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Doughy
April 14th, 2007, 02:46 AM
I came across this review of Ubuntu: http://www.softwareinreview.com/cms/content/view/59/

In this article, the author makes the following observation about Canonical Ltd.'s business model:


On a final note, I think there is a serious flaw in Canonical Ltd.'s business model. Any company that provides a free product and intends to make money primarily from support services for that product is not financially motivated to offer something that works well. Ubuntu Linux will never be perfect because if it were, Canonical, Ltd. would have no support services to sell. Why spend money on release testing when you can make money telling customers how to fix bugs instead? Perhaps that is what truly separates commercial distros from the free-of-charge ones; with commercial operating systems you pay for the company's best effort at creating a perfect software distribution, not a company's best attempt to create a product that requires paid support services. The better Ubuntu gets with its desktop configuration tools and user documentation, the less money Canonical, Ltd. will make. Doesn't quite make sense, does it?

Anyone have a good response?

Sef
April 14th, 2007, 02:58 AM
Any company that provides a free product and intends to make money primarily from support services for that product is not financially motivated to offer something that works well.

A cynical remark. People's motives are not good, the author is saying.


Ubuntu Linux will never be perfect because if it were, Canonical, Ltd. would have no support services to sell.

What company or group of people make perfect software?


Why spend money on release testing when you can make money telling customers how to fix bugs instead?

Another cynical remark.



Perhaps that is what truly separates commercial distros from the free-of-charge ones; with commercial operating systems you pay for the company's best effort at creating a perfect software distribution, not a company's best attempt to create a product that requires paid support services.

So a company does need support for Microsoft because it's software is so "perfect"? So Microsoft does not make any money off of support?

samjh
April 14th, 2007, 02:59 AM
The author is correct in essentials, but over-simplifies the problem.

All software will have problems. It cannot be avoided. So yes, if Ubuntu improves reliability and compatibility, Canonical will either need to raise its prices or lose money. But the demand for support will always be there, so Canonical is unlikely to go out of business unless it does something completely crap.

I actually think Canonical should sell ultra-stable business versions and do custom enterprise software development, while the free version of Ubuntu should be for free-range R&D. Similar to what Red Hat and Novell do with their Fedora and OpenSuse distros.

PilotJLR
April 14th, 2007, 04:04 AM
It's common for reporters to misunderstand GPL and most open source business models. I don't know this reporter's background, but I think it's likely they heard the word "free" and ran with it.

No enterprise would EVER buy a product as important as an operating system without good support. The product must be of high quality, of course... but even a superb product still needs professional support.
For example, the servers may be working very well, but the sysadmins get log messages they don't understand... who will they call?

It is possible to make money on open source by selling support, as Red Hat has demonstrated.

The Canonical model is similar to the older Red Hat model, in that binaries are distributed very freely. Although I don't think they can make much money in the home user / small office space, they are positioned to do well in the enterprise, if they can steal some market share from Red Hat.

aysiu
April 14th, 2007, 04:16 AM
While this sounds right in theory, in practice it's wrong.

At my workplace, we use a database program that is closed source, and the company that produces the program majorly cripples the software, to the point of being almost unusable, and our in-house tech department isn't allowed to make their own patches or improve the software at all.

In order to get basic functionality, we have to purchase "extra" supporting products and add-ins. That's really how some commercial software works. Look at Windows--cripple the OS and then you can make deals with anti-virus companies like Symantec to come in and offer the solution... for a price. Or, worse yet, offer your own anti-virus solutions... for a price.

The only real motivator for creating a quality product is competition. If Ubuntu makes a crappy OS, no one will use it. They won't pay more for support. They just won't use Ubuntu. They'll use RHEL or SLED instead.

Proprietary or open source--your business model will suck if there's no competition. Pay more for functionality or security / pay more for support. It doesn't matter. In any case, Microsoft and Apple all charge for support. Don't they also then have something to gain by putting out crappy products?

