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Open webOS Professional Edition to be how Gram makes money 24

by Derek Kessler Fri, 12 Oct 2012 10:29 am EDT

Open webOS Profession Edition to be how Gram makes money

When HP decided to offer up webOS as an open source operating system, there was one question nagging at the back of our minds: how is this going to make them money? We're not really concerned about HP being able to pay their bills, but given the current fiscal state of HP, they're not too inclined to waste money on projects with little profit potential. A purely open source operating system isn't going to result in an abundance of cash flow on its own.

Having already written down a $3.3 billion loss on webOS, HP's still ponying up cash to fund webOS operations as part of the newly-quasi-independent Gram. They even paid for a swanky new office remodel to host the company. But that still doesn't explain how Gram is going to make money. We got a bit of a hint of that when HP completed the open sourcing of Open webOS 1.0 late last month; the open source version of webOS was lacking in any of the expected cloud services (App Catalog, backup, etc) we've come to know as part of webOS, but HP said that they would be willing to provide those services through a business agreement with a partner manufacturer.

That's one piece of the Gram-making-money puzzle. The other will be Open webOS Professional Edition.
Open webOS PE vs. Open webOS follows a similar model to that of Red Hat. The Fedora open source Linux-based operating system is an open source project free for any and all to use, the company offers on a subscription basis the Red Hat Enterprise Linux operating system on top of that with support and additional enterprise-related bits. This business model of giving away the base product for free and selling vital services on top of it resulted in Red Hat bringing in $1.13 billion in revenue in 2012.

For Gram, Open webOS PE is an opportunity for income. As HP SVP Martin Risau said in an email to the transitioning employees of the webOS GBU/Gram, they "anticipate that once ODMs [original device manufacturers] look at Open webOS, they will be enticed to come to Gram for the professional version".

Whether or not this will prove to be a viable strategy is still up in the air. While fans of webOS continue to be rather fervent, there's not yet been a demonstration of sustained popular demand for webOS. Open webOS PE is going to need to be more than Open webOS with reintegrated back-end cloud services. It needs to be markedly improved from the features standpoint. These ODMs Gram is hoping to draw in are used to Google's Android and maybe Microsoft's Windows Phone, where the heavy feature lifting has been done already and the ODM gets to customize the OS (at least with Android) for what they think their customers want.

It will likely be a while before we actually see Open webOS PE products out there. As Risau wrote, "This is just the first step in a long-term strategy."

24 Comments

Steps forward, sturdy and hopeful. The crowd that still cheers -- now cheers a little louder.

I think they should have salesmen targeting industry-specific or even company-specific hardware devices, where companies such as rental car agencies have custom hardware devices, and then also have a services division of consultants that will help build their apps.

I don't see them cracking into the popular Android/iPhone market anytime soon.

Nice, baby steps! But I don't want to get too excited... Still a long way to go...

I guess these ODMs are going to have to be willing to adopt the open source platform with the knowledge that HP will, at some point, withhold features for the professional version. That's fine for established platforms but I'm not sure it will work for a start-up platform.

OEMs (ODMs?Bitch please) will look at Open webOS and flock to Gram to buy the Professional Edition? Instead of just taking a free platform and messing with it enough as they can do with Android right now?

Honestly, I think they're deluding themselves. Monetizing the system is key, but as with Amazon, money is in the apps, it's in the hosting. If you convince devs to use your servers to host and vend their apps then you can have a revenue stream. There's also money for services like Synergy (yes, I'd pay for that), plus other apps that the team has up their sleeves. I think that the only way to make money from the OS itself is providing OTA updates for bugs etc. But hey, that's just my opinion

This is exactly the business model that Red Hat adopted and it is working pretty well for them. No company wants to adopt an operating system for a platform just because it's open source unless they're willing to spend more money in getting their internal dev team up to spec (which of course could happen in parallel). Gram just needs to show that Open webOS is a great end-user and development platform and that Gram is ready to support companies as they design and build whatever application they have for it.

Look at Linux: the biggest deployments that had the least amount of trouble getting implemented were done with the help of companies like Red Hat, IBM, SuSE and Ubuntu.

