The Ubuntu Business model and Perl

After my little research into the Eclipse foundation (Comparing the Eclipse Foundation with The Perl Foundation and EPO) I was told to take a look at the success of Ubuntu. While I know there is a huge difference as Ubuntu is an operating system while Perl is just a language but I got interested and here are the results.

Ubuntu does not have a foundation. It has a strong and very enthusiastic community and it is backed by Canonical, the company of Mark Shuttleworth.

That means the Perl community probably cannot learn much from the way Ubuntu and Canonical are connected but we can still look at the larger picture of how Ubuntu succeeded so far?

First I'll look at the business model of Canonical and later on the elements that helped Ubuntu become one of the leading GNU/Linux distributions in only a few years.

The Ubuntu Business model

So if we look closer I think we can safely say that Ubuntu is a product Canonical is sponsoring in order to make money somehow. I would not say by selling added value service as I am not exactly sure what is their business model. I noticed a few areas where Canonical might be making money:

  • Selling wearables and accessories.
  • Providing support contracts at nice sums.
  • Providing Training and Certification.
  • Distribution mechanism for software.

Selling T-shirts can bring in nice revenue to a small company but for Canonical it is more part of the marketing mix than the revenue mix.

Providing support can be an interesting business model, IBM makes a lot of money on it. I guess Canonical does too. This will just increase as Ubuntu invades the corporate infrastructure.

Training and Certification can be a lucrative business if executed well and I trust them to do it well. If they can convince companies that they need Ubuntu Certified Engineers to run Ubuntu smoothly then will see a huge number of people attending their classes and taking their certificate exams.

Still the biggest business opportunity I think is the one that is not even listed in the Canonical Store but only under Services. That is, they offer to be a distribution channel for ISVs.

In the Microsoft world people are used to download software and click-click-click install it. In the GNU/Linux world almost all the important software is packaged and distributed by the Linux distributor. It is especially true for Debian/Ubuntu but I think it is increasingly so with Fedora and Mandriva as well. That means the most common installation mode in these versions of Linux is via a mechanism similar to the "Add/Remove Software" on Windows.

So if you have a software which you'd like to distribute to Linux users, one of the best ways is to make sure each one of the Linux distributors will package your software. Otherwise you'll need to build .deb and .rpm files for each distribution or a stand-alone executable which is frowned upon by most of the Linux system administrators.

If your software is not open source you don't have much chance that any of the Linux distributors will add that package to their repository making it almost impossible to penetrate the Linux Desktop market.

If Canonical manages to get a large chunk of the market share in the Linux desktop market it effectively can open or close the distribution channel of ISVs making them pay well for the right to use Ubuntu as their distribution platform.

So what will happen to Ubuntu in 5 years?

I don't know.

If you look at the background of Mark Shuttleworth, he built Thawte and more or less at the peak of the dot.com bubble he sold it to VeriSign the only competitor in the digital certificates market. So he is a clever guy who won't be afraid to sell Canonical to the market leader with a near monopoly in the desktop business or to the competitor with the most money making a few billions of dollars. The sky isn't the limit

The Perl aspect

Perl is not an operating system and it is not the open source arm of a company. It cannot be sold but it can provide nice revenue streams to individuals or companies offering service with Perl. There might be other revenue sources as well but lets look at the 4 revenue streams that Canonical has:

  • Selling wearables - on Perl conferences some stuff is auctioned which generates some revenue to organize the next conference. This could be further expanded but the income is very limited.
  • Providing support: ActiveState does it as do a number of other small companies mostly in the local markets or in specialized fields (e.g. Shadowcat providing web development services using Catalyst or Summersault providing web development services using Titanium.) This could be exploited further providing similar services in other fields as well, not only web application development.
  • Offering Perl training provides nice income to several people in the Perl community including myself. This does not seem to turn any of us rich but provides us with a reasonable income stream to support ourselves. Certification is a sour point in the Perl community. Some people say that they don't want to have any certification systems for Perl others see it as the Holy Grail to make Perl more accepted by corporations. In any case this could be a revenue stream but I don't think it will happen any time soon.
  • Unlike an Operating system Perl does not control any distribution channel but it could be used in a related way. Actually it could be used similar to how the JVM provides a platform of application development. I am sure one day we will have a binary package of Perl with tons of CPAN modules already installed. Something like Strawberry Perl for Windows but with many more modules that can be installed on all major OS-es. That thing could be used as a development and distribution platform for all kinds of software.

    I am not sure this can directly generate revenue but it will help enlarge the Perl user base and it could provide more opportunities for development, support and training services for more people in the Perl community.

I'll write about the success of Ubuntu in a separate post. for the meantime you can read the Ubuntu Story between 2004 and 2006. They don't keep their history up to date either.

And the follow-up: The Success of Ubuntu

Published on 2009-06-30 by Gabor Szabo

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