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A profitable Linux Desktop distro?A profitable Linux Desktop distro?Posted Nov 18, 2008 23:34 UTC (Tue) by dowdle (subscriber, #659)In reply to: Mandriva reports its 3rd Quarter results by sbergman27 Parent article: Mandriva reports its 3rd Quarter results
Mr. Shuttlesworth recently announced that if Canonical decided to focus on the server side only, that he'd estimate that they would be profitable within two years. Since they aren't focusing exclusively on the server market it is important that he also stated that he plans to fund the project for another 3 - 5 years.
Speaking of Linux on the desktop, see this article:
The extremely vocal desktop Linux tinority
According to the author, you can forget about Linux on the desktop. The marketshare is so small, he came up with a new term: tinority... too tiny to be a minority.
I don't necessarily agree with his comments or conclusions but he does have a point.
I've been using Linux as my primary desktop OS since 1995 and I love it. I have converted a small handful of folks... but I'm not sure how long Linux on the desktop is going to take. I don't really care what its marketshare is as long as it continues to improve and it works for me. :)
I can't really point to anything that Mandriva has done wrong (getting back on-topic) so it is just more evidence that making money from desktop Linux is indeed quite challenging.
Mandriva does have a server product. I wonder what the sales breakdown of their desktop products vs. their server products.
Regarding taking the "easy" or "hard" road... you have to also put this stuff in historical context. Red Hat started a lot longer ago than both Mandriva and Ubuntu. When they started I don't think there were any roads... much less easy or hard ones. When Ubuntu started, Red Hat was already well established (along with Novell) as a server OS. How easy a road would servers be for Ubuntu? It's hard to say.
One difference here is that Red Hat, Novell, and Mandriva (just to name a few) are public companies who have to report their earnings. Canonical does not. It is easier to get a progress report when you have data to go on. The only numbers that Canonical has released, that I'm aware of, are about how many free users they have. They have not given any numbers on paying customers. Those are the important numbers. With regards to profit, it doesn't matter much how "popular" the non-revenue generating desktop usage of Ubuntu is. Perhaps they can gain a lion's share of the tinority via their non-paying customers... but can you really call that progress? Mandriva wouldn't call is progress.
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A profitable Linux Desktop distro? Posted Nov 18, 2008 23:48 UTC (Tue) by jspaleta (subscriber, #50639) [Link]
Even the numbers Canonical touts are completely without publicly documented merit nor communicated methodology. Shuttleworth has never documented or even informally described (to the best of my knowledge) how they obtain the estimated 6 to 8 million user number.
And in a recent teleconference with the press, which I can't find a publicly audio archive of to verify against, he has been quoted as saying "We actually have no idea" with regard to the size of the install base.
ref: http://www.theregister.co.uk/2008/1/27/shuttleworth_ubunt...
If you can dig up a link to the audio of the teleconference I'd love to hear that quote in context.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 6:49 UTC (Wed) by timka.org (guest, #53366) [Link]
The link actually is http://www.theregister.co.uk/208/10/27/shuttleworth_ubunt...
A profitable Linux Desktop distro? Posted Nov 19, 2008 16:41 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
I apologize. I personally pride myself with making sure that I provide references to supporting material as appropriate. I hate it when I screw up a reference link. Thanks for providing the fixed url.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 8:34 UTC (Wed) by nix (subscriber, #2304) [Link]
You couldn't add any more negative bias to your phrasing, could you? Your
statements are so dispassionate its hard to figure out if you're pro or anti. (Also the sun is green and the government is run by moon men.)
A profitable Linux Desktop distro? Posted Nov 19, 2008 16:45 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
What? The sun isn't green?!?
