Wednesday, December 12, 2012

6 Ways Canonical Ubuntu Can Be Profitable Without Being Spyware

Richard Stallman makes a fairly airtight case that Ubuntu is spyware.  Here's the gist of it: 
When the user searches her own local files for a string using the Ubuntu desktop, Ubuntu sends that string to one of Canonical's servers. (Canonical is the company that develops Ubuntu.)
This is done so Ubuntu can return shopping results along with results from your local computer, and is an attempt to make money on commissions from Amazon.com.

I don't want to rehash the whole case here because Stallman's piece is concise, well written, and does a better job of describing the issue than I can.  Instead, I'll share my own opinions on:
  • Why Ubuntu's direction is danergous
  • Why Ubuntu's direction is stupid
  • 6 Ways Ubuntu Can Turn a Profit Without Being Spyware

Why Ubuntu's Direction is Dangerous

If someone searches for their "love letter to Anna" on their local computer, they don't expect this search to be sent to Amazon or Canonical. If they search for sensitive financial or health information, they expect their search (of their local machine) to remain private.

The option to "opt out" is not enough and the fear that an update may unwittingly opt you back in or subscribe you to some other privacy-killing advertising scheme is great enough for Ubuntu users to have the right to be concerned.

Why Ubuntu's Direction is Stupid

Canonical's spyware gambit is a punch in the gut to anyone who has advocated for free software and promoted Ubuntu to new users. For free software activists and GNU/Linux evangelists, handing out copies of an operating system that spies on people simply isn't cool, and explaining an opt-out procedure is impractical and insufficient.

Canonical's road the to profitability lies neither in spying on users, nor turning their strongest evangelists into their fiercest critics, nor some half-baked partnership with Amazon to make pennies via affiliate commissions.

6 Ways Canonical Ubuntu Can Turn a Profit Without Spying


#1.  Donation Reminder Applet

Install an applet by default that periodically pops up donation requests.  If this is kept to a minimum (every 1, 3, or 6 months), it won't be much of a bother to users.

If it's easy to deactivate it will be less of a bother.

If it couples the requests with some really cool tips or exciting news about developments at Canonical or with Ubuntu, it will give most people a warm and fuzzy feeling rather than a cold feeling.

This can get really creative too, for example by having a mechanism to crowdfund cool features that people vote on with their donations.

#2.  Premium Support

Canonical already offers Enterprise services and Consumer services.  Their writeup for their desktop support services (which are part of their consumer services) is a bit confusing to follow.  Straight-forward per incident or monthly support plans might get some traction with small businesses and home users who simply like having someone to call when they hit a roadblock.

I don't think Premium Support to home users is the holy grail for profitability, but it's worth exploring further.

#3.  Training and Certification

Canonical has a certification program for hardware vendors.  That's not what I'm referring to.  I mean training and certification for Ubuntu system administrators.  The job market is still struggling, especially for non-low wage work.  People are looking for an opportunity to retool and learn a new skill.  Why not offer the equivalant of a Microsoft Certified Engineer designation?

And if this gets traction, Ubuntu builds themselves a team of future sales people and technical evangelists in the process.  Sounds like a win-win for everyone.

#4.  Ubuntu One

OK, this is one that Canonical is already working on.  Ubuntu One is Canonical's cloud storage service.  It's similar to Dropbox, Box.com, Google Drive, SpiderOak and similar services.  I'm not certain which of these are profitable services, but there's plenty of money invested in these companies betting that recurring income on cloud disk space can be a profitable business.

How is Canonical fairing with their effort?  I'm not sure, but it's been pointed out that they flubbed badly by not providing support for non-Ubuntu distributions of GNU/Linux.  Can you believe that?  They have Windows, Mac, Android, and iPhone versions of Ubuntu One, but not Fedora or SuSE versions.  Unreal.  They are missing (perhaps missed sadly) the boat on being the defacto standard for cloud storage on GNU/Linux systems.  Here's hoping there's still a chance.

#5.  Game Servers

I'm not a gamer so I can't speak too deeply about this, but it occurs to me that with Valve Software's enthusiasm for the GNU/Linux platform, Ubuntu has viability as a gamer's operating system in the future.  Is there a market for fast, subscription-based game servers to host multiplayer games?

#6.  Partnering with Freedom Respecting Companies

If Canonical were partnering with a company less notorious than Amazon.com for destroying freedom, their spyware scheme would be equally bad.  The fact that Amazon.com is their partner in crime simply adds salt to the wound because Amazon.com is the largest purveyor of the digital book burning technology known as DRM (Digital Restrictions Management).

