaking havoc on established businesses. A great example is Markus Frind, who single-handedly started up a dating site that shook up the entire online dating industry, as he began offering a something for free that typically was a paid service. He made quite a lot of money off of his site, but overall, things were much cheaper for the “customer”. (No fees as opposed to fees)

The long tail

This sort of action by smaller companies is going to change the industry, and Markus himself best sums it up. The basic idea is that smaller startups, entirely self-funded (or at least not venture-capitalized), are taking over sectors, offering services and will be entirely happy making overall, less money than their predecessors. One need only look at TechCrunch on a regular day to see many of these startups being featured.

On the web, things move about ten times as fast, and that includes the launch of new companies and how their services will change and be updated. Where else can a business or service launch, and then suddenly be bought for $2 billion only a scant few years later? The pace at which ideas spread on the web is frightening.

Wag the tail

The best recent example of a typical industry starting to be overtaken by smaller startups is the online job search market. Typically, these areas have been dominated by sites like Monster or Workopolis. These sites are well known and established; however, recently niche job boards like those at 37 signals and TechCrunch have launched, with positive results. The idea behind these job boards seems, at first, the opposite of what would be desired – they are only known by a select group of individuals, typically those who visited the sites before the job board launched.

But that’s just the advantage – not everyone knows, so not just anyone applies to the jobs listed there, producing a higher quality of job applicants. This, in turn, makes it much easier for companies to find good people, thus cutting down on their costs, saving them money. This, of course, reduces the amount of money being pumped into this industry. Take this one comment about the TechCrunch job board (called the CrunchBoard):

We (photobucket) had posted 3 jobs on CrunchBoard and have had a positive experience thus far. We are getting less resume’s than maybe a monster or dice, but the ones we get are much more qualified. I’d be surprised if we don’t fill at least one of these positions in the coming weeks from a CrunchBoard referral. A few hundred bucks sure beats the $20k or so a recruiter will get you for.

Going from spending $20 K to less than $1 K certainly amounts to huge savings, and as more and more companies learn about this, you can bet they’ll be at least partially switching over to this model instead of traditional recruitment practices. This is really the same thing as the typical Internet user benefiting from all the free services out there – they save money, but at the cost of the previous business model suffering decreased revenues.

Whether these new job boards can maintain their level of high-quality applicants is one story, but what is sure to stay, is the fact that traditional industries are going to see their market value decreased because of low-cost Internet startups, for better or for worse.