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In defense of UbuntuIn defense of UbuntuPosted Aug 19, 2008 20:28 UTC (Tue) by jspaleta (subscriber, #50639)Parent article: In defense of Ubuntu
A couple of comments "Depending on who is speaking, Ubuntu and Canonical are guilty of profiting from the free software community without giving back to it." Is Canonical actually.. profiting yet? That would fantastic news for everybody. Last Shuttleworth interview I read, he admitted that Canonical was not profitable yet. That should be a source of concern for Ubuntu community members. Even with the high profile Dell deal to provide support for the Ubuntu desktops...Canonical hasn't reach profitability. You have to wonder as to the terms of that arrangement and whether Canonical is actually over-extended its support commitments compared to its income. How long does the initial venture capital injection from Shuttleworth last? As Canonical continues to search for profitibility will Canonical need to refocus the engineering hours at its disposal and if so..will that impact development of the Ubuntu distribution? Canonical its clearly vectoring towards the small business segment with its Ubuntu LTS and its landscape system management and provisioning product. Is that focus on small business customers going to change Canonical's engineering focus away from the things that make Ubuntu compelling for home users? How much of the core Ubuntu distribution under the direct control of Canonical manhours? And what happens if those available manhours need to be reassigned based Canonical's business interests? "That said, much of the criticism of Ubuntu is coming from the developer community, which does have a more detailed view of the full ecosystem" Actually I think developers are mostly upset with Shuttleworth acting as CEO of Canonical and not the Ubuntu community as a whole. Mark has a history of publicly challenging upstream projects to change how they do things to better meet his company's needs....in places like his blog..instead of individual project communication channels. That sort of things is great for getting press to notice you, and also a great way to burn good will with upstream projects. If the Canonical engineers were in the upstream mailinglists for the kernel and X.org for example, putting the work in as peers of a community process to get things aligned better for Canonical's long term interests...I very much doubt people would have much to complain about. But when Shuttleworth as CEO of Canonical, steps up on his soapbox and proclaims to the press that he has a better vision of how things should be done..well then..he better be prepared to direct company resources into the projects and processes he is challenging. When he does stuff like that, he puts the upstream projects on the defensive, and tarnishes the reputation of the Canonical engineers and Ubuntu community contributors who are active and are participating with upstream projects. He's brought this criticism on himself, and the brands that he manages. -jef
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In defense of Ubuntu Posted Aug 19, 2008 21:16 UTC (Tue) by rahvin (subscriber, #16953) [Link] As far as capital for Ubuntu I would imagine that given Shuttleworth's current financial position and the apparent soft place in his heart he holds Ubuntu that it's likely that even if Canonical ran out of money and couldn't obtain capital from the open market that Shuttleworth himself would reinvest. I'm not speaking for him or saying it's guaranteed but based on his public statements and the positions he takes on the company it's my belief he would keep pumping money into the company until it does become profitable. I wouldn't worry much about their survival. From his statements he sees the project for what it is, a long term investment in something that is very likely to pay off substantially down the road as the Linux desktop becomes a reality. There is no question in my mind that Linux as a whole will take over on the desktop. Not even MS can sustain the development effort that goes into Linux just to keep Windows on the same level. Given how far behind Linux was even 5 years ago and how viable they are today you can see the progression is an order of magnitude faster than commercial development.
In defense of Ubuntu Posted Aug 19, 2008 22:23 UTC (Tue) by mmarsh (subscriber, #17029) [Link] It actually makes a lot of sense, when targetting small business as a customer, to make a distro that employees *can* run at home, even if not in the exact same version (Professional vs. Home, for example). If your employees use the same OS at home as at the office, they're more comfortable with their computers, at least in theory. What's more, they're self-training on the OS at home, so you need to invest less in training them in the basics on the job.
