No doubt, you know Ubuntu 10.04 debuts today. Most Ubuntu trackers are focused on the desktop and server editions — where Canonical seems to be making progress with ISVs and partners. But during a recent discussion with Canonical Chief Operating Officer Matt Asay (pictured), it became clear to me that Canonical thinks Ubuntu Enterprise Cloud may unlock key revenue opportunities for the company. Here’s why.

Of course, Canonical is pursuing multiple strategies to drive revenue. A few examples include:

• Ubuntu desktop and server support
• Subscription revenue from Landscape, a remote management tool for Ubuntu. Landscape is available as both as SaaS and on-premises solution
• Subscription revenue from Ubuntu One, the online storage and file sharing system
• Revenues from the new Ubuntu One Music Store
• Consulting revenues from multiple projects, including Canonical’s decision to help Google with Chrome OS
• Some new opportunities around Ubuntu Enterprise Cloud

How are all of those revenue streams performing? As an outsider looking in, it’s impossible for me to say. But my recent conversation with Asay offered some interesting insights — especially with regard to Ubuntu Enterprise Cloud. “I think the cloud was made for Canonical,” said Asay. “On the desktop and the server some people have been conditioned not to pay. We remain one-thousand percent committed to a free OS strategy. That makes my job hard. But in the cloud — it doesn’t. People are conditioned to pay in the cloud.”

Asay says Ubuntu Enterprise Cloud now has 12,000 active deployments, with 200 new ones coming online each day. (Still, we didn’t get into deep details about how many of those deployments are monetized.)

Within a few months, Canonical plans to announce “more cloud services” and Canonical will keep “rolling out new functionality into a subscription offering,” said Asay.

More Money Matters

Asay declined to discuss specific details about Canonical’s revenue streams. But he did offer some more clues about how Canonical’s business is shaping up.

On the revenue front, Canonical’s fiscal year runs April 2010 to March 2011. Asay predicts Canonical will “do multiples over what we did last year. We’re starting from a good [revenue] number and we’ll do several times more than in the previous year.”

As part of that effort, Canonical is rolling out an enterprise subscription service within the next few weeks. And on the desktop, Canonical has signed a “fantastic deal” that’s worth a lot every year.”

Still, Asay concedes that Canonical faces challenges. Roughly 300 of the company’s 330 employees are engineers — meaning that Canonical still needs to ramp up its marketing and sales efforts more aggressively. But “because the company didn’t focus on money so long, the opportunities to make money are just sitting there.”

With the release of Ubuntu 10.04 LTS, Canonical is rolling out their brand new “Ubuntu Certified Professional Certification.” And it’s kind of a big deal, especially when this shows that Ubuntu is gaining traction and adoption. Here’s the full details…

The 100% Ubuntu-focused training and exam for certification comes quite simply from the demand or it. According to Ubuntu’s press release:

“The Ubuntu Certified Professional course was previously attached to the Linux Professional Institute’s LPIC-1 programme, with students required to complete LPI plus Canonical exams in order to become certified. Over its four year lifespan the certification has proven to be popular with many students, and there was consistent demand for an ‘Ubuntu-only’ certification with examination specific to the distribution. Hence, the decision by Canonical to certify the course itself.”

So what does Canonical now provide with it’s new fully-independent branch of certification? It’s a quality course aimed at junior-level system administrators helping them get the most out of their Ubuntu deployments. There’s an e-learning course that will be “available shortly” and students can ’study’ in a digital classroom from June 2010 to the exam that’ll be offered in October of 2010.

Billy Cina, Director of Training at Canonical noted that they were confident in this move, especially from the response, feedback and demand. According to her, the new web-courses will…

“…benefit students globally…[and]…also enable us to move from a multiple-choice- to a ‘Live labs’-type exam which is entirely web-based, testing students’ ability and Ubuntu skills far more effectively.”

