Canonical, the company producing Ubuntu GNU/Linux is continuing to grow although still not profitable in the usual sense. In their last fiscal year they had revenue of $65.7million, an increase of $8.5million over the previous year. That’s a growth rate of 12%, not bad when client PCs are slumping. Still all of that was eaten up by huge “administrative expenses”, $82.2million. Clearly, Mark Shuttleworth is not concerned about the bottom line or he would cut staff. I expect this is all about building revenue. The greater the investment, the greater the eventual profit. Still, the hole is deep. Accumulated losses are $51.3million.

What this means in terms of installations and support contracts is anyone’s guess. The revenue keeps growing and so do the numbers of paid staff. The top dogs are getting $hundreds of thousands per annum. There is a commitment for another year. Shuttleworth must view this as worthwhile. They were predicting 5% of shipping legacy PCs, 15 million or so. With that kind of volume it should not take much more effort to break even. Imagine if the “unification” business works and they get into the mobile space seriously…

Canonical Group Limited Annual Accounts 2013.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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10 Responses to Canonical

  1. ram says:

    With respect to RedHat and distributions based on it: have you every tried to compile the full version of OpenSSL on it? It will not let you!
    Why is that? Same ultimate financial support source as to Canonical?

    Figure it out folks! It is staring you in the face!

  2. ram says:

    Again, I recommend that you look into Mark Shuttleworth’s background very closely. It would remove the mystery from why Ubuntu distributions have done things such as save the root password in plaintext in a file where one would not expect it to be (try doing a search across all the disks for the initial root password – whatever you happened to set it to). Or how about WiFi network passwords being saved as plaintext.
    I could go on … and on… and on;-)
    I would never use Ubuntu connected to the Internet and don’t recommend it anymore for anything.

  3. lpbbear says:

    Yes dougman, it does….partially. Xandros was one of the first Linux companies where Microsoft used patent threats to attack. Microsoft also attacked Linspire, TurboLinux and a few other high profile Linux companies that were headed towards a desktop friendly version of Linux around that same time.

    Yes, Xandros was wrong to give in so yes they do share some blame for giving up but….ultimately it was Microsoft who attacked them and forced this upon them.

    I also am a computer service support guy. I was selling Xandros at the time and my customers loved it. It was a real loss and I still don’t think any distribution has equaled the level of user friendliness that Xandros achieved. That is exactly why Microsoft attacked them.

  4. dougman says:

    Actually the blame lies on Xandros:

    From Groklaw’s analysis, the CEO and it’s management never had a clue.

  5. lpbbear says:

    I agree with you. I think its a combination of both issues. A few years back after Microsoft trashed both Xandros and Linspire I moved customers…or should I say attempted to move them….. to Ubuntu/Kubuntu. I was at the time advising customers to use one or the other. I had hopes that Canonical would pick up the baton from those other companies in the realm of creating a very user friendly version of Linux that would attract and hold new users to Linux. As time went on the constant problems with quality of releases finally drove me to abandon any hope I had of them being able to fill the gap of being a user friendly dependable version of Linux. While there is much to say good about Ubuntu/Kubuntu its obvious, from the number of off shoot distributions based off of both that are doing a better job than the parent, that Canonical is steadily losing support with the very people who would be most likely to act as their prime advocates…Linux users. “Unity” and “Mir” are only making that situation worse. I would no more advise customers to use “Unity” than I would advise them to use “Metro”.

    At this time I use PCLinuxOS and find it to be a much better distribution than Ubuntu. I cannot stand “Unity”. In my opinion Xandros was and still is unsurpassed in the area of being a really user friendly Linux desktop version. Its a shame they were killed by Microsoft.

  6. lpbbear wrote, “people who would most likely comprise its main customer base, Linux fans.”

    I don’t think that’s correct. A lot of fans of GNU/Linux, like me, like more control over what goes on than Ubuntu GNU/Linux provides. It’s intended for the mass-market: consumers. That’s why so many millions of units are distributed annually. That’s why OEMs ship it. That’s why Dell has stores in China and India giving it retail space. There’s nothing wrong with such goals and roles. It’s the way that Canonical wants Ubuntu GNU/Linux to leverage that popularity by forcing undesirable changes on the rest of the GNU/Linux community that bugs me. Clearly, a lot of hardware and software manufacturers cater to Canonical so Canonical has near-monopoly power in GNU/Linux desktops. They are not using that power wisely, IMHO. There’s no need and it’s detrimental to tick off the community just because you can. Canonical could be just as far ahead without having burned bridges. It’s the actions of salesmen, not the community that has built its installed base but it’s the community that gives them stuff to install. It’s the community that provides a lot of free advertising/good will. Canonical is wasting that advantage it has over the likes of M$ by trying to be the same kind of bully as M$.

  7. lpbbear says:

    Mistakes like “Unity” and “Mir” are causing a steady defection of the people who would most likely comprise its main customer base, Linux fans. Because of that they more and more have to attract users from that other OS. With fewer Linux fans being behind it and acting as advocates that becomes a increasingly harder proposition.

  8. Mats Hagglund wrote, ” Their business model seems to be kind of fiasco: trying to be corporate and community in same package. It won’t work.”

    If you are as rich as Shuttleworth there are no fiascos. This loss is pocket-change to the interest on his wealth. It’s a tax-deduction. OTOH, Canonical is growing like a weed. Whenever he wants it to make money all he has to do is reign in the hiring/acquiring a bit. If there is a problem with his plan it is that he gives too much respect to M$’s way of doing things. Imitating disaster courts disaster. Ubuntu would be better off if he would stop jerking around the community. It’s one thing to stimulate the community. It’s quite another to be constantly changing direction.

  9. oiaohm says:

    Mats Hagglund Redhat has taken centos in with Fedora.

    So Redhat is now 3 OS’s. Fedora ok up-stable nasty bit of works. Redhat enterprise stable but must be used with support contracts. Centos Stable but has higher fees for support.

    So redhat is still mastering the art about how to extract the most possible.

    Key thing with redhat don’t intentionally insult or disregard your users. They will only go else where as Redhat learnt with scientific Linux and centos.

  10. Mats Hagglund says:

    They can’t continue burning money. Their business model seems to be kind of fiasco: trying to be corporate and community in same package. It won’t work.
    Instead they should learn very carefull what RedHat has done so better:

    “For the full year, GAAP net income was $150 million or $0.77 per diluted share, compared with $147 million or $0.75 per diluted share in the prior year. After adjusting for stock compensation, amortization expenses and certain facility exit costs, as detailed in the tables below, non-GAAP adjusted net income for the year was $240 million or $1.23 per diluted share, compared to $216 million or $1.10 per diluted share for the previous fiscal year. “

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