This article was published on December 11, 2012

Microsoft balks at Apple’s 30% fee, leaving SkyDrive and apps that integrate with it in the lurch on iOS

Microsoft balks at Apple’s 30% fee, leaving SkyDrive and apps that integrate with it in the lurch on iOS
Alex Wilhelm
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Alex Wilhelm

Alex Wilhelm is a San Francisco-based writer. You can find Alex on Twitter, and on Facebook. You can reach Alex via email at [email protected] Alex Wilhelm is a San Francisco-based writer. You can find Alex on Twitter, and on Facebook. You can reach Alex via email at [email protected]

Microsoft and Apple are currently locked in something of a Cold War over the future of SkyDrive in the iOS App Store.

Sources close to Microsoft have detailed to TNW a difficult, and perhaps unresolvable situation between the two companies that underscores the difficulty with certain Apple rules concerning its app marketplace, and how far the company is willing to go to protect its vaunted 30% cut of in-app revenues.

The difficulty began when Microsoft rolled out the ability for SkyDrive users to purchase more storage space on the service. From that point, the company was not permitted to update its application in the iOS App Store.

The reason? It doesn’t pay Apple a 30% cut of subscription revenue generated by the application through the paid, additional storage. Microsoft, TNW has learned, has a new version of the application ready to go, including a key bug fix that would rectify a crashing bug, but cannot get it through.

Microsoft does not appear keen to pay Apple the 30% cut, as it lasts in perpetuity, regardless of whether a user continues to use an iOS device or not, as the billing is through their Apple account.

Therefore, if a user signed up for a few additional gigabytes on their iOS device, and then moved to Android or Windows Phone or not phone at all, for the length of their account, Apple would collect 30% of their fee for storage. This hasn’t sat well with Microsoft.

Microsoft has persisted in trying to work out a compromise with Apple, but has thus far failed to come to an agreement. The company offered to remove all subscription options from its application, leaving it a non-revenue generating experience on iOS. The offer was rebuffed.

If a service has a subscription option, it seems, and it is not listed in the iOS store, the application cannot, and will not be allowed. That is, unless you are small enough that Apple doesn’t bothers to check. I assume that smaller companies could slip under the radar.


The second side to this is that Apple appears to be freezing out developers who build third-party applications that interact with SkyDrive, as the Microsoft service isn’t paying a cut of its fees to Apple.

Developer complaints are cropping up. For example, the following:

Our iOS app “Files Pro” [Link] includes support for SkyDrive using the official Live SDK.

A few days ago our last update was rejected by the Apple review team because of the presence of the “Sign Up” button in the Live login authorisation page. According to Apple the presence of this button violates their guideline that:

“Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected”

In short, because SkyDrive has a ‘Sign Up’ button on its login page, Files Pro had its update blocked, as the third-party service that the third-party app was trying to submit to Apple first-party App Store wasn’t paying it a cut of its revenues.

Recall that Microsoft, TNW has learned, offered to remove all paid subscription options from its application, a compromise that was rejected. TNW suspects that the sticking point in that matter was the ability to sign up for SkyDrive through the application, a ‘no’ in Apple books.

The same sources informed TNW that if Microsoft removed its application from the store entirely, the issue would remain, and that developers would not be able to interface with SkyDrive, so long as a system was not in place by which Apple could collect a cut.

Other developers are having similar problems:

My iOS app “CloudMusic for SkyDrive” utilizes LiveConnect SDK for iOS to stream user’s audio content to iDevice.  I have a “Sign In” button that invokes LiveConnectClient “login” method which shows Windows Live sign-in page in UIWebView.   The app was rejected by Apple review team saying that “the log in interface must be native and not a link or a web view.”  Is there any other way to login to SkyDrive?

In short, applications that wish to integrate with SkyDrive cannot, until Microsoft bows to Apple’s demands, and retools SkyDrive to allow for it to be integrated with the technology firm’s payment system by which the firm would garner a fee for the length of the account. A user could go into their Apple account, cancel their subscription, and then re-purchase it outside of the Apple ecosystem, but as that would save them no money, few, if any, will.

Apple’s prerogative

Naturally, this is Apple’s call; its application marketplace is its own to run as it will. However, it is not hard to say that its strict adherence to rules that may not be developer-positive is the effect of its large, strong presence in the mobile world.

However, we have been here before. Try this on for size, from TNW’s coverage of Dropbox’s earlier woes:

One such oddity has started causing an issue for apps that use the Dropbox SDK. Apparently, apps have started to be rejected left and right because of a rogue link to a desktop version of the service that allows users to add more storage to their account.

That’s right, Apple has rules against allowing users to purchase things outside of the application. If a service isn’t using Apple’s in-app purchase platform, it can’t provide an outside link to purchase a subscription service.

And around we go.

Apple has created certain exemptions from its rules, including for periodicals and other specific content varieties in set circumstances.

Perhaps a compromise could be met if Microsoft agreed to pull its first-party app, in exchange for the lifting of restrictions on third-party developers. Or, perhaps Apple will allow the app if in no way can it lead to a sale of any sort. We’ll have to see.

The last SkyDrive for iOS update came in June. How long until we see another is unknown.

Top Image Credit: brett jordan

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