The apps economy

31 May 2012

Charles Dowd, developer relations manager at Facebook

The arrival of the apps economy brings a huge opportunity to generate economic growth by writing software for smartphones, browsers and social networks.

Earlier this year, Facebook chief operating officer Sheryl Sandberg took to the stage at Davos and revealed that the growth of the social network and mobile apps in recent years has supported 232,000 jobs.

Citing a study by Deloitte, she said Facebook contributes €15.3bn of economic impact to the European Union’s gross domestic product (GDP), including 32,000 jobs and €2.3bn to the UK’s GDP.

Drilling down to Ireland, Facebook has supported 5,000 jobs and contributed an estimated €400m to GDP. The economic impact apps and services on top of the Facebook platform is estimated to be €100m in Ireland and has created 1,000 new jobs.

A further knock-on effect has been the demand for devices and broadband attributed to Facebook, estimated to be worth €100m in Ireland. This has generated 500 new jobs.

Think about those numbers for a second and realise that the social network is just one of a number of platforms from social networks, to smartphones, smart TV and even internet browsers that are creating economic opportunities in Ireland and across the world.

Apple at the forefront

Apple, which kick-started the mobile apps economy via the iPhone and which employs 2,800 in Cork with 500 more on the way, points too to the impact its platforms have had on economic growth. Since the App Store launched in 2008, more than 700,000 apps have been published and downloaded more than 10bn times, spurring thousands of new businesses.

An economic impact study estimates that Apple’s ecosystem supports 514,000 American jobs, plus 47,000 direct jobs. Globally, it employs 700,000 outside the US directly in places like Cork and indirectly in the manufacture of iPhones, iPads and other products.

According to IDC, cloud computing will result in 14m new jobs globally by 2014. In Ireland, Microsoft and Goodbody Consultants reckon 9,000 new cloud jobs could be created.

With the launch of Windows Phone and the forthcoming launch of Windows 8 with a whole slew of Metro apps, Microsoft has ambitious plans for a world where ordinary people get their apps on demand.

Late last year, Microsoft CEO Steve Ballmer summed up the apps economy opportunity.

“There’s never been a better time to have software development as a core skill. The developer community is multiplying from the hardcore developers that may be 10m people to more than 100m people around the planet writing apps, and the chance to do more and profit economically is growing.

“Betting on us and the work we are doing will be an essential part of what you do. Some 350m Windows devices will be sold this year.”

Facebook has had apps at its core since 2007 and, with the launch of Timeline and a slew of mobile apps, is a key player in the apps economy. As well as buying Instagram for $1bn, Facebook wants its new App Centre to drive the distribution of apps from the desktop to various smartphone platforms, including iOS, Android and Windows Phone.

Charles Dowd, developer relations manager at Facebook, is a seasoned software executive who has worked at Microsoft and IBM and who has started up several software companies.

Facebook business for Betapond

Varty quote

Since it arrived in Ireland in 2009, Facebook has held developer garages in London and Dublin to foster the local apps economy. “One example of a really good Irish company that has done very well on the Facebook platform is Betapond, which began life in Waterford and now has offices in Dublin, London and California,” says Dowd.

Betapond develops social media solutions primarily for Facebook, which are used in the retail, entertainment and tourism sectors for companies such as Paddy Power, Tourism Ireland and Visit Britain.

It is the only Irish company so far to make it onto the Facebook Preferred Marketing Developer Programme and, according to Dowd, the company is currently in Silicon Valley working with Facebook engineers developing an ambitious project for one of the world’s best-known brands as part of the social network’s Shipyard programme.

“Betapond was chosen from 241 businesses in the Preferred Marketing Programme by a major brand to revamp its social strategy,” he says.

Apps companies in the Facebook ecosystem represent a broad spectrum, he continues, from Zynga, which was valued at $5bn when it went public last year, to Betapond, which this year raised $1.1m in venture capital.

