Beyond Ubuntu: Canonical Pursues New Revenue Streams

Joe Panettieri, Former Editorial Director

July 3, 2009

3 Min Read
Beyond Ubuntu: Canonical Pursues New Revenue Streams

At first glance, Canonical is an operating system company — built around Ubuntu Linux. But take a closer look at Canonical’s moves during the first half of 2009, and you’ll find the company has increasingly bet its revenue stream on cloud, online and consulting/support services. Here’s some perspective.

Am I suggesting that Canonical is abandoning potential support revenue from Ubuntu? Certainly not. Rather, I’m pointing to a range of services built around Ubuntu.

Three quick examples include:

1. Ubuntu One: The online storage and file sharing system is in beta test now. The first 2GB are free; 10GB of storage costs (US)$10 per month.

  • The Opportunity: 12 percent of WorksWithU readers say they’re willing to pay for Ubuntu One. That figure, based on a reader poll we conducted in June, may sound low. But I think it’s a reasonably good figure.

  • The Challenge: Ubuntu One only works with Ubuntu 9.o4. No Windows. No Mac OS X. I move between Mac OS X and Ubuntu regularly… and I wish Ubuntu One allowed me to share files between those two systems.

2. Ubuntu Enterprise Cloud Services: Professional services designed to help and support customers building private clouds, according to Canonical.

  • The Opportunity: No doubt, CIOs and business executives are trying to figure out how to build and maintain secure private clouds that drive down IT costs but increase information sharing.

  • The Challenges: Do CIOs really think of Ubuntu when they think of clouds? Canonical is going to need  some big-name partners for the Ubuntu Enterprise Cloud Services. (Collect call to IBM…). Meanwhile, Red Hat has announced a cloud certification/partner program, and — a powerful brand in cloud computing — is the first named partner.

3. Landscape: A support and management tool that allows IT managers to remotely administer Ubuntu systems.

  • The Opportunity: Canonical could take Landscape in multiple directions. Canonical itself could become a managed service provider that remotely administers customers’ Ubuntu networks, much in the way that Dell launched ProManage Managed Services to remotely manage customer systems. Canonical could also promote Landscape as a platform for VARs and resellers to use to remotely manage customer networks.

  • The Challenges: Landscape remains a work in progress. Until Ubuntu more deeply penetrates corporate networks, Landscape won’t be able to fully flex it’s own muscles.

Smart Strategy

Generally speaking I like Canonical’s decision to pursue revenue opportunities outside of the base Ubuntu operating system support services.

Think of it this way: Cisco Systems has a core operating system (IOS), but Cisco made its profits on a range of solutions built around that operating system.

Or think of it this way: Netscape originally made its money around a core product (the Navigator browser). But when the browser market became a zero-sum revenue game, Netscape didn’t have strong enough alternative revenue streams.

No doubt, Microsoft wants to crush Canonical before Ubuntu is a financially viable, self-sustaining operating system. Canonical is wise to put a few additional irons in the fire.

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About the Author(s)

Joe Panettieri

Former Editorial Director, Nine Lives Media, a division of Penton Media

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