The truth is that companies like to pay for support, whether the product is working well or not. You propose to your boss to buy or license a piece of software that has no paid support, and you'll get funny looks and a lot of skepticism.

jcconnor
April 14th, 2007, 06:40 AM
For me, an article like this is scanned into my wetware processor and then quickly erased. Generally, the folks that "assert" the type of things this guy is doing either (a) don't understand the design and implementation philosophy of Ubuntu or (b) don't care cause it makes better press. Either way, I usually go, "Hmpph, another idiot with an opinion," and move on.

guinra
April 14th, 2007, 06:51 AM
You could argue in a completely cynical way that yes, Canonical may make money from fixing problems with Ubuntu, it is still in there best interest to make those problems as easily fixable as possible for themselves.

Also, support doesn't include just "this is broke please fix it", it also supports helping customers with custom configurations, patches to packages that aren't in the standard distro, and much more.

Canonical has all the reason to put out as best a product as they can, as if they don't, people won't want to use it, and they won't have a market to sell their support services to in the first place :)

foresth
April 14th, 2007, 11:46 AM
If I thought conventionally, I would definetely say, that the author has a point. But I believe there can be a lot more than only money in a business, like happiness, that you do something significant and good for others, that people admire you for what you are doing.

I just hope, that there is plenty of people, who make donations, because the Ubuntu developers absolutely deserve it.

3rdalbum
April 14th, 2007, 12:41 PM
It wouldn't make sense for Canonical to ship a badly buggy product.

Canonical doesn't make money by the number of support calls - it charges a yearly fee for support. Therefore, it's within the best interests to make a good product, so they don't need to keep hiring developers to fix problems for the enterprise customers.

Erik Trybom
April 14th, 2007, 01:09 PM
The article is, of course, not even remotely accurate.

You don't pay for support because your software has bugs. Bugs are fixed anyway. Every Linux distribution out there, no matter if they're commercial or community-driven, fix bugs. All the time. Even if you didn't pay anything for the OS itself, you still get bug fixes for free.

The support is there to fix things when they go wrong, or help setting up a system, or installing the new printers. More than that, they're there to take the blame if something screws up badly (and you get to keep your job).

There is also some misunderstanding of the business model itself.

Canonical sells: OS + support.
Microsoft sells: OS + support.

In Canonical's case there is no cost for the OS itself, but that is actually not very important as long as the customer wants both the OS and the support. The product that Canonical sells is a combination of these two things, and that product costs money. If the product was bad, no one would buy it.

That's why Canonical cannot make Ubuntu deliberately buggy.

feravolo
April 14th, 2007, 01:19 PM
Wow,

For some reason I believe that this is going to be a hot thread for a while, the response to this statement is obvious (BS!).

I have been a member of the software trade now for over twenty years and first introduced to UNIX while I was in college in the summer of 1981 on a PDP-11 running at GE corporate in Fairfield County Conn. At that same time I remember a system sitting in the corner of the room, there also was something called a "Xerox Star" which I fortunate to have to opportunity to be introduced to it's graphical user interface (GUI).

Ubuntu is one of the finest products to be released in the world of software world ever. People need to know what Ubuntu can do for them, and there is money in that for anyone in our profession that what's to support Ubuntu.

Selling something (Linux) that you don't own just by slapping your trademark on it seems to me as completely bogus business model regardless of it's profitability potential.

Peace

Mike Feravolo
Cocoa Beach, Florida. USA

sas
April 15th, 2007, 01:59 AM
The actual software developers fix most of the bugs, not Canonical.

The better Ubuntu is, the less the support customers actually call the support team, thus saving Canonical money.

The better Ubuntu is, the more people will use it, translating into more prospective customers.

The more widely and freely available is, the more people will use it, translating into more prospective customers.

People buy Canonical support for several reasons:
* peace of mind
* Someone to call when they break things
* Someone to blame when things break
* Advice on deploying Ubuntu

I think they also do stuff around creating Ubuntu derivatives.

luca.b
April 15th, 2007, 08:47 AM
Canonical doesn't make money by the number of support calls - it charges a yearly fee for support.

For the sake of precision, a year of support with ten "incidents", i.e. support requests. I know because I asked for a quote to deploy Ubuntu on a server (sadly, the higher ups then decided to go with a Mac...).

beefcurry
April 15th, 2007, 09:25 AM
Support dosn't just mean fixing bugs. Alot of the time support also means helping while troubleshooting a setup. For example. I want to set up 200 Desktops at our school. Each student is asigned a password and username, they can log on with any computer in the school, I want the computers to log on to a centeral server to check the login details. However I do not know how to do this, therefore I phone Canonical and ask how. Thats what support means in my opinion.