Blasted NASA... they've been lying to me.
http://sohowww.nascom.nasa.gov/gallery/images/tricomp.html
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 20:58 UTC (Wed) by nix (subscriber, #2304) [Link]
Touché, I believe. :)
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:05 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
The lesson.... even NASA colors reality in their press materials. So if you are only looking at statements made to the press and there is no transparency beyond that into details you really don't know what reality is. And depending on which press materials you see.. the Sun maybe red, green or blue...but sadly seldom purple.
Transparency matters. It matters to government. It matters to publicly funded science. It matters to publicly traded companies. It matters to volunteer organizations. It matters to pretty much any situation where a small group of people are asking a much larger group of people to trust in their ability to manage shared resources and interests. Forget legal requirements... ethically and morally transparency matters. Who are your stakeholders and are you reporting to them on a timely, forthright and accurate basis concerning your ability to manage shared resources?
For publicly traded companies those stakeholders are the shareholders. Obviously. And in fact society has recognized that and created all sorts of protections and requirements to make sure companies meet a minimum standard of performance with regard to reporting.
For community based projects those stakeholders are contributors. What sort of reporting requirements should we demand in this case?
When business entities engage in the management of community volunteers, their ability to manage those contributor resources and interests can only be quantified when their is an appropriate level of transparency between the business entities resource planning as it relates to that community of contributors.
What is our standard for that? What do we expect of business entities who engage in this sort of community sheparding? There or so many companies now who are growing their own contributor communities. Who's really engaging in best practises with regard to resource planning in consultation with those communities?
So on Mandriva's part they are compelled by law as a publicly traded company to provide a minimum level of financial transparency to stockholders. I wonder if they go beyond what is strictly legally required as a publicly traded company as they relate to their volunteer contributor community. Are stockholders the only group that a company which is relying in part on volunteer contribution the only stakeholders that you have an ethical obligation to provide status reports to? Does Mandriva as a company do any publicly communicated budget or resource planning for aspects of their business which directly interact with contributor community building and asking for feedback about how those resources are allocated from the contributor-base? I don't know. I've failed to find references to that sort of thing.
On Canonical's part...they aren't even legally compelled to do any financial status reporting to stockholders. So even that level of transparency is missing. But obviously Canonical spends and budgets money
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:27 UTC (Wed) by dlang (✭ supporter ✭, #313) [Link]
why should you know?
in a public company shareholders need to know so that they can tell if their money is being spent the way they want it to, the public needs to know so that they can decide if they should spend their money buying a share of the company or not.
for a private company you have no reason other then curiosity and the desire to second-guess and criticize the owner.
you may claim that you want to know so that you can tell if the business is going to run out of money and shut down or not, but in a private company with a large, rich sponsor you can't know that unless you know the mindset and personal finances of that sponsor (and in this case, since you have publicly called that sponsor a lier why would you believe any statement of his mindset anyway)
so there's no reason for a private company to provide the information that you are asking for. (I don't believe that RedHat did it before going public either, so it's not just those evil ubuntu people refusing to give you the information.
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:48 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
Time is money isn't it?
A volunteer contributor's time is a valuable resource isn't it? Something worth cultivating, something worth making use of? How valuable is it for any project? If we tried to account for all that time and turned it into an in-kind expenditure report.. what would that number look like? If a business had to pay someone for all the work their community volunteers do..how big a number would that be? How is all that community effort not an investment worthy of responsible status reporting?
And why do you insist on using the word "Ubuntu" where the word "Canonical" makes more sense?
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 23:20 UTC (Wed) by dlang (✭ supporter ✭, #313) [Link]
there is not a single origination in the world that accounts for volunteer hours and turn them into expense reports. it's just not worth the effort.
as for typing "Ubuntu" instead of "Canonical", it's shorter and close enough to the same meaning
A profitable Linux Desktop distro? Posted Nov 19, 2008 23:47 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
I think you are wrong. I think there are a number of examples of incorporated organizations which make it a habit of documenting the financial worth of in-kind contributions of all sorts...including time.
