PDA

View Full Version : How do Ubuntu and the larger Linux distros make their money?



hoppipolla
September 29th, 2009, 05:55 PM
Now, I know the smaller ones make it mostly through donations and sometimes merchandise sales, and that does seem to always comprise a degree of the revenue of any open source project, but I was wondering what the other ways are in which they profit financially from their Open Source endeavours! :)

I have some idea but I'm not sure, and it would be great to understand this a bit more.

From what I can see, a lack of financial return may well play a large part in why Linux-based and Open Source OSs just don't seem to have the penetration and impact that commercial ones do, and don't seem as focused or competitive... am I right there?

And if this is true, what can be done to change this?

I know this has been discussed before, but hey membership is changing and evolving all the time, and it's a good one to throw up to encourage constructive debate!

Thanks for readin'!

Hoppi :)

RiceMonster
September 29th, 2009, 05:58 PM
By selling support. Novell and Red Hat make a good amount of money this way.

Xbehave
September 29th, 2009, 06:03 PM
Redhat (fedora) sell RHEL and support for it and make a significant amount of money of that.
Novell (OpenSuse) sell solutions (e.g they come into your company and fix everything for you) and support for SUSE (they may also charge for SUSE)
IBM (no big distro), make most of thier money from linux by selling it as part of solutions
Canonical (ubuntu) is earning money by selling technical support, but they are not making any profit yet. Their plan is selling support for enterprise desktop use (RHEL is aimed more at servers and suse more at integrated systems)


Debian, Gentoo, Arch do not make money.

timestandstill
September 29th, 2009, 07:10 PM
Ubuntu is just so good. It probably has a way of making money and we haven't even realized it!

cguy
September 29th, 2009, 07:24 PM
They sell support, actual distros, solutions, t-shirts, bags & co., and certifications! (the latter are very pricey)
They also have people and COMPANIES donating.

Ubuntu also has a rich dude behind it going by the name of Shuttleworth. :D

praveesh
September 29th, 2009, 07:26 PM
Redhat (fedora) sell RHEL and support for it and make a significant amount of money of that.
Novell (OpenSuse) sell solutions (e.g they come into your company and fix everything for you) and support for SUSE (they may also charge for SUSE)
IBM (no big distro), make most of thier money from linux by selling it as part of solutions
Canonical (ubuntu) do not make money yet, however their plan is to sell support for enterprise desktop use (RHEL is aimed more at servers and suse more at integrated systems)

Debian, Gentoo, Arch do not make money.

Canonical is earning money by selling technical support, but they are not making any profit , to the date . The most of the money , they earn are being spent (for shipping free cd s etc)

juancarlospaco
September 29th, 2009, 07:32 PM
Ubuntu: UbuntuOne, LandScape, Support, Courses, secret plan to sell placebos on Ebay.

:)

timestandstill
September 29th, 2009, 07:33 PM
Canonical is earning money by selling technical support, but they are not making any profit , to the date . The most of the money , they earn are being spent (for shipping free cd s etc)

What will happen to Ubuntu if Canonical run out of money? Since they aren't making a profit, doesn't that mean they'll run out of money sooner or later.. Who will continue Ubuntu?

j.bell730
September 29th, 2009, 07:34 PM
What will happen to Ubuntu if Canonical run out of money? Since they aren't making a profit, doesn't that mean they'll run out of money sooner or later.. Who will continue Ubuntu?

The community, silly.

cguy
September 29th, 2009, 07:34 PM
10 million dollars are hard to spend :D

NormanFLinux
September 29th, 2009, 07:38 PM
Canonical provides paid support services to governments and Fortune 500 corporations and other distros sell pre-configured hardware loaded with their OS to offset development costs. Yes, Linux may be libre but like everything else in life, it isn't free.

openfly
September 29th, 2009, 07:44 PM
HP, Sun, RedHat, SuSE / Novell

These guys all provide professional services support, as well as custom software solutions to enterprise / mid-range IT shops. Beyond the run of the mill licensed support contracts every tom **** and harry business relies on for that 2am... jesus hell my server is possessed by the ghost of malloc past.

Professional services support means they can drop experts into environments to do major deployment work, or customize their products to fit into the clients environment. And these guys can cost a freaking boat load depending on who they are and what it is they are doing. Those custom solutions form the foundations of major enterprise project work that many people never even hear about, or could even know about but enjoy the benefits of every day.

Also there are "strategic partnerships". Between some companies. So while HP for instance might be providing support for RedHat to their customers directly, they will also be contributing their engineering solutions back to redhat who will incorporate it into their release cycle. This allows redhat to get skilled engineers in other major organizations to contribute to their code base and kick ****.