Soarer
April 15th, 2007, 09:30 AM
The reviewer MAY know what he is talking about when discussing operating systems (or he may not, I can't tell) but he has absolutely no clue about how business works.

I think we can safely discount his 'opinion' on that basis.

Tundro Walker
April 15th, 2007, 04:56 PM
As a money-making business model, I would agree that Canonical is probably not as "robust" as Microsoft's. However, in regards to business ethics, I'd say Canonical far exceeds Microsoft. Let's compare.

Canonical...

Supports development of a free product in the hopes that everyone can use it, and use it on equipment they already own. They get paid for customer support calls to Ubuntu, which helps foot some of the bill, along with special side projects. In the short-term, Mark Shuttleworth has invested money in Ubuntu and Canonical to spring Linux into more users hands, and in the long-run, he may profit from this if he uses Canonical to create Linux-only software that can be charged for, Ubuntu-only consultant teams to hire out to corporations, and/or invests in Linux-only hardware companies that the large Linux base will purchase from. (that last part is speculative...I'd still like to think he's a humanitarian).

Microsoft...

Has created a virtual bubble existence for its users, not only making them think they're locked into a buggy product they have to pay to update each time a new version comes out, but pay to purchase hardware that MS has vested interests in to run that OS, and pay millions in tech support calls to support that buggy product, and (recently) instead of fixing security holes in their product, they decided it would be more profitable to roll out and charge customers for an ANTIVIRUS software package for their OWN OS (!)

http://news.com.com/Microsofts+antivirus+package+makes+a+splash/2100-7355_3-6104926.html


Comparison...

With Microsoft firmly entrenched as the company to beat in a market place, Canonical is doing the best thing it can right now...that is to produce a free product that would dethrone a product others are paying for. Once they commodotize the OS industry (IE: everyone having access to a free one that works on all systems), they've basically evened the playing field and can catapult the profit of long-term ventures they invest in and setup now that compliment the use of Linux and Ubuntu on a mass-scale in the future, like Linux/Ubuntu hardware sales, tech support, consulting firms, embedded devices that work together on the Ubuntu architecture, etc that branch off from a free foundation of Ubuntu.

In other words, it's a bit like other Linux distro's try to profit off bundling the distro and packaging/shipping it to users (like Madriva does). However, with Linux being open-source, it's hard to get folks to buy-into the idea of paying for Linux or open-source software. So, you focus on the things around the software that people would pay for...tech support, hardware, consulting.

It's actually quite smart. I just hope Mark Shuttleworth is actually a humanitarian and isn't just trying to set himself up as the next Bill Gates through the guise of humanitarianism. I don't mind someone making a profit off something, I just don't want to replace one "dictator" with another. Joel of "Joel on Software" has an old rant that sums this up more eloquently then I can....

http://www.joelonsoftware.com/articles/StrategyLetterV.html

Somenoob
April 16th, 2007, 10:03 AM
The question is always "Who benefits?" and users like to stay up to date.

The developers made flaws on purpose, to attract users to commercial support.

You may consider my theory to be improbable, but you can't think of it as illogical.

Hallvor
April 16th, 2007, 10:24 AM
That makes no sense. If you make a bad OS on purpose, people will stop using it. If people don`t use the OS, you don`t make much money from support. Secondly, it was called Edgy for a reason. It was bleeding edge, and you could expect getting cut. Thirdly, I can`t remember how many times I heard that if stability was most important, use Dapper.

kvonb
April 16th, 2007, 10:35 AM
If it was a conspiracy to get people to pay for support then why have a free and open forum where you get free help and advice?

Surely they would make it a patch release only effort with absolutely NO email access to Canonical at all, then make it impossible to contact Canonical unless you gave them a credit card number.

Hmm, sounds eerily familiar of another O/S I previously used :-k

Somenoob
April 16th, 2007, 10:36 AM
That makes no sense. If you make a bad OS on purpose, people will stop using it. If people don`t use the OS, you don`t make much money from support. Secondly, it was called Edgy for a reason. It was bleeding edge, and you could expect getting cut. Thirdly, I can`t remember how many times I heard that if stability was most important, use Dapper.

