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Interview: HP's Stephen DeWitt and Jon Rubinstein on webOS, the death of Palm, and partnering with Amazon

Interview: HP's Stephen DeWitt and Jon Rubinstein on webOS, the death of Palm, and partnering with Amazon

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Jon Rubeinstein, Stephen DeWitt
Jon Rubeinstein, Stephen DeWitt

As you may have read over the past few days, there's a new sheriff in town when it comes to webOS at HP. Stephen DeWitt, a man formerly responsible for the company's Personal Systems Group, has stepped into the role of senior VP overseeing the "webOS Global Business Unit." Jon Rubinstein, on the other hand, has moved into the less specific job of "product innovation" inside the PSG, meaning less direct input and control of the Palm group and webOS.

But executive title swaps don't tell you much about what's really going on at a company that has 300k employees, and we thought there was deeper information to dig out here. For instance, how will these changes affect products like the TouchPad and Pre 3? Does it signal another change of direction for the company? And what about the licensing chatter surrounding webOS?

Luckily, we had a chance to sit down with both Stephen DeWitt and Jon Rubinstein to hear their take on this shuffle, and fill us in on what's in store for HP and webOS. We were surprised by not only some of the answers, but by how candid both execs were. We think you'll feel the same, so read on after the break for a full transcript of the conversation.

This is my next: Explain what this new structure is? Jon, how does your role change? Stephen, what is your role going to be? Are you stepping into what Jon has been doing, or are there two new jobs here.

Stephen: As you know, it's been a year since the merger. The team here has been laser focused on building the greatest products, as you see, that we've just come to market with. During that time we've done everything we can to make sure that the Palm team is as empowered as they need to be to get these products done, and they've done that. During that year we very consciously avoided — and I don't mind saying avoided — some of the distractions that go with mergers. And now that we're in the market, it's time to expand. So, the new webOS GBU incorporates what was the Palm team, all of the organization that was under Jon... it also includes all of our ISV and developer teams. As you know, this is a critical part of the success moving forward around webOS... the passion that we can build in the developer community. So all of that group is in there. This group will also see and provide oversight to the development of all our mobile services capabilities. As you know, HP is a big company, HP has very intimate relationships with customers from very big ones to very small ones. And this customer base is clamoring quite loudly for assistance in moving their core enterprise apps to connected devices, to leveraging tools like what we've built with the TouchPad or smartphones... to integrate them into their strategy. How do they automate their field, how do they bring their knowledge base inside the enterprise, out to connected devices...

TIMN: You're talking purely enterprise here...

Stephen: Well, and commercial — let's just talk from small business customers up to big customers. So the webOS GBU will be pioneering the development of that, and we'll provide governance and oversight to the development of those programs as they're rolled out globally. And that's really the final act to the new webOS GBU — and that is the global aspect of what we're doing. We've launched or are in the process of launching in a number of countries now — US, Canada, France, Germany for example. Over the next handful of quarters, we'll take what we have now, we'll begin to expand the reach of webOS — we'll do that in a very well orchestrated order, and that will be a key area of focus for the new team.

TIMN: So would you say that the purview of webOS — how it will play with the rest of what HP is doing — has the purview been expanded? So part of you stepping in here is that you're expanding the way webOS will reach into other pieces of the company, and you'll oversee that?

Stephen: Correct.

TIMN: So Jon, what does this mean to you? What is your new role, both in webOS and Palm, and with HP as a whole.

Jon: So, roll back a bit. I started brainstorming with Todd Bradley quite a few months ago about, you know 'once we deliver the first generation product and platform', what was the right org structure to take it forward. We spent a lot of time thinking about that and talking about it. My recommendation to him was to get someone who really understood how HP operated, who's had access and understanding of the resources that HP has globally, and who could bring to bear those resources in really making webOS successful around the world. And that was kind of the thinking behind it. It was not something that I really wanted to do going forward. I've spent a bunch of years getting webOS in place... so I'd rather focus my time on where webOS goes in the future... and Todd asked me if I'd be willing to help him on the PC side as well, and we have to work that out, him and me — we haven't figured that all out yet. Whatever insight I can give to add innovation, across all PSG... but my primary goal is to help Stephen, and to really make sure that we continue the kind of innovation that we've been doing in the past going forward.

