Well, that's not very true. I think you mean to say, "Desktop is not sexy".
Most homes have either a desktop, or a laptop, or both, sometimes multiples of each.
Every business has at least 1 computer (desktop or laptop, sometimes multiples of both).
So there very much so is a lot of money still in desktop.
Right now if you want to purchase a factory Linux computer, your choices are severely limited. It's either System76, or the Dell Sputnik (which for some reason costs more than it's Windows counterpart).
XP just expired. My company has a warehouse of 40 workstations running XP. We're looking into getting new hardware. Guess what... it'll be Windows because there are not many other options to price-shop around and/or get differing levels of support.
Everyone has a desktop. That doesn't mean everyone is buying desktops. It's a shrinking market right now, and there's no escaping that. Why should Canonical invest in a shrinking market instead of an expanding one? When I first started working at Canonical it was when they were jumping on the whole netbook bandwagon. The future was a world where everyone was using tiny toy laptops, and Ubuntu was going to rule that world. There ended up being numerous problems, not least of which turned out to be that netbooks were just a passing fad.
They want to be in every consumer market, but they're too late to them all. Desktops are shrinking. They're having trouble finding a phone manufacturer that will do hardware for them. Probably the same with tablets. I can't even begin to imagine what all is involved in television. That's the market they want into that still hasn't been totally cracked by Microsoft, Apple, Google, or Amazon. And that fact alone should probably tell you that the odds of Canonical cracking it are not fantastic.
I'd love for Ubuntu to become huge on desktops and make them tons of money. And maybe it will happen and I'm just not seeing the big picture. But where you see every business running at least 1 computer and consider that an opportunity, I unfortunately see it as a missed opportunity. That's a computer they already bought, and if they're going to get rid of it and switch to something else what makes you think they would choose Ubuntu (something they've never heard of) rather than Windows 8.1 or an iPad?
Sure, but all of those desktops and laptops, in businesses and homes, usually come with operating systems, be they Windows or OS X.
On top of that, personal computer sales are stagnating and tablet and mobile markets are growing; if Ubuntu really wanted to get on the money train, that's probably a better place to go. There's no money in Linux Desktop any more than there's money in Windows Desktop, which is to say not much at all.
The only PC-related industry that might be worth focussing on is laptops or tablets-as-laptops (e.g. Surface), but there's a huge amount of engineering work to be done on hardware support, battery life, etc., and most of the Windows 8 tablet hardware is garbage. Without creating their own Surface-type product (and having an actual market for it), it would be difficult for them to control enough to ensure proper support.
Compare that to servers, where companies will shell out $3-10k per server for new servers (or hundreds of dollars a month). If you can add in some kind of premium support, management system, cloud something, etc. and charge a minimal amount, the money would be significant. Heck, give Amazon customers the option to opt in to a $1/mo support upgrade and that would be a decent income stream from people running their own servers who aren't highly technical.
That is the entire point I"m making. You cannot go to the store and buy a Linux-based desktop nor laptop. Companies (and most home users) don't want anything to do with Windows 8, but are being forced off XP. This is the ideal opportunity to capitalize on such a market and make Linux Desktop's common-place.
Out of all the Linux vendor's and distro's, Canonical is the closest at achieving common-place... yet, they have stopped short at such a critical time.
Of course tablets are popular, so are phones. Both markets are more fierce than desktops due to massively low price-points and some companies (looking at you google) willing to sell their tablets at a loss.
Companies spend $3-10K on server hardware, not the OS. When you buy big-iron servers, it's actually very common-place to get a Linux OS already installed, or no OS so you can install your preferred distro. Server Software (the OS) support contracts absolutely make money... but so does desktop software support contracts.
Your assertion that desktop industry is not worth focusing on is not true. Tablets and phones are getting more popular, but desktops and laptops are not going anywhere anytime soon.
My dream (currently impossible) is that Canonical would make money by selling hardware: a Canonical branded surface-3-alike, which can wirelessly connect to a giant desktop monitor, and still work as a second screen.
I would honestly pay $25 or $50 more to have a dual booting macbook pro with no headaches. I waste about a day a year fighting OSX closed hardware, and I still don't have microphone support on this thing.
Edit: But your point totally stands. They need more sources of revenue besides desktop linux.
Most homes have either a desktop, or a laptop, or both, sometimes multiples of each.
Every business has at least 1 computer (desktop or laptop, sometimes multiples of both).
So there very much so is a lot of money still in desktop.
Right now if you want to purchase a factory Linux computer, your choices are severely limited. It's either System76, or the Dell Sputnik (which for some reason costs more than it's Windows counterpart).
XP just expired. My company has a warehouse of 40 workstations running XP. We're looking into getting new hardware. Guess what... it'll be Windows because there are not many other options to price-shop around and/or get differing levels of support.
There is indeed money in Linux Desktop.