Many were encourage to switch, or at least try. bleeding edge or not, it still was an official release and in theory to created potential customers for support. People have an habit to upgrade even if not needed.

Somenoob
April 16th, 2007, 10:39 AM
If it was a conspiracy to get people to pay for support then why have a free and open forum where you get free help and advice?

Surely they would make it a patch release only effort with absolutely NO email access to Canonical at all, then make it impossible to contact Canonical unless you gave them a credit card number.

Hmm, sounds eerily familiar of another O/S I previously used :-k

First of all commercial support is far superior. Some users and especially companies are more likely to trust official support than some discussion forum oddballs.

And don't try to disprove this, you'll ruin the fun :D

kvonb
April 16th, 2007, 10:43 AM
hahahah :rolleyes:

TravisNewman
April 16th, 2007, 03:59 PM
*sigh*

aysiu
April 16th, 2007, 04:34 PM
This has already been discussed fairly recently. I'm merging your thread with the other, similar one.

Somenoob
April 16th, 2007, 04:58 PM
This has already been discussed fairly recently. I'm merging your thread with the other, similar one.

thanks, please note that my theory should not be taken seriously, or maybe it should :-k

guinra
April 18th, 2007, 12:00 AM
Canonical sells: OS + support.
Microsoft sells: OS + support.



Not only is their motivation not to produce a shoddy distro, but the other example, Microsoft, makes a shoddy OS and sells support. Either way, it seems to work :)

NJC
April 18th, 2007, 12:22 AM
If Ubuntu makes a crappy OS, no one will use it. They won't pay more for support. They just won't use Ubuntu.

Precisely correct IMO.

arsenic23
April 18th, 2007, 10:10 PM
Wait... isn't this a joke site ??

http://www.shelleytherepublican.com/category/education/technical/linux/

???

jcconnor
April 26th, 2007, 10:32 PM
I worked for an operating system company 20 years ago that made a multi-user DOS clone called PC-MOS. I was the tech support supervisor. Know what we called our beta test program?? Version 2.0. :)

1 week after I resigned (I got tired of explaining day after day why our product sucked - well that and more money) they layed off half the work force. 2 years later they were out of business.

A software company that foists a bad product on the market (whether they sell support or not - and selling support is a gold-mine only if you can keep your call volume down) will go under. They may be able to offset the affects of 1 bad product with a good product (we had 2 versions, both sucked) but eventually the bad products will fail.

Shuttlesworth didn't fly to the ISS on caviar dreams and champagne wishes so, while I think he is doing part of Canonical as a philanthropy, the company would (I bet) love to make some real money. The way to make real money isn't really with the schlubs that hang out on the forums.

It's getting corporations hooked into your server/desktop software (and the resultant support contracts) and in the dollars that could potentially be made in having Dell outsource their Ubuntu support to the Canonical support staff. However, one good way to get in to those corporations and to help companies like Dell see the light of day is by gaining mind-share with the people that are going to be recommending OS choices to their bosses and to their bosses bosses. And that, my friendly schlubs, IS the folks on the fourms.

Just my 2 cents.

sloggerkhan
April 26th, 2007, 10:41 PM
Support is what people who don't wan't to learn how to use computers or be responsible for maintaining computers buy to pass the buck. I don't think demand for it is too significantly related to the effectiveness of the product, at least among businesses, where blaming problems and delays on 3rd parties and technology is a common thing. (If company couldn't say "computer problems" to a missed deadline or a delay and then point to a 3rd party, the American economy could go into severe shock ;) )

jiminycricket
April 30th, 2007, 11:48 AM
I just saw this from this week's "The Fridge" (https://wiki.ubuntu.com/UbuntuWeeklyNewsletter/Issue38) newsletter: an interview with Mark Shuttleworth on Linux in business: http://www.openbusiness.cc/2007/04/24/interview-with-mark-shuttleworth-how-to-make-a-business-out-of-free-software/

Doughy
April 30th, 2007, 11:49 PM
I just saw this from this week's "The Fridge" (https://wiki.ubuntu.com/UbuntuWeeklyNewsletter/Issue38) newsletter: an interview with Mark Shuttleworth on Linux in business: http://www.openbusiness.cc/2007/04/24/interview-with-mark-shuttleworth-how-to-make-a-business-out-of-free-software/

Interesting... he sounds genuine. Thanks for posting.