From the get-go, the company behind the popular Linux distribution Ubuntu – Canonical – has backed Ubuntu with Mark Shuttleworth’s money. The big question has always been if Canonical is actually making any money. We have a rather clear and definitive answer to that one now.
Chris Kenyon, director of business development over at Canonical, told InternetNews that revenue growth for the company is “extremely strong”, and that it comes from both the server side as well as the desktop side. Also of interest are the rather impressive figures Kenyon put out regarding the amount of Ubuntu users he believes are out there:
In terms of numbers we’re very confident this is an 8 million plus user base of active users. That is a hard thing to count and there are lots of issues about methodology for counting but I have seen nothing that sheds doubts on that.
Kenyon refused to give any details on how many paying users Canonical has, but the 8 million users figure is rather impressive – assuming the methodology was sound, that is, which is likely to be rather debatable. Fedora, for instance, claims that its Fedora 6 release in 2007 produced 2 million unique IPs, while Red Hat says they have 2.5 million paying customers.
However, growing revenues does not mean profitability. Mark Shuttleworth has a more doomy-gloomy outlook on the whole thing, stating to InternetNews:
Canonical is not Cash positive. I think we could be cash positive if we focus on the core and scaled back. […] We continue to require investment and I keep being careful with my pennies making those investments. […] We can’t make money selling the desktop that’s why we focused on a zero licensing cost business model. The only way to build a business on Linux is to focus on services.
Well they are still young compared to other big Tech companies, so this expected. In a few more years this should change.
Well its not only about how old they are but who’s their main clients! Home users dont pay much as against companies with server editions do pay lot. Look at Redhat! I wont be surprise, if we see they focusing now on server software in coming years.
as shuttleworth said they’ll be focusing on services.
you want to use red hat you pay for support services. there’s nothing stopping you putting centOS on but you don’t get any help.
i imagine that’s exactly what ubuntu will be. free while you pay for support costs.
business will pay for support where users won’t.
CentOS isn’t without service!
CentOS is with service from the partner YOU want. You know a friend, student or partner which supports linux systems? Ask him if he can support your CentOS. Every Linux Supporter can Support technical a CentOS Network and he can Support the project to help the CentOS basic. And Canonical… Without Mark – Canonical is dead. Many words, many marketing und many buzzwords but no money.
Edited 2008-10-28 05:52 UTC
CentOS isn’t without service!
CentOS is with service from the partner YOU want. You know a friend, student or partner which supports linux systems? Ask him if he can support your CentOS. Every Linux Supporter can Support technical a CentOS Network and he can Support the project to help the CentOS basic. And Canonical… Without Mark – Canonical is dead. Many words, many marketing und many buzzwords but no money.
I think the point being made is that enterprise support with Red Hat Linux costs money. CentOS may have a thriving community of users, but a friend or a student is not going to cut it for most major corporations.
I work for a large company and we have had software requirements that Open Source could have filled, and in some cases we have went with a proprietary vendor specifically because of the support contract.
I think Canonical is smart if they focus on enterprise services over the desktop distribution, its worked out well for RedHat.
you completely missed the point.
obviously ubuntu is nowhere without shuttleworth. he pretty much pays for everything as part of his rich guy philanthropy.
as far as community support goes that’s not what a business is looking for in most cases and not what i was talking about…
Canonical isn’t dead and while the only good choice i think they’ve made is base Ubuntu on Debian if earnings are increasing that usually means that the company isn’t dead.
Which is why the OP said that they’ll start focusing on the enterprise eventually, if they wish to become profitable. Selling services to end users is nice in theory but I don’t think that it will pan out in practice.
What sevices?
In the Linux world, Red Hat owns that market. Even Novell isn’t managing to make much of a dent in it. Ubuntu need something different to make any waves, and they’re not going to do it with what they’re using.
They should also focus on netbooks, my Dell mini 9 has Ubuntu on it, and it has impressed people who saw the OS.