How do you qualify to take the exam? Well, no Linux experience necessary, but you will have to be a system admin with IT training and experience in the field is a must. The courses last for 5 days in a classroom or a ’self-paced’ e-class. Exams can last from an hour to an hour and a half and come straight from Ubuntu Trainer Partner facilities “or anywhere with a secure broadband connection”

And is there a cost? Of course. It’s looking like anywhere between $300-350 for the exam, but the price isn’t finalized. And if you’re feeling advantageous, Canonical is looking for students to assist in developing the exam by taking a test exam. Interestingly, English language comprehension is a must, along with a broadband connection.

More information on the exams is slated to come out in May 2010. Are you ready to get certified? Jump in here for more details on courses available now.

No doubt, it’s sometimes difficult to measure Ubuntu’s business success. Canonical says Ubuntu now has about 12 million Linux users — up from an estimated 8 million users in 2007. That sounds impressive, but what does that really mean in terms of Ubuntu’s market penetration, Canonical’s march to profitability and Ubuntu’s progress as a Linux distribution? In my mind, there are additional data points Canonical could share to further show Ubuntu’s momentum. Here they are.

On the one hand, I want to give Canonical credit: 12 million estimated users is a big figure. And it provides a foundation upon which Canonical can promote additional services — Landscape, Ubuntu One, Ubuntu Music Store, etc. — to consumers and business users.

But just how well is Canonical doing? In March 2010, new Canonical CEO Jane Silber said the company had about 320 empl0yees and was on a path to profitability. But she conceded the company wasn’t yet profitable.

As a privately held software company, Canonical certainly doesn’t have to say much about its financial performance. But frankly, I think Canonical can share a bit more information without having to completely open its books.

A few ideas…

1. Time to Phone Home: In a LinuxPlanet article, Canonical VP Chris Kenyon conceded that the company had has no registration or “phone home” process for Ubuntu, so deployment and user numbers are always a guestimate. In my mind, it’s time for Canonical to more closely track Ubuntu. Find a way to maintain customer privacy but begin to have Ubuntu phone home. The data points will show Canonical key regional and international trends that could help future business development.

2. Change the Landscape: Canonical offers Landscape — a tool for remotely managing Ubuntu systems — in SaaS and on-premises configurations. For the SaaS version, Canonical should start disclosing just how many Ubuntu systems are being managed worldwide. If it’s too early to share those numbers — after all, Landscape is just getting started — then simply share year-over-year growth percentages for Landscape-managed systems.

The idea here is to push beyond the consumer desktop mindset. By sharing some Landscape management stats — even rough percentage growth rates — Canonical can more effectively position Ubuntu as a business solution for notebooks, desktops and servers.

3. Open Up Ubuntu One: I realize Canonical may not want to disclose how many people are paying for the storage and file sync service. But there are other ways to show growth… For instance, percentage growth (quarter-over-quarter) for the amount of storage Ubuntu One handles. And soon, some stats for the Ubuntu Music Store would be a solid step in the right direction, too.

Reality Check

Ultimately, Canonical faces many familiar challenges that we frequently hear about in the open source market. Other than Novell and Red Hat, it’s difficult to find publicly held companies that disclose in-depth information open source revenues.

But there are ways to show progress. Many open source companies will disclose how many “paying customers” they have. Others will disclose year-over-year revenue growth rates.

In the months ahead, I hope Canonical takes similar steps. The effort could help to silence Canonical’s critics while also giving customers and partners peace of mind as they consider more Ubuntu-oriented business efforts.

I must concede: Sometimes I worry Canonical is trying to do too much too soon with Ubuntu. From mobile devices all the way to enterprise servers and cloud computing, founder Mark Shuttleworth has big aspirations for Ubuntu. There are times when I think Canonical is stretched too thin on multiple fronts. But just when I get really worried, the company makes a major move that impresses me. A case in point: Open source expert Matt Asay has joined Canonical as chief operating officer. It’s a big move for Canonical, Ubuntu and Asay. Here’s why.

