[tealeg]

If you go look at what companies are running in the cloud, and what companies are hosting their clouds on, Canonical and Ubuntu are the 800lb gorilla in the cloud market. If you were talking naively about where Canonical should focus to make money you'd have to favour cloud tech over the desktop. It's not a simple as that though, those two facts aren't separate - Ubuntu got to be the platform of choice for the cloud not just by being their early and investing in it, but also by being a great choice for the people developing cloud tech in over companies. Ubuntu in the cloud is a success story already and both the Ubuntu Desktop and Server are integral to that.

[Alupis]

I"m sorry but you are mistaken... if you look at server stats, majority of "the cloud" is RHEL/CentOS based. I'm not going to argue that there are not many people using Ubuntu for servers... but it's not the standard when you get to big deployments. (I think you are refering to Ubuntu being the default Linux choice on EC2 which certaintly helped it's popularity. However, EC2 is not even built from Ubuntu... it's RHEL/CentOS).

But it doesn't really matter. Canonical is drifting from what could be great. The average user does not need tech support to use a modern linux desktop (have you tried recently? they have come a long long way even from 3 years ago). At a time when XP is EOL'ed, and people are looking for anything not Windows 8 -- Linux should be answering that call, but instead Canonical is waffling again. There is absolutely a void in the market.

Let's not make this an argument. Time will tell, as does history. Canonical has fallen short on execution on almost every major project thus far. Maybe this one won't repeat history.

[sparkiegeek]

Where are you getting the stats that majority of the cloud is RHEL/CentOS?

Published stats [1] show that Ubuntu dominates cloud deployments.

[1] http://www.markshuttleworth.com/archives/1318

[Alupis]

Yes, of course Mark Shuttleworth's personal blog is not bias (he's the owner of Canonical).

Also, he's talking about deployments on Digital Ocean, ie. VM's. I'm talking about what actually makes the "cloud", ie. the "cloud". The "cloud" is built out of RHEL/Centos for the most part. Almost all the major "cloud" infrastructures have been built with RHEL/Centos. We can speculate why... but Red Hat has built a $1 billion+ revenue per year company out of "cloud" and enterprise support contracts. (because they were there first, and they focused on it... and after it became profitable, then they finally branches out into other markets.)

The problem with Canonical IMO is they try to get into too many markets which ends up resulting in split finite resources. "Jack of all trades, master of none".

[SkyMarshal]

Free Desktop OS is a loss leader, no way they'll make significant profit out of that. Better to make the best Free Linux desktop OS in the world, get lots of people using it, hopefully among them some engineers, influencers, and decision makers, then provide server/cloud products and services based on that same tech.

For one single data point, that's exactly why I use Ubuntu server for all my cloud deployments - because I use Ubuntu desktop and know the Ubuntu/Debian ecosystem really well.

Nothing wrong with that current business model, any problems are more a matter of execution and competing against - as you point out - heavily entrenched first movers. But focusing on desktop won't save them, especially since desktop is saturated and already peaked. Cloud and mobile is where the growth is now.

[tribaal]

At least HP's public cloud is based on Ubuntu as host: http://www.cloudpro.co.uk/cloud-essentials/public-cloud/1913...

I'd be surprised if they were the only ones.

DigitalOcean, Amazon, Microsoft(!) all list Ubuntu as the most popular VM for linux servers.

Can you point to stats or facts about RHEL deployments backing your point of view? I'm genuinely curious.

[tealeg]

I won't make it an argument, but I'll share what I know and see if you see things differently. You probably won't, but I'm inclined to say it anyway :-)

First, to clear some things up, I'll avoid conflating traditional enterprise servers and hosted servers with the on-demand, pay-as-you-use cloud model. The later is what I mean by "Cloud", not just hosted servers.

