Just over a month ago, Opera surprised most everyone in the web world when they announced they would transition from Presto, their own layout engine, to Webkit.
The announcement was jolting for a number of reasons, none more so than the fact the move meant Opera would be leaving behind the decade of work that had gone into Presto, and probably closer to two decades if you consider (and you should) that Presto had evolved from the earliest products out of the Oslo based browser company.
And while Opera was never a major player in terms of global browser market share, they have had outsized importance in the browser world due to being an outspoken proponent of open W3C standards, an early focus on mobile browsing, and simply being one of the few independent browser companies to be a successful, ongoing concern.
So with all this, why did they make the move?
Well, it surely wasn’t because they were struggling, as can be seen by the following chart:
The company’s revenue has grown steadily, and EBITDA, while a bit choppy, has been going north for the most part.
The reason given by Opera (in short), is that the Webkit engine is a very good, one that is widely supported, and a transition would allow the company (which is small compared to tech giants like Apple, Google and Microsoft) to free up engineering resources to focus on developing differentiating features for their own browser. It also would allow them to put to bed nagging complaints from the developer, system and services communities who expressed concern about working with Opera because, well, it wasn’t a Webkit shop.
So with all this in mind, the announcement makes sense to me, but I actually think there may be another reason the company made the transition, which is based on the following:
One of the things that Opera didn’t really talk about a month ago when they announced the transition was a small reorganization of the TV group. For the first time in Opera’s history, Opera’s TV group would become its own independent business unit, complete with its own sales and marketing, business development, engineering and professional services teams. All of these teams would report into one person, Aneesh Rajaram, who previously headed up business development for the TV effort.
Now, while this may seem like a fairly small move, I think it is actually a big deal, especially since Opera is probably the leading browser company in the TV space at this point.
Ok, you’re saying, are they really leading in TV?
Well, here’s how I see it: Many of the TV OEMs today are using Webkit browsers, while a few - like Sony - are using Opera’s browser.
And of course, many of these implementations do not give end-users Internet browsing capability, but instead use the browser as a UI rendering engine or, occasionally, as the engine behind what HTML5 apps are available in their TV app store.
However, while Opera is doing probably better than any independent company in putting browser into TVs (Google’s wins are really only those who are using Google TV at this point, which is a fairly small fraction), as TV OEMs and their content and apps partners call for less fragmentation, Webkit will win the layout engine war.
So despite Opera’s early browser and HTML5 app framework wins, this long term trend left Opera facing a decision: engage in a long battle in a market that is just beginning and try and get TV OEMs to adopt their layout engine over Webkit - or pull a jujitsu move and absorb Webkit as its own engine, putting to rest concerns from app developers and content owners (the key app decision makers - think Netflix, Hulu, etc).
And you can see what route they chose (the right one, in my opinion).
Now, in a sense, apps are probably the wrong word here. As we know, HTML5 is actually helping us turn apps into actually true web-based services - or at least something closer - and that is where the real battle is as we move out of smart TV 1.0 towards a market with more mature apps (or really, services) marketplaces.
Opera wants to be the company that helps enable that - up against giants like Google and Apple - they can be the Switzerland (or maybe Norway) of the HTML5 app technology and professional services companies, which is a huge opportunity.
By moving to Webkit, doing that just became much easier.
See NextMarket Smart TV market outlook report here.