Asay arrives at a critical time in Canonical’s history. The company is transitioning the CEO role from Mark Shuttleworth to Jane Silber. A major product launch (Ubuntu 10.04 Lucid Lynx) seek to push Canonical much deeper in the business market, from mobile devices to cloud computing. And Canonical continues to launch and build new new services like Landesk Landscape and Ubuntu One.

So why do I worry? When I speak with Canonical insiders, I sometimes sense the enormity of the challenges they’re facing. Different product groups are working toward different goals. Somebody has to coordinate all those efforts. That’s where Silber and Asay enter the picture.

Asay’s track record at Alfresco and Novell on open source business matters is strong. He understands how to monetize open source without alienating a community — a difficult balancing act for many commercial open source efforts.

And full disclosure: I’ve met Asay a few times. And I’ve linked to his blog, The Open Road, over and over again because of his business insights.

Asay explains his move to Canonical in his own blog. And Canonical says Asay will be:

“Responsible for aligning strategic goals and operational activities, the optimization of day-to-day operations, and leadership of Canonical marketing and back-office functions.

Most recently VP, Business Development for Alfresco, Asay has been involved with open source since 1998, and is one of the industry’s leading open source business strategists.”

As I’ve pointed out multiple times, Canonical has grand ambitions in multiple software markets. The company needs an expanded executive team to potentially meet those lofty goals. Asay arrives just in time.

In this WorksWithU podcast, editorial director Joe Panettieri speaks with Ken Drachnik, Landscape manager at Canonical. Landscape is Canonical’s remote management and monitoring tool for Ubuntu systems. The Podcast conversation covers the following key items…

0:00: Introduction
0:32: What exactly is Landscape?
1:07: Is Landscape positioned for small, midsize or large organizations?
2:02: Is Landscape for netbooks, notebooks, desktops or servers?
2:45: Can Landscape manage Ubuntu in the cloud?
3:55: Does Landscape run on-premise or is it a SaaS (software as a service) solution?
5:10: What is Landscape dedicated server?
5:31: Is Landscape available globally?
5:46: How is Landscape priced?
6:17: Where is Canonical heading next with Landscape?
7:24: How to find more information about Landscape
7:52: A link for a free Landscape test
8:10: Final thoughts
8:39: End

Please note: This podcast was sponsored by Canonical.

As Ubuntu 9.10 debuts today, I’d like to spend less time talking and more time listening — to you. What is your initial reaction to Karmic Koala? Desktop and mobile feedback is always welcome. But I’m particularly interested in server, cloud and Landscape feedback from IT administrators. Please feel free to post a comment or email me directly (Joe [at] NineLivesMediaInc.com). WorksWithU intends to develop a series of user case studies exploring Ubuntu 9.10’s business performance across mobile, desktop, server and cloud systems. I look forward to your thoughts.

During a phone briefing today, Canonical CEO Mark Shuttleworth described the Ubuntu 9.10 desktop, server and cloud strategy to members of the IT media. WorksWithU tuned in and posed some key questions to Shuttleworth. Here are 10 highlights from the call.

As you’ll recall, Ubuntu 9.10 is scheduled to debut Oct. 29. Shuttleworth’s thoughts from today’s call included:

1. The User Experience: “We wanted to bring design and user experience to [the Linux] desktop.” Shuttleworth believes Ubuntu 9.10 achieves those goals.

2. Competition with Microsoft, Windows 7: Shuttleworth concedes that Windows 7 is impressive but “it’s still proprietary and expensive.” Also, he says, OEMs have “no desire” to go back to a single-vendor operating system market.

3. On the Netbook Market: Shuttleworth concedes that Microsoft “clawed its way” back dramatically in the U.S. netbook market with Windows XP. But he hopes once the Windows 7 dust settles, vendors and users alike will realize Ubuntu netbooks are a natural choice.