“Between them, the 241 companies in the Preferred Marketing Developer Programme have raised $1bn in funding to do Facebook-only things. Some of them are doing really interesting business-to-business (B2B) work, such as core CRM integration and purchasing APIs, while others are developing Timeline apps for brands like Nike,” he says.

“From an Irish point of view, my own experience has taught me that Irish software firms have to think global from day one and companies like Havok and Demonware are not mere accidents, there is enormous talent here and a good degree of gaming talent, in particular.”

And anything is possible. “If you take the guys who created the Instagram app. That was 14 guys who built something that showed the power of the cloud and the power of smartphones.

“With the Facebook App Centre that’s coming we have a strong focus on mobile and drive a huge amount of traffic to smartphones and mobile apps and we want to drive that from the desktop, as well as the phone. Our 500m mobile users will be a big powerhouse for driving more success stories for small apps firms,” Dowd says.

‘Get developing’

Planet of the apps – software leads to wealth creation

232,000: Number of new jobs spurred by growth of Facebook and mobile apps in Europe.

700,000: Number of jobs outside the US supported by the Apple ecosystem. – Apple

€1.4bn: Value of Facebook platform’s apps economy across Europe. – Deloitte

1,000: Number of jobs Facebook’s apps economy has created in Ireland. – Deloitte

9,000: Number of new jobs the cloud can generate in Ireland. – Microsoft/Goodbody

I also spoke to Keith Varty, head of content and developer marketing at Nokia, who was in Ireland recently to brief Irish app creators on opportunities within the Windows Phone platform. Varty says the apps Marketplace on Windows Phone is developing fast and as of April there were 70,000 apps there, with 300 new apps being added every day.

“The pace in terms of the number of apps that are coming to the platform is really positive. All the big-ticket apps are there, like Angry Birds, LinkedIn, Facebook, Groupon, Twitter etc. But the message we need to get out to top development talent is to get developing.”

Varty met with 20 of Ireland’s top developers. “It strikes me that developers are looking for something else and in most cases, having already developed for iOS, are looking for something new and that’s not necessarily Android,” he notes.

The key strategy Nokia is employing is to make it easier for developers to develop for Windows Phone. “Developers and designers are inspired by the Metro interface. It’s unique, it’s fresh and contemporary. Plus Windows Phone is a very context-based operating systems for starters. A lot of developers are looking for something that inspires them and for ways for content to be seen and heard.”

Varty says Nokia is taking a very hands-on approach to working with developers on where and how they target and sell content within Windows Marketplace.

“We are also ceding more than 1,000 devices over the course of 12 months into the developer community. Developers who can demonstrate that they are working on an app via Visual Basic and that they are serious about the product they are creating will be issued with a Lumia 800.”

If you think all the action is to be had on the smartphone screen in terms of app opportunities, you are wrong. In recent weeks, Google’s Chrome browser became the world’s most popular browser.

Lars Bak, a Google engineer who worked on the Chrome team from the start and who is currently driving a new software language to speed up app creation, says the purpose of creating Chrome was to drive innovation in the browser space.

He says the point isn’t who is using Chrome, or IE, or Firefox, the point is Chrome has set the standards and the result is all browsers are now faster, flexible and have clean user interfaces.

“If you look at the top browsers today, there’s a handful of them, they are all in the game of becoming better and supporting the standards of the web and HTML 5 and I think you will have a very healthy competitive space. If one browser is slacking off people will move because they will know.”

Enter HTML 5

One of the biggest game changers in the browser space and which will no doubt make the mobile web’s impact even greater is the evolution of HTML 5, which is affording app creators greater flexibility and ultimately the end user is the winner in terms of video, games and a host of different apps and web experiences.

To ensure that the emphasis is on speedier browsing and fluid processing of complex apps – imagine console-quality gaming in the average browser window – Google has created its own programming language called Dart.

Bak describes creating a new software language as a bit of an uphill battle but the reward will be the end results most web users will soon take for granted.

“We are trying to make a programming language that is easier to use for web application developers, a language that lets programmers write complex applications faster in smaller teams than Java currently permits,” he adds.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years