If you want paid support, get it from a company that isn’t just a freeloader, but actively supports Free Software — like Red Hat, Mandriva or Novell. Each on these three companies employ many FOSS developers (several hundreds in case of Red Hat and Novell, a little under 100 in case of Mandriva — numbers according to Wikipedia).
There are also Debian consultants who donate a share of their income to The Debian Project. Check http://www.debian.org/consultants/
All this Ubuntu hate is getting really old really fast.
It’s not Ubuntu hate, we are finally getting some Ubuntu realism after all the fanboy hype and the brown stuff is finally starting to hit the fan.
Canonical simply doesn’t contribute to a wide cross-section of open source software as a lot of other companies and organisations do, and without that I’m not entirely sure how any services that they sell can be taken seriously. You pay for expertise with a service contract.
If you cant see the hate in “Give your money to someone who deserves it”, “Ubuntu is a pig with lipstick” etc then you are living in denial.
They are saying give your money to a company that is actually contributing to the software you use – Ubuntu doesn’t contribute any code upstream, they just package everyone elses code, and somehow get praised for this. Most are just getting sick of that – its been 4 years, and they still haven’t done much for Linux itself.
It is not hatred, it is stating facts…
It’s being a whining little, excuse the french, bitch.
Certainly I cant be the only one who is fed up with this whining and no, it doesn’t matter if there are a lot of Ubuntu fans who are also being annoying morons. Someone else being an ass doesn’t excuse you being one.
I dont care if or how they contribute or not, I dont care if people dont like or like Mark, I dont care if RedHat/Mandriva/Slackware/Linux-of-the-day did this or that before or after Ubuntu.
You sound a bit emotional so let me try and explain how some of us feel.
We look at Linux as we’re paying programmers to write the software we tell them to write and give us the source code. This is nothing more than me paying a consultant to write a php script for me then send it so i can use it on my website.
I pay Microsoft to send me software that functions. I pay Redhat to send me software that functions that i can change. This holds more value to a customer in many cases.
Paying Redhat or Novell you’re gaining value. They write gnome/kde, they build new technologies into the kernel. These are the guys with their nose to the grindstone doing the work. Now be honest with this next question. If you were a business would you rather pay Ubuntu to support you, or Redhat/Novell who wrote a massive chunk of the kernel/ide? As a logical person you’d pick the one with the most experience and knowledge.
If you want to donate to ubuntu thats great. having a free stable OS is a great thing but when it comes to support contracts you want the best. you want the guys that wrote it and have supported it for more than a decade.
No, I’m just really tired of reading all this nonsense in every story about Ubuntu (and the anti-Windows nonsense in the Windows stories etc). You like RedHat? Awesome. You like Mandriva? Awesome. You like Debian? Awesome. Heck, I have RedHat servers too. But you know what? I don’t want to hear what you prefer or why all the damn time because I have heard it all before and I don’t care.
Whoever can give me the best support for a price I consider reasonable. The fact that RH/Novell contributed a lot of code is but one variable.
When it comes to support contracts you want the one who gives you the most value for your money, taking into account the skills of your own people, how critical each server is etc etc. The metric of best isn’t as simple as “RedHat has been around a long time and wrote a lot of code”.
If everyone had this attitude there would never be any new players.
If you want paid support, get it from a company that isn’t just a freeloader, but actively supports Free Software — like Red Hat, Mandriva or Novell.
Sorry, these companies may have contributed code, but they didn’t do one damn thing about marketing. Canonical has put Linux on the Desktop, where Red Hat said to people to go use Windows. Canonical may not have contributed millions of lines of code (yet), but it did put a face on Linux for average users. That in itself is a significant contribution.