TIMN: In terms of webOS products and the OS itself — Jon, are you still leading that? Is that something Stephen is leading? Or is the rest of the company ingesting bits of webOS here and there? Are we still talking about tablets and smartphones and a mobile operating system? And if so, who is leading that development?

Jon: So the development of webOS is being driven by Ari (Jaaksi). Ari has been driving it for the last seven months, and he continues to drive it. Ari will be working for Stephen... and I'm going to kibbitz. Alright? But Ari's the guy... I mean, he's doing an awesome job. If anything, throughout all this he's getting more resources across HP to help.

We’re not building products for chipsets, we’re not building products for the next generation of fill in the blank legacy OS… we’re building products for you now.

Stephen: Yeah I really want to stress that. We're excited as heck about the opportunities around webOS, and so are our 300k employees, our 110k commercial VARs and integrators, our 13k retail partners... we got a lot of people excited about the potential of webOS, but we also know we have a lot of work to do. So to the question you asked: our goal in this was to centralize the responsibility around webOS, in this new GBU, so that as the rest of HP extends and adds value and takes it into the multiple channels that HP operates in... they're going to do that in a well orchestrated, compelling manner, as opposed to having that responsibility to distribute it across many geographies and many lines of businesses, we made the decisions to centralize it under webOS. Also realize that we make a lot of different connected devices; smartphones, tablets, we're also the largest PC company in the world, and you know... there's a lot of... I guess we're... you see as much as everybody the massive transformation that's happening in the PC world. For years this was an industry characterized by its binary baggage and plodding moore's law type evolution. That isn't going to define the pace of evolution moving forward — it's going to move much more quickly. These devices are becoming more clientized, it's about the applications and the experiences, the usability, the context of the nature of these devices, and really when you boil it down, the elegance of these devices. One of the things we were very conscious about in this transformation is we wanted to leverage Jon's expertise, and that is something that transcends everything that we build in PSG. Because this is a relationship game now, this isn't about how you eek out gross margin on the transaction — this is about how you form meaningful relationships with end customers, because the end customer becomes the design center. We're not building products for chipsets, we're not building products for the next generation of fill-in-the-blank legacy OS... we're building products for you now. And the nature of the relationship that we have with you is going to define our success or failure more than anything.

TIMN: So that's related to something I wanted to ask — you mention building relationships with customers. Compaq is a sub-brand of HP, you've retained that. Palm, the brand, has a lot of cachet and recognition with consumers — at least on the phone and tablet side. Obviously you're not going to make Palm printers, but it's clear that the Palm moniker is going away. Is it going away completely? What was the decision behind not retaining that?

Stephen: You know, I wouldn't get too hung up on that. We're very passionate about the Palm base and the Palm brand and the Palm history. You know, all of us were fanatics about Palm brands long before HP was in the equation. We're very loyal to that base and always will be. How we ultimately leverage the Palm brand going forward... I think that's a story that's yet to be written. I mean, if you look for example at what we've done with Compaq — Compaq is used in different geographies around the globe to represent a set of products that are targeted to a particular segment of customers. While we're not going to comment today on anything specifically that we're going to do with the Palm brand, its identity is out there, and we'll leverage it appropriately.

TIMN: So you're not putting it to bed completely?

Stephen: All focus is on webOS because that is the crown jewel. It is the crown jewel that brings the magic to these devices, and it will be the crown jewel that we leverage as we go forward. So putting the webOS name in a prominent place is just indicitave of the passion and the focus we have on building that platform.

