If you haven’t read it already, Bradley Kuhn’s take on where Canonical are aiming is deeply interesting. There is bound to be push-back against the article, because it does connect a few distant dots, but I found it particularly interesting because it’s apropos of a recent discussion on Surrey LUG’s mailing list – which has no public archive so therefore I cannot link, but the gist of the thread was a discussion on the various approaches Canonical takes to getting income.
I personally disagree that it seems like Canonical are attempting some kind of open core strategy: I think it’s arguable that they’re seeking to leave that avenue open, but for them to sell proprietary software products at any point in the next few years would destroy pretty much their entire brand image. In particular, Shuttleworth has made extremely strong statements in the past about never charging money for software – and it seems pointless to be proprietary if you’re giving the software away (well, for the most part).
However, there are a couple of things I find pretty depressing that Kuhn brings up, particularly the admission that Canonical is still not profitable and would take “some more time” to achieve that. By 2007, some three years into the Ubuntu project, it had already cost some $25 million, and of course we’re another three years on since then – given the growth of Canonical, a total spend of $50 million to this point would seem particularly conservative.
What I never understood to begin with, and still fail to understand, is why Shuttleworth has ham-strung the project from the start by promising there would never be a pay-for version a la Red Hat. My thinking in this regard is pretty simple: when you’re paying for all this development, you have to recoup those costs somehow. When you’re providing support or doing all these other activities, you leverage that development, but you incur further costs which then also need to be recouped.
Pretty much everyone else who commercially develops free software has some method of recoup in position. Red Hat, as an example, sell security updates, support, and the OS itself. Nokia invest in software to sell their phones; similarly the likes of Intel, Oracle, and all sorts of other businesses invest in the software to enable hardware sales. Google invest in the likes on Android because it gives them a huge amount of control over the mobile market. And of course, there are plenty of small players too, all of whom have some kind of strategy to ensure their development activity is not some loss-making exercise in the grander scheme of things.
If Canonical’s commercial model confuses me, though, there is one thing which is abundantly clear: for that company to fail would be incredibly damaging. It would be difficult to imagine a more worse-case scenario than seeing Canonical at ten years old, still burning millions of dollars each year and still not making a profit.
Of course, Canonical likely has that luxury; previous break-even targets have been set and then moved for whatever reason, and the vision still seems to be about growing hard, branching out and becoming some “cohesive whole” (which is avoiding the issue). So it’s not likely that they’re going to fold in the next five years. But in away, that’s almost worse: much like a Government-funded entity, there is this insulation from commercial reality which ensures that “the vision” will be followed. The must be an opportunity cost there, room for a new Ximian or a new Mandrake, and fresher more innovative visions that are currently squeezed out of the market.