If you’d asked us in 2007 or 2008 to summarize Canonical’s grand strategy, our answer would have centered around beating Red Hat and Novell on the Linux server front. But fast forward to the present and a lot has changed. That’s why it’s time for a reevaluation of Canonical’s goals and future, and its relationship with other major players in the Linux ecosystem.
For a long time, Ubuntu’s success as a traditional server platform seemed crucial to Canonical’s viability. While the desktop version of Ubuntu has fueled the distribution’s enormous popularity within the Linux community, it was hard to imagine Canonical becoming self-sufficient without competing head-on with Red Hat Enterprise Linux, SUSE and other major commercial server-oriented distributions.
That expectation made sense. After all, selling support for enterprise servers running services like Apache and MySQL has traditionally represented the only tried-and-true Linux business strategy, and it seemed natural for Canonical to follow suit.
Reevaluating Canonical’s Strategy
While Canonical has certainly pushed Ubuntu Server Edition as a direct competitor to RHEL and Novell, however, traditional servers have represented only one component of the company’s strategy for generating revenue and securing influence within the open-source ecosystem.
In addition to Ubuntu Server and the suite of related support services that Canonical sells, the company has invested heavily in other initiatives in recent years. Consider in particular the following projects:
- Ubuntu Unity, a version of desktop Ubuntu customized for netbooks. Announced last May, the project positions Ubuntu to remain a leading operating system within the netbook market. Its only major commercial competitor is SUSE Moblin.
- Ubuntu Light, which debuted at the same time as Unity, is a lightweight version of Ubuntu that promises to boot a full desktop environment within a few seconds. This is not a novel idea, and it remains to be seen whether Canonical will succeed where other organizations have failed. All the same, it represents a significant new direction for the company, as well as a potential revenue stream if OEMs can be convinced to buy Ubuntu Light.
- The cloud-init package, combined with the Ubuntu Enterprise Cloud images, underlines Canonical’s attention to the developing cloud niche. Red Hat and other competitors have also invested heavily in the cloud, but in this newer market, Canonical enjoys a more level playing field than it does on the traditional server front, where RHEL has been entrenched for many years.
- Ubuntu One: so far, Ubuntu One has remained mostly a copycat of the much more ubiquitous Dropbox, a tool for sharing files between different computers. But the upcoming release of Ubuntu integrates Ubuntu One into Nautilus at a deep level, and the service is already a prerequisite for using Ubuntu’s Music Store. It’s unclear what exactly Canonical intends to do with Ubuntu One in the future, but plans for the project appear to include much more than mimicking Dropbox.
- Launchpad, introduced by Canonical in 2004, now hosts more than 18,000 software projects and has become an important resource for the open-source community. It’s a safe bet that the site, which has no ads or subscription fees, isn’t generating any revenue for the company. But it is an invaluable tool for spreading the Canonical brand and leveraging influence over open-source development.
Taken together, the diverse projects in which Canonical has invested paint a picture in which the company is much less interested in competing directly with the likes of Novell and Red Hat, and much more focused on pursuing new niches where it doesn’t face entrenched competition.
Of course, since Canonical remains private, it’s impossible to know how well its various initiatives are paying off. But it is certain that the organization has chosen a path towards sustainability that would have been hard to predict a few years ago, and whose future direction may prove equally surprising.
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A small correction: Launchpad hosts open-source projects for free, but generates revenue by charging for hosting of proprietary projects. https://answers.launchpad.net/launchpad/+faq/208
1) Android is already in the netbook space as a dual boot option and ChromeOS is going to show up next year. If you think Google’s OSes are not going to displace Ubuntu in commodity netbook form factors..especially as ISPs push 3g data plans more and more like phones via give-away netbooks as contract sweeteners…then you aren’t keeping up with how the market is actually evolving. I can not over estimate how big an impact Google is going to have in the commodity consumer device space. Not just mobile devices like phones and the new tablet form factor..but also netbooks.
2) Splashtop is the defacto linux based instant-on operating system in the marketplace right now. In the same way that RHEL is dominant in servers… DeviceVM’s Splashtop is very dominant in the OEM instant-on market. Don’t expect DeviceVM to just roll over and let Canonical win OEM contracts without a fight. Has any OEM gone on record as to committing to ship an Ubuntu Light based product yet?
3) RHEV has scored some very significant high profile customer wins already. I don’t think cloud is as even a playing field as you’d like to think when it comes to customer dollars. It’s one thing to garner interest from users who have no intention whatsoever of paying for cloud guest operating system or infrastructure. It’s quite another to convince people to spend money on your support services in the space. What exactly does Canonical provide that is worth paying for for cloud infrastructure development? Did anyone from Canonical present at the KVM Forum this month? http://www.linux-kvm.org/page/KvmForum2010
4) Can Canonical make a web services business profitable without advertising revenue? It may be a very very difficult thing to do for anyone.
Matt Asay, Canonical Exec:
http://www.theregister.co.uk/2010/07/23/rising_cost_of_scaling/
“Unfortunately, it’s often easier to gain popularity on the web than it is to actually monetize that popularity, which means that many entrepreneurs may find success more expensive than failure.”
