Modern apps can probably best be understood by comparing them with classic apps. There is some name confusion between the two. Modern apps are also known as metro apps or Windows Store apps. Classic apps are sometimes known as desktop apps (which is an unfortunate name, since modern apps run on the desktop as well). On Windows 8 and 8.1, modern and classic applications were pretty clearly separated, but with Windows 10, there's much less of a separation between the two types of applications.
To the user, there isn't much difference between a modern app and a classic app. The former runs on Windows 8, Windows RT, Windows 10 PCs, and tablets. Classic apps are built for Windows 7, 8, and 10 desktop systems. A modern app has no outside frame and fills the entire screen by default. They can, though, start in a window, and if so they often sport a "hamburger menu" and have their title in the upper-left instead of centered.
You can only get modern apps from the Windows Store, and you can only run one modern app at a time. No more multi-tasking as you can with classic apps. (I realize this can be both good and bad.) And modern apps follow a "sandboxed" security model to prevent them from wreaking havoc on your entire system. In general, modern apps tend to be more like mobile apps versus classic apps which are still designed for the PC desktop. Unless you're a developer, though, the biggest difference you'll see between the two types of apps is the user interface.
This tip (13588) applies to Windows 10.
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