Ubuntu hasn’t put anything on the desktop, that’s the point. Ubuntu have attracted a bunch of fanboys together who think that they represent something significant. They don’t. Ubuntu’s usage has not increased beyond a bunch of whiners, developers aren’t writing software for Ubuntu, Ubuntu’s usage isn’t increasing, OEMs are not attracted to putting Ubuntu on their machines as a result (nothing done about the chicken and egg scenario), Canonical can’t make money off the back of it and Shuttleworth has admitted defeat because he now doesn’t know what to do.
Canonical have probably got about two years, perhaps slightly more if they’re lucky, and they will be just another Linux start up that went the way of the dodo that lasted longer merely because someone had deeper pockets.
Canonical has put Linux on the Desktop
great but people won’t pay you for marketing your product (especially when the users are doing a lot of the marketing for you). They pay for service.
The whole service economy is pretty hollow to begin with but at least you are still rewarding intelligence and effort.
No, Novell and Red Hat have put Linux on the Desktop, Ubuntu just has better mind share, so people use that instead. Canonical has done nothing to contribute to that success, they even used to dictate that their developers don’t work on new code.
Canonical apparently wants to start contributing to the FOSS ecosystem a little more, but until then, no one will respect them that actually cares about FOSS.
What you wrote reminded me of a recent Apple ad: http://movies.apple.com/movies/us/apple/getamac/apple_getamac_beanc…
OK, the comparison is not 100% correct, but if I had a company, I’d go to someone with technical expertise, not someone who sacrifices it for marketing.
I agree that Canonical/Ubuntu clearly know how to market their product very efficiently. Kenyon’s and Shuttleworth’s comments (in this “news story”) are a part of their current marketing campaign for the upcoming new Ubuntu release.
The fact that Canonical estimates Ubuntu has 8 million plus user base of active users isn’t really worthy of news — they’ve told us that already many times before. The fact that Ubuntu isn’t yet profitable isn’t really news (if they suddenly become profitable, that would be news). The fact that Canonical plans to give software away without payment and charge for services isn’t news — they’ve done that since they started.
Even the fact that Ubuntu is soon going to release a six month’s worth of updates isn’t really any big news — six months is a short time and there’s not that much radically new stuff in those updates.
So why are there so many articles about Ubuntu just before their new release even though it’s a pretty boring release and not really news worthy at all? Well, that’s just because Canonical/Ubuntu are very good at marketing their product.
But even if Shuttleworth had never started Ubuntu, I’d think GNU/Linux would still have just about as many (or, as few) users as it currently has. The Canonical/Ubuntu marketing department and the numerous Ubuntu advocates would like us to think that Ubuntu is the only modern and easy-to-use distro while all the other distros are difficult and outdated, and that Ubuntu has brought many new users to GNU/Linux. But I think that’s BS. There are several good newbie-friendly distros out there. And, if we’re honest, we should admit that the single biggest attractor that has brought new users to GNU/Linux recently is not Ubuntu, it’s Windows Vista.
Ubuntu hasn’t spent money on marketing… all their marketing consisted of word of mouth… that isn’t something that they should benefit from, that isn’t something that is meaningful.
Novell and RedHat have both spent more on marketing, they just don’t market to the home user currently.
Of course not, but it does mean that you’re on the right track.
No we don’t. All we know is that they haven’t up until now. And no, Marks’ outlook isn’t “doomy-gloomy”, it’s realistic and that is a very good trait. Kenyon isn’t saying they’re making a profit either.
If you’re revenues aren’t high enough to cover costs then no.
Yes we do. It’s been several years now, Canonical have managed to find no way of making any money at all from desktop Linux and they have finally admitted defeat here that the only way money can be made is by competing in Red Hat’s market. Considering Novell are finding that very difficult I can’t see what room there will be for a company selling nothing different and merely packaging up the same software slightly differently.
Dude, they are growing, which is a good thing.
It took a while for RH to make a profit too, and that was in a far less competitive market.
Defeat? I cant recall their public mission statement being “make money on giving away a Linus desktop”.
