Ubuntu: More Apps, Lower Support Costs?
As Ubuntu 10.04 (Lucid Lynx) nears its April 2010 launch, Canonical is taking steps to make Ubuntu Linux more attractive to business customers. The efforts include new support pricing plus closer relationships with application developers. Here’s some analysis from The VAR Guy.
On the applications front, Canonical is raising its voice in the ISV (independent software vendor) community. The effort strives to make Ubuntu a more easily managed enterprise system. Two cases in point:
- Groundwork Open Source today unveiled a new network monitoring release that supports Ubuntu Server Edition. Groundwork already offers support for Red Hat and Novell environments.
- Likewise Software and Canonical are working closely to make sure Ubuntu can be managed from Microsoft’s Active Directory, notes ComputerWorld’s Cyber Cynic.
More Applications Coming?
Meanwhile, the Ubuntu community has launched a survey to determine which additional applications users would like to see easily installed on Ubuntu.
Perhaps the biggest move of all involves Canonical’s pricing for enterprise support. Canonical now charges US$1,200 per Ubuntu server for 24×7 annual support. The previous price had been $2,000. “As our volumes increase we’ve been able to drop the [support] price,” says Steve George, VP of sales and product management for corporate services at Canonical.
Channel to Success?
So, where do channel partners — folks like VARs and MSPs — fit into this story? Admittedly Canonical’s channel partner strategy remains a work in progress. But tools like Groundwork Open Source and Canonical’s own Landscape should allow VARs and MSPs to remotely manage and troubleshoot Ubuntu systems. And Likewise opens the door to integration projects involving Ubuntu and Windows systems.
But our story doesn’t end here. The VAR Guy has a hunch more Ubuntu ISVs will surface around the time Ubuntu 10.04 (Lucid Lynx) arrives.
I take it the qouted Canonical exec was still unwilling to on record with the number of paying support customers or Landscape users to back up the statement that their sales volumes are increasing. What sort of service renewal rate are they seeing year to year on existing annual service contracts?
I continue to find the omission concerning any customer base trending quite hypocritical considering Canonical execs have repeatedly released Ubuntu deployment estimates they even admit they can not substantiate with hard numbers or a counting methodology.
Jef: The VAR Guy hasn’t been able to track down the figures you’re requesting. You raise valid questions. Our resident blogger is striving to interview new CEO Jane Silber about Canonical’s business strategy and performance… …
-TVG
If I recall rightly, Canonical was started with just USD10 million of seed funding from Mark Shuttleworth. That’s a drop in the bucket compared to, say, how much Microsoft spends on developing its operating system. Yet Ubuntu can manage two major releases a year, while Microsoft struggles to bring out one every three years. And Ubuntu includes a whole lot more functionality in the box, as well.
Lawrence:
You are mistaken.
The Ubuntu Foundation was created with a 10 million trust not Canonical. The purpose of the Ubuntu Foundation was a hedge against the collapse of Canonical in order to keep core Ubuntu operations up and running. In fact, we’ve heard very little about the fate of the Ubuntu Foundation since it was announced in 2005. Maybe someone should ask someone about whether that Foundation even still exists anymore.
No one from Canonical has ever gone on record with any specific financial information concerning how much money Shuttleworth is losing every year in funding Canonical operations as far as I know. But make no mistake, Canonical is losing money each and every year. Every time a Canonical exec is directly asked if Canonical is profitable yet… the answer is never yes. How much money Shuttleworth is losing is anyone’s guess. Whether or not that loss is shrinking on a quarterly basis is also unknown. Since Canonical makes zero effort to communicate any concrete trendable metrics about the commercial health of any of its for-pay service offerings there’s no rationale analysis or performance-casting which can be done. It’s either butterflies and rainbows or doom and gloom depending on the personal bias of the person doing the analysis. There’s precious little concrete verifiable information.. and clearly Canonical likes it that way.
We’ve no idea how the training services are doing. We’ve no idea how the OEM services are doing. We’ve no idea how the engineering consulting is doing. We’ve no idea how Landscape management services are doing. We’ve no idea how the end-user support services are doing. No one ever comes back a year after trumpeting Canonical’s press releases and and actually checks up to see how the product offering is actually going. The technical laypress seems pretty content in cheering Canonical along without really scrutinizing the company’s business plan in any detail whatsoever. Like for example how exactly does Canonical really plan to make money from EC2 and Eucalyptus when other services providers like RightScale are already providing a layer of for-pay management services. I’ve really yet to see Canonical’s business plan communicated with regard to virtualization.
It’s really no wonder that Canonical seems to reinvent its channel partnerships each LTS when they can’t seem to find a way to make any revenue stream actually stick. A partner channel that doesn’t actually drive sales of your own product and services isn’t a channel you easily nurture as an overhead expense.
Now maybe this LTS will finally be different… but the fact that Canonical still hasn’t been able to put together a solid set of customer case studies on their own website which talk to the value of paying for Landscape or support services…I’m not very hopeful. If Canonical continues to go out of their way to lift up Ubuntu deployments that do not involve paying for optional Canonical services they continue to undermine the value of those services. Does anyone anywhere actually pay to use landscape management and like it? Those customers need to speak up and talk about..pronto.
And don’t confuse the technical benefits of Ubuntu and the release management with Canonical’s performance as a business. In the final analysis we might find that the costs of managing such an aggressive release schedule is actually keeping Canonical from having a profitable quarter. But since Canonical doesn’t ever talk about its own business performance in any detail whatsoever we’ve no idea whether Canonical’s lack of profitability is more to do with the management of expenses or with underperforming revenue or something else entirely.
-jef
Turns out that USD10 million given to the Ubuntu Foundation has never been spent.
According to Wikipedia, Canonical has “200+” employees (versus Microsoft with close to 100,000). Say it’s costing Shuttleworth about USD10 million a year to keep the company afloat, assuming it’s getting no revenues at all (which seems unlikely). That means he’s spent about 10% of his personal fortune over the life of the company so far.
By contrast, it would take all the money he’s got, and then some, to pay for a single release of Microsoft Windows. And again, compare the functionality you get out of the box with Ubuntu (or any other major Linux distro), versus what you get with Windows. Microsoft’s OS isn’t in the same league.
@Jef,
Since I’m the quoted “Canonical Exec” so I’ll try and respond. I personally think our track record of public engagement is very good. Of course there’s a balance. Canonical is a private company and certain information is commercially sensitive in nature. Equally, we recognise that Ubuntu users are interested in the company which is why we’ve been clear that the organisation and revenues are growing but that we are not profitable. That seems pretty clear communication to me!
The bottom line is that Ubuntu is a FOSS project with an open distribution model. It’s true that Canonical injects a lot of energy but anyone can participate. If Canonical failed Ubuntu would carry on for a while certainly (funded by the foundation) and perhaps permanently (if the community, users and developers rallied round). It’s this freedom that makes FOSS a better choice for users and businesses than proprietary software.
Steve:
I disagree about that communication balance. Multiple Canonical execs have gone on record to the press with estimates of the Ubuntu userbase size every year since 2004… never once explaining to the Ubuntu community in a transparent manner how that estimate is obtained. And during all that time…Canonical has never once gone on record concerning the size of its customer base for any of its products or services. There’s no balance there.
How about from now on… all canonical execs stick to talking about the growth of their business and designate an Ubuntu community member (other than Mark Shuttleworth) who is not an employee of Canonical talking about the growth of the Ubuntu project who can do so transparently including a discussion about how they are estimating growth without running up against some sort of corporate Canonical NDA.