What if Ubuntu ditched Amazon.com and instead made a commitment to freedom by partnering with only those publishers that publish non-DRM books and other media?  I'm not aware of a popular store that gathers up all non-DRM books, movies, music and games in one convenient place.

Assuming Ubuntu built an opt-in "free shopping lens" that provided such as service, I think they'd have a winning product.  Since many Ubuntu users believe in "free as in freedom," they'd be putting the right product in front of the right audience at the right time.  What marketer in the world wouldn't take that trifecta opportunity?

5 comments:

  1. I have to agree with you that there are alternatives that ought to be explored. What more bothers me is that it is included and enabled by default. Couldn't they put a privacy notice in the install (with an option to disable) and or explain why it is there?

    At the same time many people new to FOSS don't understand that it sometimes needs financial support to survive/thrive. Also, it might make sense if when asking for support they explain why it is needed.

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  2. Canonical definitely needs to work on their marketing web site to make it clear exactly what they are and are not willing to do for individuals and enterprises that want to enter into a paid services contract with them.

    Unfortunately, all the strategies you named are probably not going to be the cash cow they need -- and Canonical probably already considered them and decided to take no action.

    1. Donation Reminder Applet
    -- This kind of thing is just probably their best low-friction strategy, but it's barely keeping Wikipedia afloat right now, and I gather Wikipedia has a lot more users and much lower operating costs.

    2. Premium Support
    -- This should probably be combined with #1. But can this work? Look at Apple: I think the biggest things contributing to the bottom line of their OS division are the big premium Apple charges on Apple hardware compared to what other hardware vendors charge, and actual warranties beyond 1 year of support. What's a good figure for these two income streams? ... Maybe $300 per user per year? Ubuntu isn't going to get that kind of money from subscriptions.

    3. Training and Certification
    -- The scuttlebutt I see (in Slashdot and elsewhere) is that managers and employees often don't consider certifications to be worth much. Actual apprenticeship of one form or another is what managers want to see. Is there money to be made by Canonical in fostering apprenticeships and internships?

    4. Ubuntu One
    -- This ship has sailed, and Dropbox is the only winner there can be if there is one. What do MOST users want? a) Access to online apps whose storage method is completely outside the user's sphere of influence and understanding; and b) Access to files in the form of filesystem folders and blobs -- copyable, loseable, and syncable. Users can get this without Ubuntu One already, are not willing to learn a new system, and don't believe you when you tell them Ubuntu One is better even if you only use computers running Ubuntu.

    5. Game Servers
    -- Niche market. 'nuff said.

    6. Partnering with Freedom-Respecting Companies
    -- This won't make Canonical a lot of money but it would contribute greatly to the "Ubuntu" philosophy of Ubuntu. People doing good complementary work should call out and promote each other!

    All the money in the IT industry to be made by an OS company is in enterprise desktop and server support contracts, and grid computing. There's probably a little room in both markets for Canonical, but I'm not sure how they can get there.

    Sorry to sound so negative. Anyone else have any armchair quarterback ideas? :^)

    (Also, oh gods when did I start thinking like a manager?! I'm a developer!)

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  3. On the enterprise desktop support contracts idea... I wonder if Canonical can afford to wait out the eventual implosion of Windows as a desktop platform? They're back in another repeat of the Windows 95, ME, Vista cycle. At the same time, people are weaning themselves off of "Desktop" computing and finding a rich ecosystem of client OSes and online services. It won't be long before Wal Mart is loudly proclaiming a particular OSS laptop of theirs can do anything you want a laptop to do because *Windows* is itself irrelevant.

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  4. I wouldn't dismiss the power of donations in this context. MediaGoblin raised $43K this fall in about a month [1]. The software is essentially pre-alpha, and has a negligible userbase. Ubuntu has a userbase of about 20 million and if done intelligently, they have way more opportunities to leverage that userbase for donations.

    As for the Wikimedia Foundation (Wikipedia.org), it's actually a good comparison with Canonical. Wikimedia Foundation has revenues of $46MM annually [2], whereas Canonical's revenue is in the $30MM range based on 2009 numbers [3]. I'm assuming in both cases that revenue and operating costs are not that far off. Wikimedia Foundation's 2012 fundraiser was only 16 days, ran in only 8 countries and was a success.

    [1] http://mediagoblin.org/pages/campaign.html
    [2] http://go.bloomberg.com/tech-deals/2012-12-11-wikipedia-edits-fundraising-strategy/
    [3] http://en.wikipedia.org/wiki/Canonical_Ltd.

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