Rethinking Canonical's Ubuntu Business Strategy

Christopher Tozzi, Contributing Editor

August 24, 2010

3 Min Read
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.  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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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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About the Author(s)

Christopher Tozzi

Contributing Editor

Christopher Tozzi started covering the channel for The VAR Guy on a freelance basis in 2008, with an emphasis on open source, Linux, virtualization, SDN, containers, data storage and related topics. He also teaches history at a major university in Washington, D.C. He occasionally combines these interests by writing about the history of software. His book on this topic, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” is forthcoming with MIT Press.

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