Ubuntu cloud chief beats CTO to exit door (The Register)

So I rather imagine most of their income is via development projects with OEMs, the likes of litl, the consultancy for large Ubuntu deployments, all that malarkey. I don't think they would have ever gone down the Unity road in the first place unless there were OEM customers somehow stumping up for that work to happen.

However, are they making much money? I really like the idea that they've done a 10k desktop rollout in Germany: practically every other story like that from other vendors has gone bad in subsequent years, but this is a much more controlled environment, so should be more successful. At this stage, though, they should have many more case studies like that, so you have to think there aren't many of these big deployments about that they're supporting directly.

I also know that they've been handing out Landscape freebies to various people pour encourager les autres, so how much of a haircut they're taking on these various deals who knows - I'm pretty sure they are extremely keenly priced.

I think the problem is basically this: we assume they're not break-even yet, otherwise that would have been trumpeted already. We can also figure out that they're burning millions of dollars each year (has to be ballpark $10M when you consider staffing/office costs/etc.), and have done for the last few years (would have been much less in the early days).

So the question isn't, are they making millions of dollars in revenue, they must be. The question is, how many millions short are they, and what revenues are going to scale without scaling costs to meet that shortfall?

I'm personally not hugely worried that they don't release much information, no-one would realistically expect them to - no private business would ever do that. And as a non-Ubuntu user, the future of that ecosystem doesn't keep me awake at night either. Canonical will be here for years yet. Whether or not they continue to grow, though, or start years of minor cuts here and there and slide back - that wouldn't surprise me. The model was always one of artificial growth to capture market. It remains to be seen if the market is actually there.

It sounds like you believe that "all" potential customers require these things. Others disagree.

No, because I don't believe that MS is a strong market leader enjoying massive network effects in every computing niche outside of web servers. In my previous post I even listed a number of niches were Linux is quite successful.

And, I have a fairly good idea of what AD is and what it's used for. Heck, we use it at work, and I even have some kind of certificate of attending an AD course at some point, although in reality I do almost exclusively Linux stuff. And I think AD is a decently good product, and more importantly, it's very well integrated into the whole "enterprise" Windows thing.

Which is one reason why I don't think it's feasible to create a "better AD than AD" in the foreseeable future. It's a *very* hard nut to crack. Heck, Samba's been at it for a couple of decades, and they're still playing catchup because MS has an army of programmers capable of adding new features (that customers, apparently, are willing to pay for) much faster than the relatively few Samba hackers can. One reason perhaps being that a mission statement of enabling corporate IT to do their jobs using Linux instead of Windows isn't exactly the kind of thing that warms the hearts of the untold legions of free software developers sitting in their basements looking for a worthy project to contribute to?

So what should Canonical do then? Well, as I said, I don't know. Though I'm quite sure that a head-on assault on the core market (a market which, as I mentioned previously, enjoys massive network effects and as a result is more or less a monopoly) of one of the biggest corporations in existence is unlikely to succeed.

And, also, I think the premise that Canonical cannot succeed without beating Microsoft in the corporate IT market is patently false. Heck, look at Apple; they seem to be doing fine (by most measures) while not caring at all about corporate IT. Or google, for that matter.