Well, considering RH’s pricing there sure is room for competition.
Growing by how much? I don’t know because Canonical won’t give details. I do know that Mark Shuttleworth has admitted that Canonical is not cash positive, won’t be for another five or more years, but they might be if they scaled back their core (whatever that happens to be):
http://blog.internetnews.com/skerner/2008/10/canonical-is-not-cash-…
I recommend reading this first. That just isn’t sustainable by anyone. You can bold the word growing as much as you like, but if your revenues don’t cover your costs and won’t for that length of time (some would read that as never) then you’re running backwards.
Errrrrr, yer. You do realise you prove my point there, right? Canonical are going to try and compete in a market that is far more competitive, where their name is not well known versus Red Hat, where they’re packaging pretty much the same software and they’re only going to differentiate via price? That’s got profitable written all over it.
I doubt it, and trying to claim the competition is expensive and that you’ll compete on price never works. Many have tried to take some of Red Hat’s market away and they have all failed – Novell, Oracle and one or two others. It’s still growing and an awful lot of people obviously feel OK about paying Red Hat’s prices.
You need something fundamentally different to what others are doing to make any move to Ubuntu worth it, regardless of any cheaper price, and I’m afraid Ubuntu just hasn’t got it.
There’s plenty of room for competition:
-Support Price is a differentiator
-Ease of use, even on a server, can be a differentiator, particularly for win admins making the transition to linux.
-Features are a differentiator
-Canonical may not always do the right thing. I, for one, think the linux desktop would be further along if they had picked KDE as their primary desktop, but they have done quite a bit to place Linux on the radar of many new people and that should not be discounted.
Is it? It hasn’t been for everyone else, and pushing back against that inertia where you are a completely new player is a very tough sell.
What ease of use? Ubuntu isn’t a Windows Server replacement by any stretch of the imagination. Even Red Hat have been banging away at some of their management tools for several years, and frankly, they are still exceptionally poor next to Windows Server’s. I haven’t seen anything that has improved in Ubuntu.
What features?
It’s not enough.
I think the brown stuff was always going to hit the fan eventually over Ubuntu, and while there hasn’t been enough to burn the motor out yet it has certainly destabilised it a bit. They’ve suddenly started talking about revenue and profits and Mark talks about watching his pennies. Unless Canonical does something it has got about a couple of years left to it, if it’s lucky, until it goes the same way as other bold Linux desktop companies and its source of income loses interest. No one can afford to keep putting money into a business like that, no matter how deep the pockets are.
Cheers Mark. Thanks for the admission of defeat I knew was coming for a long time. This really translates as “Ubuntu isn’t sustainable as a desktop, we can’t increase its usage to any sort of critical mass and we’ve failed”. If you use zero cost licensing then you must make that up in some other way probably with a support model from businesses, and it looks as though nobody wants it because you haven’t used the zero cost of the licensing to build up enough of a user and developer base. It’s time to find out why that is, where your desktop falls short and whether it can even be fixed.
That’s what they all say when they’ve run out of ideas because no one ever says what those services are. What services, and what makes you so different to other companies that already have a service subscription model? No desktop Linux company that says they are selling services has ever gained any sort of traction, and if you’re talking about the server and corporate side of things then you’re trying to break on to Red Hat’s turf there. Even Novell is finding that very tough going, and I don’t see room for yet another company packaging up all the same software, doing nothing different and saying “Pay us for support”. I can’t see any justifiable way that will fly.
If they could make Ubuntu a creditable Windows Server competitor then that would count for a lot, but even Red Hat doesn’t want to do that, Novell wants to pretend they can concede ground to Windows Server and everything will be OK and no one seems confident that it could be done. It’s the only way though, and only then will the desktop market really open up to you on a firmer footing beyond the realm of Ubuntu fanboys.