So, for Novell, RedHat, and various other big name software companies a lot of their money comes from being able to provide experts, and engineering know how direct to the customers that are willing to pay for it. Heck if you think AT&T makes all their money off of their data and telecom business you are out of your mind. They have some of the worlds best electrical engineers and they will leverage them at will against any number of custom engineering projects. That's why they have an R&D division.

cariboo
September 29th, 2009, 07:46 PM
Have a look at this article (http://ostatic.com/blog/canonical-and-microsoft-is-sustaining-a-business-better-than-turning-a-profit-right-now), it is from January of this year. It tells us that Canonical is going for sustainability instead of profit at the moment

earthpigg
September 29th, 2009, 07:56 PM
something to always keep in mind when thinking about Free/Open Source Software and making money...

it isn't a matter of how much money you take in.

its a matter of how much money you take in minus your costs.

recall that Ubuntu was not and is not developed from the ground up by Canonical employees.

(the below % is pulled out of thin air for the purposes of debate)

Debian, Linux Kernel, etc, contributors do about 97% of the work... that means that Canonical has 97% of their software development done at zero cost to Canonical. heck, Apple wrote the printing system Ubuntu uses (http://en.wikipedia.org/wiki/Common_Unix_Printing_System)!

meaning that for every 1000 software developers Microsoft needs employ to develop it's software to the equivalent level, Canonical needs to employ 30. the other 970 are still needed and present, of course, but Canonical isn't paying them even though Canonical still gets to use their stuff.

that aspect is what lets Free Software outfits able to make a profit without actually having to rake in tons of cash.

howefield
September 29th, 2009, 08:01 PM
10 million dollars are hard to spend :D

Not so hard to do, I'd wager.

cguy
September 29th, 2009, 08:10 PM
something to always keep in mind when thinking about Free/Open Source Software and making money...

it isn't a matter of how much money you take in.

its a matter of how much money you take in minus your costs.

recall that Ubuntu was not and is not developed from the ground up by Canonical employees.

(the below % is pulled out of thin air for the purposes of debate)

Debian, Linux Kernel, etc, contributors do about 97% of the work... that means that Canonical has 97% of their software development done at zero cost to Canonical. heck, Apple wrote the printing system Ubuntu uses (http://en.wikipedia.org/wiki/Common_Unix_Printing_System)!

meaning that for every 1000 software developers Microsoft needs employ to develop it's software to the equivalent level, Canonical needs to employ 30. the other 970 are still needed and present, of course, but Canonical isn't paying them even though Canonical still gets to use their stuff.

that aspect is what lets Free Software outfits able to make a profit without actually having to rake in tons of cash.

But getting the OS done is only part of the job.
Setting up and maintaining repository servers around the world is where heavy money go.

hoppipolla
September 29th, 2009, 08:20 PM
What will happen to Ubuntu if Canonical run out of money? Since they aren't making a profit, doesn't that mean they'll run out of money sooner or later.. Who will continue Ubuntu?

Aww heh, they may just stay afloat though mightn't they? I mean just because they aren't MAKING money doesn't mean they aren't sustaining themselves.. I'm not sure though ._.


Have a look at this article (http://ostatic.com/blog/canonical-and-microsoft-is-sustaining-a-business-better-than-turning-a-profit-right-now), it is from January of this year. It tells us that Canonical is going for sustainability instead of profit at the moment

Ah see there we go :)

Exodist
September 29th, 2009, 08:21 PM
By selling support. Novell and Red Hat make a good amount of money this way.

Ditto..

Exodist
September 29th, 2009, 08:25 PM
Have a look at this article (http://ostatic.com/blog/canonical-and-microsoft-is-sustaining-a-business-better-than-turning-a-profit-right-now), it is from January of this year. It tells us that Canonical is going for sustainability instead of profit at the moment

I am hoping the Software Center will help on the financial end to help make Marks investment worth while. I cant wait to see the game selection of commercial games that are already prepackaged for Ubuntu.

hoppipolla
September 29th, 2009, 08:27 PM
I am hoping the Software Center will help on the financial end to help make Marks investment worth while. I cant wait to see the game selection of commercial games that are already prepackaged for Ubuntu.

Oo that's clever I like that O.O

Like Xbox Live lol :)

Exodist
September 29th, 2009, 08:35 PM
Oo that's clever I like that O.O

Like Xbox Live lol :)

I have a game or two, Like Unreal Tournament 2004 for linux. But its actually a little tricky for new users to install. So if we could get something like that packaged already for Ubuntu, I would gladly consider paying 5 or 10 more bucks for over retail for the ease of installation. (shot me I am lazy). But little stuff like that would help return the investment.

hoppipolla
September 29th, 2009, 08:53 PM
I have a game or two, Like Unreal Tournament 2004 for linux. But its actually a little tricky for new users to install. So if we could get something like that packaged already for Ubuntu, I would gladly consider paying 5 or 10 more bucks for over retail for the ease of installation. (shot me I am lazy). But little stuff like that would help return the investment.