To my knowledge Red Hat only holds a lead in server OS installations with paid support, and that's almost all in the former model (non-cloud, for me). Incidentally that's also the stat you'll see when companies publish reports about Linux's market share in general - they often just look at who's buying Linux. It's hard to get a real picture of what people actually use when you include unpaid Linux usage (which is most Linux usage), but the best data I know of is created by scanning web hosts, and suggest that Linux server run in order Debian, Ubuntu, CentOS and RedHat:

http://w3techs.com/technologies/details/os-linux/all/all

Red Hat's sudden obsession with OpenStack in the last 12 months, the move to take over CentOS and the purchase of InkTank are reflections that Red Hat are struggling to get in that game and are prepared to spend big to do so.

Why are they struggling so hard? Because they're frightened. The steady, "we want everything to stay the same for 10 years" model they've been serving so well is seriously threatened and they need to be in the new market to continue their success. Businesses love the idea of the cloud (if not yet the reality). Read what companies say about the cloud - they'll talk about it in terms of flexibility, and opportunity, but what they really love is that it means that you can offload the genuinely generic work of IT infrastructure management. This reduces the reliance on staff and consultancy costs, which are the most expensive aspect of corporate IT (hint, want to stay employed, get with the program, fast!). It also means that whether you're using Red Hat or Ubuntu, you get to negotiate the fee for OS level support via a behemoth like HP, Amazon, Microsoft or Google, or if you're a huge company with a private cloud, you centralise all that and do it in bulk. The same goes for the physical space for hosting.

Now Amazon were an existing Red Hat customer and so their servers were already running that when they started on this public cloud adventure - which afterall was a clever way to reuse their existing investment in infrastructure and personnel outside peak load time. That's not a big win for Red Hat, but there's growth of their existing business for sure (who knows what kind of deal Amazon got from them?). Still, the utilisation of that cloud is the bigger chunk of new business there, and it's Ubuntu winning the majority of it.

Now spread out to the nascent cloud market as a whole, sure Amazon are a huge public cloud with the bulk of utilisation, but there are many others, new ones all the time. Additionally and many, many private clouds that are being created those are the opportunities for new revenue in the hosting market. Almost all of them are going with OpenStack and 55% of OpenStack deployments are Ubuntu right now (I've seen Red Hat running at less than 1/10th of that business. I'd expect Red Hat to increase that number a lot in the next couple of years (they'll convert some existing customers for sure), but don't be fooled by the recent, aggressive press releases from Red Hat - they're fighting to get a foothold in this market, not controlling it by any means.

[Alupis]

I think there's a few things here to mention. Red Hat didn't "suddenly obsess over Openstack in the last 12 months", they were one of the first Linux vendors to embrace the "cloud", and as others have mentioned, they are now deeply entrenched. Red Hat posted revenue exceeding $1 billion for fy 2013. Canonical posted only $65.7 million. Red Hat could buy Canonical and throw it away, and it wouldn't even show up as a significant blip on their books. Canonical is not competing on the same level as the heavy-weight enterprise vendors (I know they want to be).

Straying into my opinion. I want Canonical to do very well. As I mentioned, they are the closest anyone has ever been to becoming a household name with their Linux desktop (they are sooo freaking close!). But the problem I see with Canonical is the company seems to have a very bad case of ADHD. Canonical tries to do everything. Phone, tablet, desktop, server, windowing manager, init system, cloud, SaaS, enterprise support, package manager, weird-NUC-box-things, app-store, etc etc etc. This is far too much for a company that is barely staying afloat (they posted an almost $22 million loss for the same fy; about 1/3 of their total revenue lost). In most of the markets they dabble in, they show up late (sometimes very late), can't get a strong foothold, and will or have been shoved out. Shuttleworth told theguardian in August of 2013 that Canonical wanted to capture 25% of the mobile market in the US and Asia... an absurdly unrealistic goal (to this day Apple has only managed 21% market share according to idc.com) Mobile may be "hot" right now, but they are a no-name brand in that market and they are attempting to go up against companies that can throw 10's of billions of dollars at products, and even take 10's of billions of dollars of losses just to ensure they remain dominant. The ship on mobile has sailed.

