It looks like astronaut and tech magnate Mark Shuttleworth's investment in the Ubuntu commercial Linux distribution is about to pay off. Ubuntu is taking off like a rocket, and the sale of Novell to Attachmate plus the higher prices Red Hat is charging for its Enterprise Linux 6 are probably going to fuel Ubuntu's adoption even more in the data centers of the world.
The third Long Term Support release, Ubuntu 10.04, came out in April and seems to have been a turning point for the Ubuntu distribution. With that release, Canonical demonstrated that it could tame the Debian variant of Linux and put together a polished desktop and server operating system with commercial-grade support options like those available through Red Hat and Novell. On the server front, the server variant of the 10.04 LTS release had all of the new or impending x64 processors from Intel and Advanced Micro Devices baked into it as well as a fully integrated variant of the Eucalyptus cloud framework for creating cloudy infrastructure for applications to romp around.
Neil Levine, vice president of corporate services at Canonical, said that the initial LTS release, 6.06, put a stake in the ground, establishing the five-year support guarantee for servers and three-year term for desktops. LTS 8.04 saw a healthy uptake among corporations looking for alternatives to Solaris, RHEL, SUSE Linux Enterprise Server, and even Windows sometimes and proved the quality of the distro that Canonical could bring to market. With the 10.04 LTS release, Canonical proved to companies that the two-year cadence for new LTS releases was real and that Ubuntu could be trusted to run with the big boys.
So how is Canonical doing money-wise now that 10.04 LTS has been out for seven months? Stellar, apparently.
"We see a great, great year financially for my division," Levine told El Reg in an interview. The prior two LTS releases as well as the interim releases are being deployed by programmers and system administrators as companies build out applications - the same way that proprietary minicomputers, Unix machines, and Windows boxes all made their way into the data center in their successive waves over the past three decades. "When people realize they have a hundred servers running Ubuntu, they realize they need a commercial relationship with Canonical."
And thus, for the past three calendar quarters, the number of support contracts for Ubuntu's desktop and server distributions collectively have been doubling each quarter. Levine is projecting a three-fold increase in support revenues at Canonical in the company's current fiscal year, which ends in March 2011. Interestingly, the server revenue stream is growing a lot faster these days than the overall support contract revenue growth, says Levine, and is approaching a 50-50 split.
Server support contracts cost a lot more and are therefore driving that revenue growth. This was the long-term plan that Shuttleworth always had, of course. Step One: Build a Windows alternative for desktops, seed the market with Ubuntu enthusiasts. Step Two: Build a Unix and Windows alternative for servers, seed the market with more enthusiasts. Step Three: Profits!
As you know, Canonical does not put call-home programs in its Ubuntu Server editions, so it actually is clueless how many people are using Ubuntu Server. And being a private company, it is certainly not going to share the revenue numbers and customer counts it has for companies that have bought Ubuntu Server support contracts. But Levine did provide El Reg with some outside data from Netcraft, the Web server counters, to show how Ubuntu is doing at least as well as El Reg's world-famous PARIS Vulture 1 paper spaceplane.