Forbes magazine online has been publishing a series of articles on open source. Most of them have been decent, but Daniel Lyons continues, annoyingly, to persistently get certain things wrong. Today’s article is on Shuttleworth and our favorite Linux distro, Ubuntu. I must say that it strikes me as odd that the same type of FUD used by RedHat and others against Ubuntu seems eerily similar to Microsoft’s FUD against Linux in general circa 1998 – 1999. Back then, it was all the rage for folks who didn’t think Linux would survive to talk about how the enterprise would never buy into something with no guaranteed viability. Of course, we see how that changed over time. In fairness to Ubuntu critics, things will certainly have to change in the future. After all, losing money can only be fashionable for a limited time. However, it would seem to me that Mark is looking at this as a long-term gig and understands what needs to happen.
To me, it would seem that Ubuntu is in what I consider the pyramid-building phase – building a solid user base, some percentage of which will eventually represent annualized revenue as a result of upselling. The idea is that if your base is large enough (or wide enough, continuing with the pyramid analogy), the top of the pyramid will provide the revenue needed for future growth. This, of course, carries with it a certain amount of risk, the largest being that the height of your pyramid will be too small as the result of too few users converting to paying customers. In any case, I would estimate that Ubuntu is at least a full year away from really needing to convert users en masse to paid customers. Right now, they just want the largest base possible to build on. The larger the base, the more leverage you have.