I applaud their engineering efforts, and I'm sure Canonical employees do very good, and very hard work. But they need to reel it back in and focus. The company can't do everything Mark thinks might be cool when he wakes up in the morning. It needs focus. If Canonical were a startup, and Mark didn't have deep pockets, it would have failed many times over (Mark has acknowledged this several times citing his commitment to Canonical and willingness to re-invest personal capital as necessary).

Back to Desktop... there is money to be made there. Several OEM's are struggling, consumers don't like the current options (Windows 8 or OSX). There is a void to be filled, even if it's only 10% of the market, that could result in a huge revenue increase for Canonical. Yes, it's difficult to get into the hardware game, but it could be done. To make revenue, sell support licenses/contracts to OEM's... use the Microsoft model for desktop support. Why is System76 supporting Ubuntu themselves? Canonical isn't getting anything out of that... and supporting the OS costs System76 money no doubt, why not help take it off their hands? The Dell Sputnik? Dell is supporting it directly, and charging consumers more for the privilege of having a "free os" over a Windows license. Over the next 2-5 years Ubuntu could become a common household name, and be no less-normal than installing Windows on your pc. There supporting software is there, the desktop is mature. It just needs someone to guide it in.

If Canonical does not want to do Desktop, well I think that's a mistake, but fine. So they should pick one market and do it very well. Don't split-up your resources; there is only a finite amount.

[tealeg]

I still disagree with your description of Red Hat re the cloud vs traditional server sales, but let's let that slide.

So Red Hat could buy Canonical? I actually think the resulting company would have an awesome market position (but a terrible challenge to unify their tech-worlds). I think the linux world would be less rich and exciting as a result though. Still it won't happen, because it rather depends on the shareholders of Canonical don't you think? I suspect it wouldn't be as easy as all that to convince them (him!). I saw an article recently suggesting Microsoft should buy Canonical. An even worse idea IMHO - Ubuntu users wouldn't go for that. They might even see Red Hat as a bit too corporate.

Re: Canonical's financials. Which do you want, bigger revenues or profitability? Canonical could be profitable with it's current revenue levels, if it stopped investing in new things (an idea you seem to support, but be careful killing the cloud products if you're after a profit). They could also have tried to make a lot of money from limited utilisation with mandatory support, at a higher price, a la Red Hat - but how would they have competed with Red Hat if they used exactly the same model? Someone, somewhere must have a reason not to do that, don't you think?

Here's another question. Why hasn't Mark Shuttleworth just given up and walked away after 10 years of not making a profit? There's a tendency to look from the outside and assume that this must be a terrible business decision, but I find it dangerous to make assumptions about the motivations and strategies of others, especially those with a track record of success. You might be mistaking ambition for delusion. If you're wondering about Mr Shuttleworth's understanding of the current market place check out these two headlines:

1. http://www.inktank.com/ceph/mark-shuttleworth-believes-ceph-...

2. http://techcrunch.com/2014/04/30/red-hat-buys-ceph-provider-...

Guess what - that means Red Hat just gave Mark Shuttleworth a bunch more cash for his share of InkTank, at a much higher market valuation than he bought them at. Foolish business man that he is. Maybe it's dumb luck. Or maybe Mark Shuttleworth saw the potential and invested in it at a relatively early stage, and even got the thing into Ubuntu and supported it so that customers could get to grips with it painlessly. Two years later InkTank had a decent customer list and Red Hat acquired it to try and gain a foothold (and some control) in the OpenStack market.

Now, the desktop. No one has ever said Canonical isn't going to do Desktop, just that you shouldn't necessarily focus on it as the main source of potential revenue for Canonical. What about those finite resources? Canonical has more resources today than it did 5 years ago, you have to do something with those millions of revenue to stay in the red! ;-) It may still be a smallish company, but it's not the case that Canonical sacrifices one thing to do the other. You'll notices that there are new partners shipping Ubuntu machines , especially in the developing nations - there's a reason for that and it wouldn't be happening if Canonical didn't care about it's desktop. Is Canonical overstretched? Well, it could be, but that's the fight, that's the nature of every start-up, every business perhaps. There are probably people at Apple right now moaning that they don't have enough resources.