4. On Oracle’s Buyout of Sun (and MySQL): Shuttleworth sees no reason for regulators to block Oracle’s buyout of Sun Microsystems nor, by association, the MySQL open source database. Shuttleworth doesn’t see an opportunity for Oracle to abuse its database power. Plus, he notes that open source code can quickly fragment if there’s community concern about the governance and leadership of a project.

5. On Canonical’s March Toward Profits: Shuttleworth says he has “no concerns” at this stage about Canonical’s ability to achieve profitability. If necessary, Canonical could quickly focus on specific business areas that are self-sustainable in the near-term, he asserted. But at this point in Canonical’s five-year business journey, Shuttleworth remains convinced that the best strategy is to make Ubuntu an end-to-end solution.

Translation: Shuttleworth isn’t ready to say how soon Canonical could achieve profitability. But he’s basically saying the company is willing to lose money in certain areas as new businesses ramp up and strengthen the overall Ubuntu ecosystem.

It’s a daring bet considering how many different areas of focus Canonical has taken on. But then again, I doubt we would have launched WorksWithU if Canonical only wanted Ubuntu to be a desktop operating system.

6. Simple Commercial Software Installs: The Ubuntu Software Center will gradually gain more and more commercial software options — though the exact details of those efforts are still being worked out.

7. Closed Source ISVs — Still A Challenge: Shuttleworth conceded that Canonical’s biggest weakness in the enterprise remains a lack of traditional closed source ISVs. The elephant in the room was Oracle…

8. But There Is ISV Progress: Still, Shuttleworth was quick to note continued ISV progress with such companies as IBM’s information management group, Alfresco (open source content management) and JasperSoft (open source business intelligence).

9. Amazon As A Cloud Standard: Shuttleworth said Amazon’s cloud APIs are emerging as a de facto cloud standard, though he expects open, vendor-neutral cloud standards to gradually materialize.

10. Sever Hardware Relationships: Shuttleworth conceded that he had no new server relationship or certification deals to disclose.  From where I sit, it seems as if Amazon Web Services (particularly, the Elastic Compute Cloud/EC2) and Eucalyptus cloud technology are emerging as Canonical’s most reliable doorway into the server market.

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Canonical is preparing to raise the storage limit on Ubuntu One, based on beta tester feedback from those who are using the online storage system. Longer term, Canonical also is listening closely to user feedback requesting Ubuntu One support for Windows, Mac OS X and Apple iPhones. Here’s the update.

Ubuntu One is a cloud service that allows Ubuntu users to share and sync files across their Ubuntu systems. The service, set to officially launch around the time Ubuntu 9.10 debuts in late October 2009, is free for up to 2GB of storage but costs US$10.00 per month for users who want up to 10GB of storage. WorksWithU Contributing Blogger Christopher Tozzi recently wrote about his own use of Ubuntu One.

Apparently, some beta testers told Canonical Ubuntu One needed a higher storage limit in order to compete effectively against rival SaaS storage and cloud services. Canonical now plans to raise the limit in time for the Ubuntu One launch this month, though the new storage limit is yet to be disclosed, according to Ubuntu One Product Manager Matt Griffin.

Update, Oct. 1, 3:58 p.m. eastern: Griffin just emailed me. It’s official. The paid storage limit will rise to 50GB priced at US$10 per month.

Beyond Ubuntu

Canonical also is listening closely to Ubuntu One user requests for Windows, Mac OS X and iPhone support. As currently designed, the Ubuntu One beta only supports Ubuntu 9.04 or greater.

Short term, Canonical’s top Ubuntu One priorities are:

• (A) ensuring the back-end infrastructure — built atop Ubuntu Server Edition — is ready to go for launch, including scaling the system across Canonical’s own data center infrastructure plus Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (S3).
• (B) optimizing for Ubuntu users.

