CEO Jesse Lipson said ShareFile got swept up by Apple's increasing--yet sometimes inconsistent--enforcement of its in-app purchase (IAP) rules. Lipson had been concerned about his company's iPhone app prior to its launch earlier this year because of growing buzz around approval obstacles, but the worry was unnecessary--the iPhone app was approved in less than a week.
ShareFile's new iPad app is functionally very similar to its older iPhone sibling, aside from the obvious difference in screen size. So Lipson said he was "blindsided" when he had to fight a much tougher battle, undergoing two rejections and making a series of changes necessary to appease the final review board. The first red flag was that the iPad app sat in the review queue for about three weeks with no word from Apple. The reviewer assigned to it eventually rejected it because it didn't incorporate the IAP system.
"It was a very big surprise to us. We were totally shocked," Lipson said. "We were also disappointed that they took so long to get back to us."
Apple's terms essentially dictate that other companies must use its IAP system and fork over 30% of revenue generated by the app. ShareFile challenged the reviewer's rejection on the basis that the IAP didn't apply to its Software-as-a-Service (SaaS) model. Lipson said he has no issue paying Apple a finder's fee for new customers acquired via an iOS app, but that the IAP system simply doesn't mesh with ShareFile's platform. He added that IAP is best suited for one-size-fits-all consumer offerings, rather than full-fledged SaaS applications for businesses.
"We have fairly complex business plans," Lipson said. "IAP is just not sophisticated enough to capture that." For example, ShareFile needs to offer business users the flexibility to adjust for changing bandwidth, storage, or license needs. "Their system doesn't capture the situations that a true SaaS app like ours has to deal with," Lipson said. The argument didn't sway the reviewer, however, and the app was rejected a second time. That led to a follow-up phone call with the reviewer.
"She basically swore up-and-down there was no way our app was going to get approved without IAP," Lipson said, adding that the reviewer commented that was especially true for a file-sharing app. ShareFile decided to appeal to Apple's final review board. The decision wasn't without some risk: If the review board sided with the initial reviewer, then ShareFile's hands would be tied: Either implement IAP, or forge a mobile strategy without an iPad app.
It's not like ShareFile had much choice. The bootstrapped, 70-person firm fights for its share of the crowded file-sharing and backup market, and it knew several of its competitors had already rolled out iPad apps--some without implementing IAP--or were in the process of doing so. ShareFile focuses on business customers, for whom mobility is becoming a must. Lipson said around 10% of users have begun using one of ShareFile's smartphone apps since they launched at the end of March.
ShareFile has also rolled out a native app for Android tablets as it rounds out its mobility support, but Lipson said uptake has been slow so far. That's a function of Apple's dominance to date in the tablet market--and the influence it wields over iOS applications as a result.