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Canonical Close To $30M Critical Mass; Should Microsoft Worry?
ruphus13 writes "Mark Shuttleworth, CEO of Canonical, claims that the company is very close to the $30M mark, at which point, they will be a self-sustaining company. While people feel that this should not worry Microsoft, the real question is whether a 10,000 person effort on a failure like Vista can actually be the paradigm of a long-term strategy. From the article: 'Microsoft had 10,000 people [the article is unclear whether these were all developers, or administrative and support staff were factored in] working on Vista for a five year period ... huge profits in any given year can mean relatively little five years on. Canonical's self-sustaining revenue may not be threatening — but it leaves one wondering how sustainable Microsoft's development process really is.'"
Developer count is not what matters. Linux has plenty of great developers. Marketing is what's missing to Linux today.
Sadly, if you google "Ubuntu Marketing", you land on an empty page (https://wiki.ubuntu.com/MarketingTeam/News). Maybe someone needs to update Google's index :-)
Everyone here knows that Linux has the technical goods to take on Windows. But the cheerleading is missing. Where are the ads (with or without Jerry Seinfeld) and the glossy brochures at Best Buy?
So yes, Ubuntu being sustainable is a step in the right direction.
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That's what will kill Microsoft (and why I believe Ubuntu has become one of the top distros). Everytime I hear about Microsoft management story, it seems to be an exercise in bureacracy.
But what will hurt Microsoft is the day Quicken or Photoshop have Wine 1.xx on their system requirements, next to XP/Vista/Etc. I'm too cynical to think they'll come out with native Linux version, but eventually they'll want to tap into the 10 million+ users of Ubuntu and other Linuxes, if nothing else but to stop their competition from taking hold.
At this point, there isn't much reason to not be OS agnostic for those type of programs.
Only if one ignores all the sales of commercial and support contracts. Otherwise, it's pretty sustainable. A better question might be "How effective is it?".
Caveat Utilitor
They are close to the $30 Million dollar mark! Hooray!
Okay... is that gross sales? Net profit? Payroll? My guess is gross sales, but the summary doesn't say. Without that other piece of information, this summary makes ZERO sense (and you can put any unit you want after ZERO).
Hey, guys, my car goes from 0 to 120 in 3! That makes about as much sense as the summary.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
MSFT reported revenue of $60.4 billion dollars for 2008. That comes out to about $165.5 million per day.
There are reasons why Microsoft may or may not feel threatened by things like Linux. Maybe netbooks. But I doubt a $30M company scares them much. In fact, I'd say they're much more worried about RedHat than Canonical - not because of their size, but because RH and Microsoft do really compete in the server market. How many Linux notebooks has Dell sold so far? Even by the lowered standards of Vista there's simply no comparison there.
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And that's the problem -- people think a product or service has to make tons of $$ to be successful. Something like Ubuntu subverts our capitalist assumptions, because it actually gets cheaper the better it gets, and the more people who use it. Supply and demand work differently.
The article clearly describes it as revenue.
From that alone, you can tell he reads slashdot.
The second best quote from TFA:
Kudos on reaching the self-sustainable mark Mr. Shuttleworth! Let's hope you really do make the world a better, more free, place.
Gentlemen! You can't fight in here, this is the war room!
The fear never leaves the back of my mind that there will be a day coming when either Jobs or Ballmer or some US politician like Orin Hatch says 'If you are a Linux user, we will come find you, man, woman, child or company. You will use Windows pr you will pay fines, you will go to jail.'
That's doesn't sound far-fetched to me. Personally, I worry about my car not starting due to rogue clowns from outer space stealing my spark plugs.
Numbers are totally irrelevant, or at least their magnitude is. The point is that Canonical is self-sustaining. Last time I checked, Mr Shuttleworth did not need the cash to mend his shoes, he wanted to make something that was good.
When Canonical becomes self-sustaining, he will have accomplished that goal. This means development will be funded, marketing efforts will be ongoing, and with luck, people will make money.
This means that if you like and use Ubuntu, it will be there in the future. I do for both, so this is very good.
The more money it makes, given their structure, the more development and marketing they will be able to do. I don't know the financial structure of Canonical, but I doubt the people with a piece of it are more interested in money than changing the world. That likely means the people who own it will dump the majority of anything over the $30M back into the distro.
If you see what they did with $30M, imagine what an extra $10M can do?
This is a good thing.
-Charlie
Where are the ads (with or without Jerry Seinfeld) and the glossy brochures at Best Buy?
Marketing isn't just advertising and promotion. It is also the act of determining what kind of product a particular target market desires. The reason why linux isn't on the desktop is because it doesn't get something right that other OSes and platforms for that particular target market. If the target market is "desktop users" then I say desktop users don't care about what is running under the hood, they only care that their apps and their devices work.
In my opinion, the correct marketing strategy for a desktop linux distro would be:
And no, the correct answer is not "use gimp" or "use openoffice" or "don't buy ipods". If you want to sell linux, you need to offer them something that meets the customer's needs. All I hear when open source devs say "use openoffice" is the same as forcing openoffice down their throat. Instead, the first question any good salesman asks of any customer is "what do you need?" If they then answer "I need to use itunes for my iphone" then you better get linux to work with itunes and their iphone otherwise your product is not for that customer!
Notice that I never specified how one would get devices like iphones and MS Office and such to work. One could strike an agreement with the manufacturers to release drivers, apps, and such or maybe outline a standard that manufacturers can build and work with. But guess what, that means a new marketing strategy for a new customer. In this case you're going to have to make it easier for the companies (the new target market) to make more money either by sharing the workload or offering them something that benefits them.
Unfortunately, things like the GPL and even the nature of linux limit the choices in marketing strategies (as well as the one-sidedness many FOSS advocates have). But remember, the customer is king; if you can't give them what they want, they will never be your customer.
On a side note: I've always felt that FreeBSD had a better chance for being a good base for a desktop OS simply because of licensing. Example: the FreeBSD camp has always had madwifi available with no licensing issues while the linux camp has only recently gotten some fully supported madwifi drivers without tainting the kernel. But of course in a desktop environment, I have no problem with companies providing proprietary drivers. If their product doesn't work, it goes back to the store. In a corporate environment, I do have everything against proprietary software but that is because the needs of a company (different target market) are different from the needs of a home user. If that hint wasn't big enough, I was pointing out that while linux might not be for the home desktop user, it might be better suited for the corporate office user. Get MS Office working and you've probably met most cubicle worker needs.
What if Canonical isn't trying to make assloads of money, but are just trying to build a solid business that is profitable?
The sooner we get away from the 80's-style "If you aren't making money hand over fist now, you're worthless" thought, the better. Canonical is making a solid business providing a TON of value for it's customers via a product it's essentially giving away for free that is in many respects equivalent or better than Microsoft's products. Why shouldn't Microsoft be scared of someone who's showing the public and businesses that they don't have to pay through the ass for software? Mindshare is very important, especially in the Internet age.
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