Open vs. Closed: Ubuntu Walks the Line

Any debate over open vs. closed systems has to touch on open-source software and the ways in which companies are attempting to build code as a community effort, while still profiting from it in some way. So I chatted with Mark Shuttleworth, CEO founder of Canonical, the company that supports Ubuntu, about how it walks the line between spending to support open-source software and finding a business model that works.
Canonical’s 330 employees are responsible for maintaining, supporting and selling service for Ubuntu, an open-source version of the Linux operating system for servers, desktops and computer manufacturers. Some 120-150 of the Canonical employees contribute directly to the new releases of the software that come out every six months, and most of the company’s revenue comes from supporting enterprise server customers and makers of computers that want to put Ubuntu on desktops. Consumers also download the software, but few pay Canonical for support. The company is not yet profitable.
Shuttleworth believes that in order to develop a strong business model around an open approach, one has to create an open option early, ideally through a strong standardization process and one also needs to have a lot of different open-source projects fighting it out.  For example, in the operating system world there wasn’t a strong history of open alternatives, which meant that Ubuntu had to out-open its proprietary competition, which has high costs.

In that way it has pushed Canonical perhaps further out toward open on the spectrum. Shuttleworth calculates the direct costs of being so open as bringing people together in ways that empowers them and makes them feel like members of a community, as well as reaching out and putting in place the infrastructure to create a company. However, there are indirect costs as well.
“There is a myth that being open is necessarily more efficient and cheaper, but there are no hordes of people showing up to do the hard stuff,” Shuttleworth says. “Occasionally wonderful, magical things happen — really incredible things do happen, like people show up unexpectedly with brilliant ideas — but it’s still hard and expensive and you still have to be willing to do all the hard and expensive things and do it in an open fashion. And you’re still likely to be accused of being open only when it’s convenient.”
He points to the cloud computing market as one that tends to give a lot of lip service toward openness but where a lack of a big standardization effort and robust open source competition could lead to a relatively closed ecosystem.
“The basic story there is pretty bad at the moment,” Shuttleworth says. He notes that proprietary infrastructure, hypervisors and even the APIs and ways data is stored can lock folks into one cloud for life. “We need real open alternatives early in the process, making it possible for people to build own cloud infrastructure that responds to the same APIs that Amazon’s (s amzn) do.”
He’s accepted that Amazon Web Services’ APIs for its web services, while not created through an open standards group, have become a de facto standard and said that it’s more efficient to build open-source code around Amazon (s amzn) APIs rather than try to develop new ones for accessing the cloud. Canonical has a partnership agreement with Eucalyptus, which offers open-source software to create an AWS-compatible cloud, where people can use Ubuntu  and Eucalyptus to create their own cloud computing platform. But Shuttleworth would like to see more open-source options other than Eucalyptus  for building out a cloud computing service of your own.
At the platform-as-a-service level, the issue around openness will be around moving data from cloud to cloud easily. There’s room there for an open standard or open databases, he said. But at every level, when considering building a business around open source software, he he believes that “you want a common and clear standard with competing open source versions using that standard.”
That keeps proprietary vendors at bay, and gives the companies building a business around the open-source software a chance to decide where they want to be on the open-to-closed spectrum. But it also introduces the prospect of fragmentation, which we’ll leave for a later post.
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