If you're an iOS-using SkyDrive customer, look away now -- this ain't gonna be pretty. As corporations with £70 billion in the loose change jars like doing, Apple is shaking down Microsoft to get every last copper out of its SkyDrive service -- Microsoft's not gonna give in that easy though.
The dispute is over how tightly Apple guards its app store, and specifically how it takes 30% of all in-app purchases. Everything was rosy until Microsoft rolled out the ability to buy additional SkyDrive storage in-app. The problem, from Apple's perspective, was that it didn't get its mitts on 30% of the revenue from this purchase of extra space -- that goes against their normal policy of getting a cut from in-app purchases.
The reason why Microsoft won't cough up (apart from that it doesn't want to give Steve Ballmer's sworn enemies more dough, of course) is that the users aren't just buying a one-off purchase; they're buying a subscription. That subscription may well last until long after the user has ditched their iOS device (or at least Microsoft hopes so), and hands control of the billing, and thus a continued 30% cut of revenue, over to Apple.
Essentially, you might be happily tied into a Windows Phone device a few months down the line, but because you bought your SkyDrive space through the iOS app, Apple would still be getting a chunk of change outta you. This isn't an easily reconcilable problem -- Microsoft offered Apple an olive branch already, in the shape of offering to remove all options to buy storage in iOS. Apple declined. Their policy seems to be: if there's a subscription service featured on iOS, and Apple doesn't get a cut of the subscription, you don't get allowed in. That's harsh, guys.
My real concern is that this appears to not only be affecting Microsoft's official app, but also third-party developers. For example, the developers of "Files Pro" are saying that Apple rejected their last update because the Live login page has a "Sign Up" button on it. A Sign Up button. Not a big sign saying "Hi, I'm Microsoft, gimmie your cash and I won't tell Apple", but a freaking sign up button.
Yes, it's Apple's app store and all, but as Steve Ballmer aptly demonstrates above (whilst generating ungodly sweat patches, might I say), developers are everything for a mobile ecosystem. Start shutting them out just because they work with rival's services, and you start degrading the user interface.
Equally worrying are further rumours that the spat may ultimately be all about the impending release of Office for iOS. According to AllThingsD, Microsoft want to renegotiate revenue for the Office Mobile for iOS app; allegedly Apple is standing firm. With this news in mind, then, it's possible that the SkyDrive spat is more Apple trying to gain some leverage over Microsoft, rather than just mere money-grabbing. Given what happens to us peons when Apple starts cutting out services (cough, Apple Maps), I'm hoping that Microsoft and Apple will be able to kiss and make up -- those PowerPoints won't write themselves, y'know. [The Next Web, TechRadar]