If there truly is near-term demand for cross-platform support, Canonical hopes third-party developers will fill that void and do the porting work. Out on Launchpad and other forums, “a few people have chimed in and said they’re interested in doing [cross-platform] development, but we haven’t seen anything concrete yet,” says Griffin.

If third-party developers don’t port Ubuntu One to Windows, Mac OS X and Apple iPhone, Canonical may “revisit the discussion at the beginning of next year [2010],” adds Griffin.

Money Matters

In the meantime, Griffin says Ubuntu One has “tens of thousands” of beta testers, though he declines to say how many testers opted for the free version and how many opted for the paid version.

In terms of Ubuntu One revenue generation, “We have some goals but we don’t have the statistics yet to validate those goals,” says Griffin. “We do want it to be a self-sustaining service.” Translation: There’s a business plan for Ubuntu One, but Canonical isn’t quite ready to disclose hard numbers with bloggers.

Ready, Set, Go

Overall, Griffin says Ubuntu One is go for launch later this month. And he says the service will include “additional features” at launch, including the ability to synchronize Evolution contacts. Canonical also is kicking around some concepts that may let “free” users test “paid” features for a window of time, he adds.

Ultimately, Griffin asserts, Ubuntu One will offer a great “out of box” experience that’s as simple as launching the client and authenticating the desktop.

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More than 600 people registered to attend Atlanta Linux Fest, which was held Sept. 19. Many of the standing-room-only sessions focused on Canonical and Ubuntu. Here are nine Ubuntu-oriented highlights from the event.

9. New ISVs in 2010?: Software Partner Manager John Pugh focuses on Ubuntu Server Edition. He’s certainly upbeat about the October 2009 release of Ubuntu 9.10. But Pugh is already looking forward to Ubuntu Server Edition 10.04 — which is a Long Term Support (LTS) release. Pugh says Canonical is speaking with major closed source ISVs (independent software vendors, Oracle among them) and Canonical hopes to generate some more ISV support as part of the Ubuntu 10.04 launch.

Still, Pugh also cautioned readers not to focus too much on any one particular ISV, since Canonical’s efforts involve discussions with multiple companies.

8. Moving Between Public and Private Clouds: Pugh’s late-day presentation on cloud technologies attracted a standing-room-only crowd. He described how customers will be able to move Ubuntu applications between public and private clouds using such technologies as Ubuntu on Amazon’s Elastic Compute Cloud (public) and Ubuntu Enterprise Cloud powered by Eucalyptus.

7. Rugged Ubuntu Devices: EmperorLinux Inc. President and CEO Lincoln Durey showed me a small, rugged Panasonic Toughbook device running Ubuntu. Durey mentioned the device is ideal for such vertical markets as real estate, health care, and insurance. Watch for a FastChat video featuring Durey to debut on WorksWithU later this week.

6. More Cellular Devices Coming: Pete Graner, Canonical’s kernel team manager, told me to expect cellular and mobile broadband-type companies to offer more Ubuntu-oriented devices.

5. Small Business Server Remix? Nope: Pugh said Canonical wasn’t currently working on any type of Small Business Server version of Ubuntu. But he said Ubuntu in the cloud and Ubuntu Server Edition could certainly meet small business needs. Plus, Pugh noted groups like Amahi are working on Ubuntu for home servers.

4. Ubuntu Server GUI? Nope: Pugh told me Canonical has no plans to introduce a GUI (graphical user interface) on Ubuntu Server Edition. For novices who are looking for a server GUI, Pugh recommends running Ubuntu Desktop Edition as a server.

3. Staffing Up: Several Canonical employees mentioned to me that the five-year-old company now has 300 employees. Sounds like Canonical has pushed beyond the small business stage of its existence.

2. Ubuntu 10.04 Gets A Name: Canonical CEO Mark Shuttleworth via video announced Ubuntu 10.04’s code name is Lucid Lynx.

1. The Ubuntu 9.10 Compatibility Test: Will Ubuntu 9.10 work on your current notebook, netbook or PC? Canonical has developed diagnostics software (installed on a USB flash drive) that allows you to quickly discover whether your systems’ WiFi, sound, graphics and other variables will continue to work under Ubuntu 9.10.