Totally! It would also show a real return for day-to-day Linux on the desktop! A very good idea :)

The other thoughts people have put forward are very good and very true!

I'm still not sure if there is as much money as there is in commercial OSs (can someone disprove me on this or is it true?), but it's good to see there are enough avenues to make it worthwhile :)

Do they have enough incentive to bring it to us on the standard desktop though? I take it they get money for this if they provide it for installation on business machines?

earthpigg
September 29th, 2009, 10:06 PM
But getting the OS done is only part of the job.
Setting up and maintaining repository servers around the world is where heavy money go.

a lot of the mirrors, judging from their URL, are hosted at universities. i wonder if Canonical pays them?

same for all distributions. i can't imagine Arch, for example, has tons of cash to throw around...

how exactly does that work?


I am hoping the Software Center will help on the financial end to help make Marks investment worth while. I cant wait to see the game selection of commercial games that are already prepackaged for Ubuntu.

indeed. i have purchased two commercial video games in the past (World of Goo (http://en.wikipedia.org/wiki/World_of_goo) and DEFCON (http://en.wikipedia.org/wiki/Defcon_%28video_game%29)), and would probably purchase more if it where streamlined.

hoppipolla
September 29th, 2009, 11:24 PM
I am starting to think that desktop Linux/Open Source OSs may work better and develop faster if there were more money involved.

Am I right in saying that most companies that make Linux distributions make most of their money from businesses and servers, and very little from the home market? So... what is in it for them to put much work into their desktop releases for people like us?

Maybe if there were more financial incentive at any link along the chain of Open Source home desktop development, we would see an improved product. I don't necessarily mean charging for the product.

To what extent am I right about this? o.O

Mateo
September 30th, 2009, 02:28 AM
By selling support. Novell and Red Hat make a good amount of money this way.

But significantly less than companies who sell both support and software, which is almost every company that sells software.

Running an open source software company is partially a charatible venture. The only exception are the partially=open source companies, like google, who use open source to improve their own proprietary products, thus making themselves more money elsewhere.

Of course, in order to get that to work, you have to be VERY influential in the overall market.

JDShu
September 30th, 2009, 02:37 AM
Am I right in saying that most companies that make Linux distributions make most of their money from businesses and servers, and very little from the home market? So... what is in it for them to put much work into their desktop releases for people like us?


I think you're right. Its usual businesses that need support and are willing to pay for it. This is the advantage of proprietary over open source - Microsoft can sell you Windows, and use some of that money to improve the desktop experience. We have to rely on the awesome open source contributors around the world who do this stuff for fun and out of generosity.

LookTJ
September 30th, 2009, 03:04 AM
something to always keep in mind when thinking about Apple wrote the printing system Ubuntu uses (http://en.wikipedia.org/wiki/Common_Unix_Printing_System)!Just to point out, Apple didn't write CUPS, they bought the rights.

cariboo
September 30th, 2009, 03:14 AM
But significantly less than companies who sell both support and software, which is almost every company that sells software.

Running an open source software company is partially a charatible venture. The only exception are the partially=open source companies, like google, who use open source to improve their own proprietary products, thus making themselves more money elsewhere.

Of course, in order to get that to work, you have to be VERY influential in the overall market.

Yes Redhat looks like a charitable venture, link (https://www.redhat.com/apps/download/)

Sean Moran
September 30th, 2009, 03:33 AM
In a word, honestly.

hoppipolla
September 30th, 2009, 03:04 PM
I think you're right. Its usual businesses that need support and are willing to pay for it. This is the advantage of proprietary over open source - Microsoft can sell you Windows, and use some of that money to improve the desktop experience. We have to rely on the awesome open source contributors around the world who do this stuff for fun and out of generosity.

I am starting to think maybe a slight revision of this might be needed if Linux is going to have a large impact on the desktop, particularly for home users. I mean, I believe that KDE will help as KDE is now a fantastic looking desktop environment that can more than compete with commercial equivalents, and may encourage more distributions into existence. However, maybe the bottom line is that if we want Open Source desktops to improve to a competitive standard any time soon, we may need to find more ways to get money to the developers.

Although it really helps that people like Mark Shuttleworth are donating so much to the KDE project :)

Boom!!!
September 30th, 2009, 03:47 PM
10 million dollars are hard to spend :D


You aint met my wife.