I wish Ubuntu well. No one has to like Ubuntu or use it if they don’t want to. They’re as entitled as anyone else to take a shot and if it doesn’t work there’s no disgrace in trying. I don’t think anyone could seriously argue that Ubuntu hasn’t hugely raised the profile of Linux generally. The introduction of the free silver disk that was easy to install changed the way many, many people look at Linux. This is not something that can only be judged by money.
Even so, an idle but interesting speculation is whether Canonical would be in a better or worse financial position if instead of launching a distinct distro they had aimed to become the leading company that brings commercial expertise to Debian. None of that would have stopped them producing a tweaked up Debian desktop (a project with which Debian was struggling at the time) or a revamped, independently supported server distro in place of Debian stable.
As it is, Canonical seem to have spend huge sums of money trying not to be what they so clearly are, which is a front-end or gateway to Debian. There’s nothing wrong with that at all, but it seems an awfully expensive way of going round in a long circle
And talking of money, I simply don’t see how a privately funded outfit like Canonical can hope to compete with big, commercially funded operations like Red Hat or Novell. Either has access, potentially, to hundreds of millions by way of shareholder funds, rights issues, loans and other devices (including Microsoft “contributions”). As a private outfit it’s unlikely Canonical has access to the same sources of capital, so in some regards Canonical are trying to compete with one hand tied behind their back. Could anyone imagine Canonical rather than Red Hat buying, say, JBoss? But that’s the kind of game Canonical are now hoping to play in.
I’m convinced that Ubuntu has already become big and popular enough that the Ubuntu community would continue developing it, even if Canonical, the still tiny new company behind Ubuntu, would go away. Just like Debian is already doing as a community distro.
It is too bad that there have been some friction between the Ubuntu and Debian communities as the two communities are so close to each other. Debian is great in itself too, but in those fields where it has been weaker, Ubuntu has come to help, quite successfully too. In my opinion, Ubuntu and Debian support each other, both representing the Debian-based family of Linux distros.
As to Canonical’s business, it is slowly getting better too, more contracts etc. so there’s no reason for FUD nor hysteria in that respect either. Many other Linux companies have been doing worse but survived.
Edited 2008-10-28 20:34 UTC
do people who tote the line “canonical doesn’t contribute to the upstream, don’t support them” realize that they’re just being the antithesis of the “ubuntu fanboys”, therefore creating an annoying polarization in whatever forum thread they’re in and possibly contributing to the degradation of the community as a whole.
this whole “I’m right” – “no, I’m right, you’re wrong, and to top it all off you’re a piece of F*@&!” attitude (from my point of view anyways) is ruining one of the reasons FOSS is so great to begin with.. experimentation and choice! now I have to take sides too? a call to arms? are you kidding me?
can’t we take a more pragmatic approach this whole deal? for example, this whole canonical issue. this was brought up before, and a canonical employee blogged a response. look at the numbers:
# Worldwide Employees (2007)
* Canonical: ~130
* Red Hat: ~2200
* Novell: ~4100
* IBM: 386,558 …note that IBM’s headcount is accurate to 6 significant digits, and the others are fuzzy 🙂
# Revenue (2007):
* Canonical:(probably somewhere south of the following numbers)
* Red Hat: $523 million USD
* Novell: $933 million USD
* IBM: $98,786 million USD (yes, that’s a hundred billion dollars)
# Years in Existence
* Canonical: 4 (founded in 2004)
* Red Hat: 15 (founded in 1993)
* Novell: 29 (founded in 1979)
* IBM: 119 (founded in 1889)
http://dustinkirkland.wordpress.com/2008/09/18/whats-behind-gregkhs…
is that a good excuse? not sure. I can’t really say, but it’s compelling evidence for why canonical doesn’t seem to be doing it’s part. am I naive. after going back and reading this, sure. I don’t mean to seem like a troll.. and perhaps I’m just disgusted at the country’s polarization.. but seeing it here (and other sites) just compelled me to finally say something about it.