TIMN: So it's safe to say that Palm as a brand is not necessarily going away?

Stephen: The Palm brand will continue to evolve. Let us do the magic that we do... you already see it in the actions that we've taken. We're very passionate about the Palm community and we always will be.

TIMN: Shifting gears — the TouchPad launch wasn't perfect. You've gotten some bad reviews. Does this reshuffle have anything at all to do with that?

Stephen: Josh I know where you're going and let me nip that completely in the bud. This has absolutely nothing to do with the first eleven days when we haven't actually even officially launched it in retail. It has been available in retail since the first of july in some retail locations, but our on-ad date — the date that everything is circled around — is the 17th of july. If you walk into a Best Buy this weekend or you walk into a Staples or you walk into any of our retailers, you will see a changed retail experience.

Why did you release the TouchPad 4G just after the TouchPad? Jon: Because we can.

You're going to see a massive amount of labor in the stores. You're going to see the butler service that we're so proud of here really be extended by our retail partners. You're also going to see our retail partners start to market like crazy. You're also going to see the media... some of our ads that are out there, but the weight on our ads is really a teaser. Starting around July 17th and beyond and all the way back to school, you will see the kind of weight that a company launching something special like this is going to put. So, this has absolutely nothing to do with that, Jon said this is something we've been discussing for some time because we knew this date was coming. We also have a number of things we're working on above and beyond webOS and above and beyond the tablets and phones that we're working on broadly across PSG, and you'll hear about that in the next few weeks.

TIMN: So if this has been a long time coming, is it the case that the Palm team has basically been in a vacuum? The plan was to let them get their heads down and get the TouchPad out, and then open it up?

Stephen: I know you know a lot of products and how they're built. How many products do you know — and you've reviewed this product — that have been built literally from the ground up in less than a year?

TIMN: Well okay — so if all this labor went into it and you have this big splash happening on the 17th of July... why not just hold the release until then?

Stephen: Yeah, that's a good question. In hindsight everything is clear. We had very compressed schedules in the 11th hour, and we had a very passionate base of people that we wanted to show the product to. If you look at the negatives that are out there, I think there are a few things that we clearly didn't communicate right. When you see a review that says 'fantastic OS, elegant... clumsy hardware,' you know, I've got to love the fact that this is referred to as clumsy and fat. There's nothing clumsy or fat about this. The fact that we're a few millimeters bigger than a second generation product is because we made a conscious decision to add capabilities inside the touchpad that we feel are desirable to an end user, like inductive charging. So to not be sitting there, wires all over the place... which frustrates people... and we know that.

TIMN: But it does seem premature the way you rolled this out... now you're saying 'the 17th is the real launch.'

Stephen: You know, you're right. I don't think anybody is going to push back. If you look at comments around a handful of the apps or certain elements of the product... the overwhelming majority of these will be fixed in that OTA update that we have planned for the end of the month. I will tell you, for HP broadly, this is a new mantra — if you will — of having a tethered relationship with an end consumer, and delivering innovation literally on a daily basis. My apologies from the get-go if we somewhat stumble and bumble early on in this process. It's one of the reason we've got the butler service out there. To make those first 90 days as exceptional as we can. And we're going to have a very high touch, intimate relationship with all of our customers. But we're going to have to get used to how we communicate that this innovation is coming every day. These products will have more capabilities, more stuff. And the developer community will take this product and do the magic that they do.

Jon: One more thing, don't forget that we have our OTA update coming soon. As we discussed, it's been under development for three, nearly four months, and it's terrific. We want to be sure you get a unit with that on it and take a second look.

TIMN: Will that be available by the 17th?

Jon: No.

Stephen: Some elements will be available, improvements to our movie store, the Kindle app... but the OTA is planned for the end of the month. And we'll use this as an opportunity to go back to the reviewer community... you also saw probably the announcement that we have our 4G tablet in the pipeline with AT&T, and we're working on that. There's going to be plenty of stuff to talk about. If we end up turning around those reviews, and people say 'hey HP fixed that stuff'... that's going to be the case you should expect. But you don't just whip these up; there's a full engineering effort behind them.

