Forbes has a profile of Mark Shuttleworth and Ubuntu. What I found most interesting about it is the financials:
Ubuntu now has 4 million users, half of which are governments, universities and a smattering of businesses. It adds new ones at a rate of 8% per month. After its public release in October 2004, Ubuntu quickly deposed Red Hat’s Fedora as the most popular version of Linux on DistroWatch, a Web site that caters to Linux users. Ubuntu works in 22 languages, and Canonical, the company Shuttleworth set up to distribute his software, will send a free Ubuntu CD anywhere in the world. New users rave about the simple user interface, which has gained recent converts in a couple of well-known bloggers who switched from Apple Computer’s OS X.
In May, Sun Microsystems announced plans to offer Ubuntu on Sun’s Niagara chips, which power its newer Sparc servers. While Sparc servers aren’t a particularly big market, the stunt made clear that Shuttleworth aims beyond home hobbyists.
Canonical has burned through $15 million of Shuttleworth’s money in two and a half years. He says that it will take him at least another two years to even know whether it has a chance to become profitable, and that it may never return his investment. But that doesn’t matter. He’s paying all the bills either way, along with setting up a $10 million endowment for the Ubuntu Foundation that’s earning interest for a day when his attentions may drift elsewhere.
I mean no disrespect to Mr. Shuttleworth when I say this, but $15 million is a shockingly small amount of money with which to build a full-featured desktop operating system. Microsoft’s advertising budget for each version of Windows is an order of magnitude larger than that. Apple pulls in hundreds of millions of dollars with every release of Mac OS X, while Microsoft makes billions of Windows.
If Shuttleworth can build a viable alternative to desktop Windows for $15 million, or even $50 million, he’ll only need to capture a small fraction of the value of the product to make his money back. Indeed, Google is reputed to have paid Firefox millions of dollars just for having it search engine as the default in the Firefox search bar. If you can build a product that’s integral to the lives of millions of people, it’s not that difficult to generate a few million dollars in revenue from it.
Shuttleworth may or may not succeed (as I’ve written before, it needs a lot of work), but even if he fails, it’s easy to imagine others trying the same trick. As the Linux codebase grows, the investment required to add the remaining features necessary for a user-friendly desktop OS will continue to shrink.
Actually, in a sense it’s already happened: Mac OS X is built mostly on open source software, with just a thin layer of proprietary software on top. Mac OS X cost a lot more than $15 million to develop, but it’s a safe bet that it cost a lot less than Microsoft’s approach of building the whole thing from the ground up.
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