I see your point. Hopefully it'll work out for them, I see the model working for open source CAD vendors (making money from support including training rather than the software itself) so in theory it'll work

Given that Microsoft will come calling for licensing fees like it has with many manufacturers shipping Android products, it's not really a free platform. But that's not to say that MSFT may try to do the same thing with webOS if it gains enough traction in the marketplace.

well of course they will

however this turns out, just hoping "long term" doesnt equate to 6/7 weeks...

...thinkin of new phrases for tech that doesnt last or was given a chance

"dont pull a Touchpad" - (out for a while, then gone)

i guess techinically the Touchpad pulled a 3DO(whatever did happen to 3DO)

gr.am is down atm

They've gone here

http://www.gram.com/

.

Hmmmm...how about that. I guess I was ok with the "gr.am" thing, but this is easily better.

an interesting plan. Where i'm skeptical is this. I understand why you'd be ok buying enterprise software like linux and being ok with paying for the tech support. But what i don't get is why would a company want to buy tablets on the knowledge that they'll need tech support later and that's what they are paying for? It seems to me tablets are the sort of things you just expect to work properly without needing tech support. I'd think that would deter people not attract them. I don't get why they don't just license the OS out right. Maybe at this point they have no takers but anyways seems peculiar this thought process to me.

maybe they want to sell the idea of "just sell the HW and we take care of all the SW including final customer support"... they may want to give the ODM/OEM that "peace of mind"... I don't know, hehe...

HP couldn't get anyone to license webos or buy it. So HP made webos opensource to lower the risk of adopting webOS. The hardware companies (maybe 2nd, 3rd tier ones in other markets where iOS and android don't dominate fully) are ok with throwing the hardware pieces together but have minimal software skills. They are willing to pay HP to do that IF HP stays out of the market but hosts the cloud services, app market, backup stuff. Hell, HP can lend their tech support staff for cash.

"(maybe 2nd, 3rd tier ones in other markets where iOS and android don't dominate fully)"
...erm, which is where exactly??? Are you sure it is somewhere on that little blue planet that goes around our sun?

No business just goes in and pours in money on R&D without at the same time doing presales or even actively checking out the market. I'm sure Gram has already been in talks with various potential customers. I just wish they could announce some soon. Maybe even show these companies how much consumers would be delighted by webOS done right.

So, if a ODM is actually was interested in Open webOS, they could talk to Gram and BUY the PE edition? What would be the difference between Open webOS and Open webOS PE? (excuse my ignorance)

I think open webOS is good for people who want to install webOS on their devices like smartphones or tablets. But if you want to make your own platform of mobile devices then you can pay HP to set up the platform and related cloud services. Doesn't have to be consumer tablets or phones. Maybe a niche like medical tablets for an electronic medical record company or data collection devices that run webOS and have HP cloud services. Basicly HP provides a easy mobile software solution for OEMs.
Could any mobile phone OEM get interested in webOS? Who knows but Android is really getting taken over by Samsung. While Android is a very successful platform, it's leaving lots of OEMS in the cold which will make them look at alternatives like windows 8 and as a long shot webOS.

So, if gram now is going to provide the cloud services for Open webOS PE, what about the existing cloud services for those of us with WebOS 2.x and 3.x devices with current accounts? Will they be responsible for keeping the AppStore and Palm profile backups going, or is HP going to keep doing that....but for how long?

not too long, I believe - maybe another year at best

I'm starting to lose hope in ever seeing a new Web OS phone ever again.
can't we have a phone like Iphone 5 or Nokia 920 with Web OS ffs

Hiring new engineers, a pie-in-the-sky system of receiving payments for software support....it's all window dressing to help sell Gram off. You can't expect anybody to buy Gram for a billion dollars when it's an incomplete o/s and a handful of patents. Need to toss a few assets in and make it look like a ground floor opportunity. If it was a good idea to start, they'd have never boarded up WebOS the way they did in the first place. It's value added points, trying to get value, rather than tossing WebOS in a dumpster and moving on with no costs. HP needs cash, they still don't have the stomach to build WebOS into a viable profit center.