TIMN: I'm glad you brought up the TouchPad 4G. The PR says this device has a faster CPU than the TouchPad you just released to consumers. Can you explain why there would be a difference between this new product, and the one that was released about two weeks ago? Why the spec difference?

Jon: Because we can.

TIMN: Well, if I went out and bought the TouchPad, and then 14 days later I hear there's a new one with a faster CPU, I would feel a little burned by HP.

Jon: C'mon Josh, recognize first of all that it's not available 14 days later.

TIMN: Well I'm saying, if I bought an iPad and then the next day I heard there was going to be an iPad Plus, I would feel a little burned by it.

Jon: Well, it's a 4G version. It's a different product. And you know what? It shows you how fast we're going to innovate moving forward. You should expect a steady stream of interesting products coming out of here. We've been working on them the past year, and we're going to keep driving them going forward. This is something you should expect, and we're going to keep giving customers a choice of what they want to get, and you know, keep adding value to the product line.

We're not just going to sit back. You guys complain 'Oh we don't like this hardware' well you know what? We have a lot of stuff in the pipeline you are gonna like.

We're not just going to sit back. You guys complain 'Oh we don't like this hardware' well you know what? We have a lot of stuff in the pipeline you are gonna like. Furthermore, there's going to be more than just one product. As of today we have 16GB and 32GB, you'll have 4G, you'll have faster processors. There'll be a variety of configs at different price points that bring different values to different customers. It's all a matter of what you want.

TIMN: Well, from my perspective, this does seem a little odd. Why bump the CPU? I get the storage capacity, but why a CPU difference? It seems like you'd want both of these guys clocked as hot as possible — they're not just in the same family... they're the same product. What is the reasoning behind it?

Jon: It's the same CPU. You know this stuff...

TIMN: Okay, so will you clock the current TouchPad to 1.5GHz?

Jon: It's not a software issue. It's a processor yield issue.

TIMN: I'm confused... are they internally the same?

Jon: They are binned at different speeds.

TIMN: So people who went out July 1st and bought the TouchPad, they won't get the same performance as the TouchPad 4G?

Jon: No, that's a 1.2GHz version.

TIMN: Well, that strikes me as extremely unusual.

Stephen: Well let's not lose sight of the fact that this is a higher end product... it does have the 4G connectivity... it does have... unique capabilities, and a higher price point.

TIMN: Okay, let's move on. You have a new smartphone coming, I know you have printers and other stuff, but you've got the Pre 3 coming. It's running a different version of webOS than the tablet. There are pretty major differences between those OSs. You're encouraging people to develop for webOS 3. Is this going to hurt the Pre 3? A device running an older version of the OS? Do you expect to get them to parity quickly? What is the phone outlook?

Jon: I wouldn't say it's an older OS. It's certainly a different OS. We didn't want to do a tablet where we just took the phone OS and scaled it up. We talked about this before. We went back to the drawing board and said 'how do we take webOS and deliver that elegant experience but optimize for the larger form factor,' and because of that we had to split the effort. You can assume that sometime in the future will converge again, but not anytime soon. So you're right, the Pre 3 has a different version of the OS. It runs phone optimized applications, it's not going to run the tablet apps. That's how it works on every other phone that's out there.

TIMN: But you're still encouraging developers to code apps for the Pre 3's OS?

Jon: Absolutely, and we'll do something in the future that will make that easier for developers, but we're not going to talk about that now.

TIMN: Will they hit parity soon though? Before the end of the year?

Jon: We're not giving any timeline on that.

TIMN: But it will happen?

Jon: No, I haven't even said it's going to happen. I chose my words very carefully. Sometime in the future we will re-converge these, but right now that's not the plan.

