Contemporaneously with the [Palm OS] license agreement, we entered into a co-development agreement with PalmSource to develop a next-generation Palm OS for use in future Palm products. PalmSource did not timely meet certain of the milestones under the co-development agreement, relieving us of our obligation to make minimum royalty payments under the license agreement after calendar year 2006. We are presently in negotiations with PalmSource to expand our development and distribution rights to the current version of the Palm OS. If we are unable to successfully conclude these negotiations, it may adversely affect our ability to develop and distribute new products based on a next-generation version of the Palm OS.
Well, tonight we learn that Palm finally got what they wanted from ACCESS. As stated in the ACCESS press release (we don't have Palm's statement at this time) the two companies have entered into an agreement that gives Palm a perpetual license for the Palm OS Garnet source code. Most importantly:
Under terms of the agreement, ACCESS has granted Palm specific rights to modify the code base of Palm OS Garnet for use in its devices such as the Palm Treo smartphone family and the company’s other handheld computers. The agreement also grants Palm the right to use Palm OS Garnet in whole, or in part, in any product from Palm and together with any other system technologies. To ensure forward-compatibility of Palm OS Garnet applications, ACCESS and Palm have agreed to continue to measure compatibility against the compatibility test harness in use between the two companies.
Does this mean that Palm wants to keep cranking out products on the old Palm OS for as long as they can get away with it?
No. What I believe it means is Palm now has the right to use Palm OS Garnet "in whole, or in part... and together with any other system technologies" to develop Palm's own next-generation Palm Operating System. The terms of this agreement validate my interpretation of the July SEC filing that Palm has been planning to regain control of its OS destiny by negotiating for the right to include Garnet as a legacy execution environment within an advanced, probably Linux-based OS successor of Palm's own devising.
You can see why ACCESS has been slow to accept these terms. I'm sure they've been showing Palm the progress on the ACCESS Linux Platform and trying to woo them with ALP's Garnet compatibility and multitasking MAX application framework, hoping that Palm would be among the first licensees. We don't know whether Palm had concerns about ALP itself, or if they simply didn't think their business vision was sufficiently aligned with ACCESS's to risk dependence on ACCESS for their critical system software. But for whatever reason, Palm wasn't buying ALP. And apparently ACCESS became sufficiently concerned that they would lose Palm entirely as a licensee that they decided the best thing was to give up on the ALP hard sell and take Palm's money ($44M) in exchange for Palm's freedom to do what they pleased with the current version of Palm OS.
This is a good thing for all concerned, in my opinion, and I wonder if the time it took for the companies to strike a deal wasn't simply spent with attorneys wrangling over the terms of an agreement they all knew they would reach. If both ALP and Palm's next version of Palm OS support Palm OS Garnet applications, Garnet essentially becomes a cross-platform execution environment like Java or Brew. And not necessarily just across two platforms. If Palm creates a new product that isn't really a PDA or smartphone and has a very different kind of OS, the agreement enables Palm to include a Garnet emulator or compatibility layer for legacy Palm OS apps to run on that OS as well. All this gives credibility to the longevity of Garnet and all the thousands of applications written against the Garnet APIs. This in turn helps give ALP some traction right out of the gate as one—even if not the only—successor to a Palm OS that has a strong future and a viable ecosystem. Developers can have confidence that their applications will have a market not just with customers of ALP devices, but with their usual Palm customers as well, which should inject a little life back into the flagging Palm OS economy.
Palm gains from this deal not just because of the freedom to use Garnet in a future Palm OS that they control, but also because they may need to sell some more products on a spruced up version of Garnet before their next-gen Palm OS is ready. I know I wrote here that someone familiar with the matter told me Palm's first Linux products will be released next year. And Ed Colligan's recent remarks may give some credence to that report. But that product is likely to be for early adopters who are willing to suffer through some of the birthing pains of a new operating system (and maybe a bold new device category) to be in on the ground floor of Palm's Next Big Thing. If it does run Linux it may initially face some of the challenges we've seen on devices like the Nokia 770 Internet Tablet: subpar performance and battery life, for example. Linux systems are powerful and sophisticated, bringing many benefits to vendors and end users of mobile devices, but they may require another year or so of Moore's Law and software optimization before one can deliver the kind of snappy, run-for-days user experience that Palm users have come to expect. During that time the venerable Palm OS Garnet—with renewed ministrations from Palm's engineering staff—should keep the Palm OS torch burning.
It will be very interesting to hear how Palm reports on the new agreement. This could be the time when Palm opens up about some of its plans and verifies publicly some of the things I've speculated about on these pages.
Update: See also the FAQ about the new agreement that ACCESS posts on their site. It reads in part: "The agreement also grants Palm the right to integrate Palm OS Garnet on top of other operating systems." I believe that this right alone is what made the $44M deal worthwhile to Palm and what prompted the long negotiation with ACCESS.
Update: Palm has issued their own press release now, which I analyze here.
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