5) that 18000+ number is a deliberate misrepresentation of the truth about how vital Launchpad is to the open source community. How many projects are listed there solely because Ubuntu packaging requires a project to have a listing in launchpad but is not using launchpad for upstream development at all? How many projects are like NetworkManager and are listed as a project in launchpad..but launchpad is not where upstream development for the project? Canonical deliberately blurs the lines in Launchpad as a tool for upstream project hosting and downstream Ubuntu source control requirements for packaging in Launchpad. You really have to drill down into launchpad to find which projects are actually hosted there as upstream projects and which projects are there only because Ubuntu’s distribution process requires Launchpad to be used.
-jef
I think the #1 thing that Ubuntu needs to focus on is the Ubuntu Store. It has been proven with the iPhone and Android that once developers have a way to sell there software on a platform and it’s profitable the platform then grows. It’s funny, I must have had 10 people in the last year tell me they want to develop for Android or Iphone because it’s currently a cash cow.
[...] Rethinking Canonical’s Ubuntu Business Strategy If you’d asked us in 2007 or 2008 to summarize Canonical’s grand strategy, our answer would have centered around beating Red Hat and Novell on the Linux server front. But fast forward to the present and a lot has changed. Here's why. [...]
@mpt what are you trying to correct? It is clearly a conjecture. Besides, just because they are hosting closed-source does not immediately mean that they are making any profit out of it.
Ubuntu should have gone the Apple’s way – have your own in-house devel.team and play around with proprietary codes, patent them you know, submit a few lines to the open-source community and release only commercial Ubuntu. ATM you are too bloated, just pick your niche. Should have started winning geeks with your super cool OS, not targeting the general user with “so-much-like-Windows-we-are”.
Dude.
Joe consumer is quite the elusive target, more so for companies that employ a dual market strategy (free stuff intended to drive the for profit market). Apple, which has few no cost products, tries to squeeze every ounce of profit from their little 10% market making their strategy their own worst enemy. Ubuntu can capitalize on multiple factors in the consumer market in pursuit of their product strategy. Efforts on Unity and Light are obviously directed at new and emerging tablet, reader and future personal devices. In spite of my criticisms for these seemingly duplicated effort — why not just target Chrome OS with one product — Canonical can tie in 3,4,5. How you ask? It’s no secret that enterprise virtualization is booming business, as is the push for private clouds. Consumer virtual storage is only going to expand as is the market for online media. This can form part of their consumer strategy by literally being the itunes and online storage go-to-guys of Linux. Launchpad a means rather than an end in itself. Social projects, especially large ones, survive only as long as there are people interested. If there are few Linux projects for Ubuntu there will be less interest in the distribution — basic human nature.
B. Greene,
Canonical has nothing to do with ChromeOS development at this point in time. Shuttleworth said so bluntly in his talk at DebConf during the Q/A session after the talk. ChromeOS is totally in the hands of Google and will be a direct competitor in the marketplace for OEM pre-install contracts with whatever products Canonical has in the market. That being said your comment about ChromeOS as being the obvious _one_ product for the consumer space that ties it all together maybe far more prescient a comment than you know, despite Canonical’s effort to be a compelling competitive linux offering into the space.
-jef
@Jef Spaleta
re: KVM forum, no one from canonical presented but I think I saw 2 there. Dustin Kirkland did manage to get on to the group photo though, and that is probably the only contribution Canonical employees have made to KVM.
@Doug:
Snarky comments about the level of contribution Canonical has made aside… I’ve a serious question about Canonical’s ability to monetize “cloud” anything.
It’s one thing for companies to snap up gratis Ubuntu virtual images for cloud deployment as a commodity operating system. But is Canonical really making any money from those deployments? Other companies are. RightScale sales some pretty expensive value-add cloud management services on top of Ubuntu. Is Canonical seeing any of that revenue trickle back to them? Amazon is making money hand over fists from virtual Ubuntu deployments without having to sustain Ubuntu development. Is any of the EC2 revenue generated from Ubuntu EC2 deployments flowing back from Amazon to Canonical to keep Ubuntu cloud relevant? Amazon’s profit margins for EC2 are crazy high and there’s zero evidence that the profit is going back to help further develop Ubuntu.
It just doesn’t make sense. Everyone and their brother is leveraging the gratis value proposition inherent in the give-away model that Canonical is pushing for Ubuntu..but when it comes time to actually spend money…the money is going to people providing the value-add on-top of Canonical..and there’s no clear trickle back mechanism in place to sustain Ubuntu development.
What if Canonical wasn’t the controlling entity and Ubuntu was run as a non-profit? Would big players who are making a profit from Ubuntu..companies like Amazon and Google… finally be in a position to materially support Ubuntu development as benevolent corporate sponsors for an independent Ubuntu project? Its important for the health of Ubuntu for corporate entities that are making a profit using Ubuntu to be able to drive resources back into the project. Canonical…isn’t one of those entities and yet they have complete control. This is a problem.
-jef
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