It’s a slick little test that requires about 20 minutes of your time. I suspect Canonical will share more news about the testing software around the time of Ubuntu 9.10’s launch.

I’ll post more highlights from Atlanta Linux Fest in the days ahead.

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Canonical on July 31 will launch a so-called “Switch to Ubuntu” initiative — including support and migration services — to help individuals and small businesses that are “seeking cost-effective alternatives” to Mac OS X and Windows-based desktops. Here’s the scoop and early analysis.

Mark Shuttleworth has certainly caught my attention with the imminent announcement. Now my big question: Will Canonical’s hardware partners (especially Dell) and channel partners lend a hand with the effort?

Let’s start with details of the forthcoming announcement. In a draft press release viewed by WorksWithU, Canonical says its Desktop Support Services include three offerings: Starter, Advanced and Professional:

• The Starter Desktop Service supports installation, set-up and basic functionality – such as Internet, creating documents and playing music and videos.
• The Advanced Desktop Service is for more experienced users who need help migrating files and settings from a previously used operating system or assistance with desktop publishing and personnel accounting.
• The Professional Desktop Service is for the business user who use Ubuntu as their main environment. Installation support ensures the Ubuntu machine is set up on the corporate network and integrated into existing IT services. The Professional Desktop Service also helps set up desktop virtualization and ongoing support provides professional users with quicker access to support personnel.

You can find more details and pricing at https://shop.canonical.com/ and http://www.ubuntu.com/services.

First, a little praise for Canonical: Now is exactly the right time to promote Ubuntu to individuals and small business owners. The reason: We’re nearing another PC market inflection point, where millions of uses will be forced to decide whether to hold tight to Windows XP or leap to Windows 7. Converting some of those users from Windows to Ubuntu sounds like a logical, timely strategy.

At the same time, Canonical is working closely with IBM and Virtual Bridges to promote virtual Ubuntu desktops (running on Linux servers) as an alternative to Windows. So far, so good.

But I’m skeptical of the Mac-to-Ubuntu pitch. I don’t hear from many Apple fans who are desperate for low-cost alternatives to well-designed Mac hardware and software. But perhaps I’m not listening closely enough to the Mac camp. Also, perhaps there are PC users who are mulling a move to the Mac — but would instead embrace Ubuntu if they knew more about it.

The Bigger Issues

Now for my bigger questions.

• Is Canonical really in a position to support mass consumer and small business migrations to Ubuntu? I could be wrong but I think you need an army of foot soldiers — like the Best Buy Geek Squad in the United States — to assist customers with on-site support.
• Will Canonical extend the support services business model out to channel partners? Certainly, VARs and resellers and PC suppliers would be valuable partners during this Ubuntu migration push.

I’ll be sure to ask Canonical a few of the questions above in the days ahead.

And Let’s Not Forget…

Meanwhile, Canonical could have two aces up its sleeve:

1. Landscape: The remote management tool for Ubuntu-based notebooks, desktops and servers. I could be wrong but I suspect Canonical plans to somehow leverage Landscape in this migration and support effort. In theory, Canonical’s support engineers could leverage Landscape to move quickly from one small business desktop project to the next.

2. Ubuntu Local Community Teams: Now is an ideal time for Canonical to mobilize the LoCos with key messaging about Ubuntu for individuals and small businesses. It’s a tricky situation, of course, since Canonical is trying to profit from the customer migrations. And the LoCos aren’t really designed for money-generating migrations. But perhaps there’s a way to get the LoCos driving new Ubuntu recruits in Canonical’s direction.

Lots of questions… Once Canonical “officially” launches the service, support and migration services on July 31, I’ll start looking for more answers.

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