Typically those sorts of organizations which make significant use of volunteers are non-profit...and there are compelling tax based incentives to want to make sure that sort of in-kind contribution of services is documented. And generally speaking there are reporting requirements for non-profits. Now of course, the rules of of in-kind contribution reporting are squishy.. but efforts are made to account for it when its deemed appropriate.
What we are seeing now in open source project management... is a pretty new model in how private business rely on a large volunteer contributor base. There are no established baseline rules for this sort of thing as to what is expected. Up till now for-profit business entities have typically been expected to deal with labor, investors and consumers....not a large contributor pool who are both a significant portion of your labor and also your consumers. We simply don't know what the best practise rules are. How do we know if the managing entity is taking advantage of their contributor base? We've no baseline standard of performance when it comes to expectations on business and contributor relations. Time to unionize.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 2:49 UTC (Wed) by Frej (subscriber, #4165) [Link] I've been using Linux as my primary desktop OS since 1995 and I love it. I have converted a small handful of folks... but I'm not sure how long Linux on the desktop is going to take. I don't really care what its marketshare is as long as it continues to improve and it works for me. :)I havent used linux on the desktop for that long (quite a long period of flux before ~2000). But really - i would never dream of persuading anyone to switch, I just don't believe that it's going to work somewhat effortless. I think windows is a better choice for real users. For those who won't scream when a pixel is changed (ie those who bother to changes habbits), I recommend os x.
A profitable Linux Desktop distro? Posted Nov 19, 2008 15:49 UTC (Wed) by fb (subscriber, #53265) [Link]
I use Linux since 95 as the grand-parent poster.
FWIW, here is one anecdote for you: I bought a new computer for my
They have been using Ubuntu for ? 1.5 year now, and have had no real
There have been small issues (just like they had when running XP
My points are:
2. Desktops present issues. With Linux or WinXP. In that case, folks like
(BTW, the local shop where the computer was bought does provide linux
A profitable Linux Desktop distro? Posted Nov 19, 2008 4:27 UTC (Wed) by rahulsundaram (subscriber, #21946) [Link]
From a purely (short-term) revenue generating perspective, you might not call non-paying consumers progress and in fact from that perspective, they might be considered a loss but there are certain concrete benefits towards having them in the longer term. It wouldn't make sense for say Red Hat to fund Fedora otherwise. OpenSUSE is available commercially but I don't think it is self sustaining enough on its own for justifying the continued investment from Novell. Both these projects are benefiting from the investment made from revenue generated by their commercial off shoot products and the fact that the organizations themselves are profitable.
There is a value in building a brand by giving your product freely but just because you have a popular brand doesn't mean that you will be commercially profitable. Red Hat learned that lesson with Red Hat Linux years back and Canonical which is essentially following the Red Hat Linux model is learning that as well but even for distributions (or any commercial open source project for that matter) which are currently commercially profitable, there is always a free to pay conversion challenge.
When the commercial services are optional, it makes the challenge higher but the market has grown significantly since the Red Hat Linux days and it is certainly possible that the growth of Red Hat, Novell and other vendors makes it easier to do it now than before assuming you can find way to compete with the existing vendors and offer better value to some of your users enough to convince them to buy your commercial services.
Adam from Mandriva pointed out in his blog at http://www.happyassassin.net/2008/10/28/why-i-dont-like-c... that Canonical is somewhat in a unique position in the market being privately funded but Canonical also appears to be of the understanding that desktop is a gateway to making a business on the server side rather than being profitable by itself. The lack of significant investment in upstream projects even on the desktop side might be a result of this understanding.
So, it remains a open question if any of the current vendors believe they they can become profitable or even self sustaining by being just desktop focussed or ultimately if they can. It will be the answer to that question, that determines the commercial market share of Linux on the desktop.
It should be pointed out that Mandriva has made considerable contributions (http://www.kroah.com/log/linux/lpc_2008_keynote.html) towards various upstream projects despite their current financial status.
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