In defense of Ubuntu Posted Aug 20, 2008 13:37 UTC (Wed) by AlexHudson (guest, #41828) [Link] From what I read from previous interviews (not that long ago, but I don't seem to be able to find them again) Shuttleworth has stated that Canonical was aiming for break-even in 2008. With 130 employees at an average salary of $40k/pa (last number pulled out of my backside, but including taxes etc. is probably conservative), they need to make upwards of $5 million annually to cover staff costs. Including value added taxes and the other costs of running a business, probably $7 million is nearer a base figure for turnover. That's nothing like Novell's or RedHat's annual turnover on "Linux", but both are growing and RH in particular has been posting some pretty amazing figures. As far as I can tell, Canonical's only product (outside of special deals on putting Ubuntu on OEM hardware?) is selling support basically. A target of $7 million is a lot of support contracts...
In defense of Ubuntu Posted Aug 20, 2008 19:29 UTC (Wed) by vmole (guest, #111) [Link] FWIW, the usual multiplier (that I've heard) is (very roughly) employee_cost = 2.5*employee_salary. Payroll taxes, benefits, physical plant, computers :-), etc. Of course, a LOT of Canonical employees work from home, so less, I suppose. Huh. I just googled "caononical ubuntu burn-rate", and come with this, which claims that Shuttleworth told Wired in 2007 that Canonical had cost $25 million in three years, which means your estimate of $7 million is better than mine.
In defense of Ubuntu Posted Aug 20, 2008 21:34 UTC (Wed) by AlexHudson (guest, #41828) [Link] Employing someone certainly isn't cheap, and a 2.5 salary multiplier isn't far off at all. You're right, working from home will save money on engineers equipment, but that pad in Millbank Tower (Central London) won't come cheap. I'm not sure about what the $25M you state includes, though. The endowment to the Ubuntu Foundation was supposedly $10M, so that would leave a cost of $15M over three years for Canonical. That's $5M per year, which is close to my estimate, but also they've grown extremely artificially over that time, so their fixed costs will be much more now than when they were the unnamed enterprise a few Debian hackers were working on. That feels about right. Personally, I suspect my estimate is conservative: I think their costs are higher than $7M/pa, which even for Shuttleworth means that they need to start making money relatively soon. By the end of 2008 he could have spent something closer to $40 million in total on Ubuntu. Is Ubuntu worth that much? If it doesn't get close to an even keel soon (= next three years), Canonical could end up going the way of OSAF: burning through capital for a few years, not receiving the necessary tough love, and not having any reason to be successful. I doubt Shuttleworth would let it get to that point, though.
In defense of Ubuntu Posted Aug 21, 2008 16:47 UTC (Thu) by gouyou (subscriber, #30290) [Link] Looking at the current market cap of RedHat (4B+ USD) and Suse/Novel (2B+ USD), a 40M+ investment is pretty good. I guess from the current popularity of Ubuntu, any investor would be more than willing to put quiet a bit more money in Canonical. And you can hardly compare OSAF and Canonical: OSAF took over 5 years to deliver their first stable product.
In defense of Ubuntu Posted Aug 22, 2008 7:49 UTC (Fri) by AlexHudson (guest, #41828) [Link] I wouldn't be so sure about investment. RedHat's IPO ten years ago raised them $90M (thereabouts), which was towards the end of the .com boom. Today's market is much more tech IPO hostile. RedHat and Novell both have a vast range of products that Canonical doesn't have as well. My comparison with OSAF wasn't really about the finished product (although clearly, with Debian, they had a bit of a leg up in that department ;). What I mean is that there have been a number of "open source" companies who have been well funded but failed to become profitable: OSAF was funded very similarly to Canonical, and have had to contract hugely when the founder decided it wasn't worth playing the game any more. You also have examples like Eazel. My point is nothing more that when you grow a company artificially, like Canonical, you need to invest heavily up-front to create product and services which then sell like hot cakes. If you fail to get to the "hot cakes" stage (and we're talking sales, remember), it becomes extremely difficult to turn that into a profitable business and things go downhill quite quickly.
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