TIMN: Okay, let's change subjects. You said you want to be #2 in tablets. Can you still get there?

Stephen: Oh yeah Josh. Look, we're committed to working super hard at this. We've got a lot of passion for this business, we've got a great engineering team, I think we've taken a lot of steps to make sure the resourcing and the alignment around the company is all there. Our hearts and minds are into it. We're going to work extremely hard to win that position in the market. We've got a lot of work to do. We've got that. But look, you're already seeing it. Our App Catalog is looking awesome, day over day, we've got great products in the market... we have a lot of work to do. But we're going to do this in a way that is both expected from our customer base... we work with some pretty sophisticated customers around the globe... and launching into the world of connected devices to the degree that we have now is a commitment that we've made to our customers that we're in this for the long haul. I believe very passionately that by the end of this decade that the number of devices tethered to the cloud is going to be measured in billions. So the opportunity is in the earliest stages. The whole concept of personal computing is on an entirely new trajectory, and that's going to get played out over the next handful of year. The beauty of all this is that in this new world order, the big beneficiary is you. The consumer, your personal life, your professional life, everything that matters to you, will be accessible in a very seamless, context aware manner, that we think is going to change the human experience. And we're all in. We're going to be all in today, we're going to be all in at the end of the year, we're gonna be all in five years from now.

TIMN: Let's talk about licensing. You obviously have some strategy here. Based on what Leo has said, what Jon and I have talked about — there are clearly strategies forming or formed around the concept of licensing webOS to a partner or partners.

Stephen: HP deals with a lot of customers. We're not a newbie on the block. We've worked with a lot of end customers, tech partners, ODMs, other OS manufacturers. We're part of a community. And in that community a lot of discussions happen. The fact that there is so much excitement around webOS is good, and it's something we encourage. We're going to have lots and lots of conversations, but right now I want to be outrageously clear: our focus is on what we're building, and what we're going to mature the webOS platform. To bring the kind of cool and meaningful innovations that matter going forward — that differentiate us from the rest of the world. That's our biggest priority. We will address licensing and everything along that ilk, the same way we've looked at other licensing options in the past. We'll be very prudent — we're not seeking to empower competition, but we're seeking to empower or expand the presence. There's no doubt our partner base and our customers will take the TouchPad and webOS into places we haven't even envisioned yet. And we will do everything we can to inspire that.

TIMN: Okay, so the Wall Street Journal just reported that Amazon is set to introduce a tablet. Jon you're on the board over there. Kindle was one of the launch apps for the TouchPad. Is that the kind of partner you want to have with webOS? Someone with a big ecosystem and a big audience? Is that a conversation that you're having?

Amazon would certainly make a great partner... they have a lot of characteristics that would help them expand the webOS ecosystem.

Jon: So, we'd like a partner that would allow us to expand the webOS ecosystem. You and I have talked about this before. There's a variety of different sets of a characteristics to qualify as a good partner. I would say Amazon would certainly make a great partner, because they have a lot of characteristics that would help them expand the webOS ecosystem. As to whether there's been discussions or not... that's obviously not something I'm going to comment about.

TIMN: But you wouldn't say that you haven't had discussions?

Jon: I said I wasn't going to comment.

TIMN: But they have what a partner you might be looking for needs to have.

Jon: They're one variation on a theme.

Stephen: Josh to give you an idea, three years ago we were doing no revenue through Amazon in our PC business. they have been one of our fastest growing channels to the market. We haven't just said 'let's treat Amazon like Best Buy' — Amazon has tethered relationships with their customers. There's no company on the planet that has more intimacy with their end customers, or knowledge of their end customers. We respect that a lot, and we've learned from that. And our partnerships in other areas have taught us a great deal, so to Jon's point... as a metaphor, that's the kind of sophisticated partner that makes sense.

TIMN: Okay. Final question — we know Jon's answer to this. Stephen, have you used an iPhone?

Stephen: I sure have.