Canonical posts a $21 million loss – is Ubuntu’s future doomed?

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The financial result for the Ubuntu maker is out. The company posted a loss of $21.3 million in fiscal year 2013, a straight fall of $10.2 million from the loss posted in fiscal year 2012, which was $11.1 million. The revenue earned in 2013 however, was $65.7 million, up from $56.8 million reported a year earlier.

These numbers are from the annual report which was made public by Canonical as required by UK law. You can view the full report in PFD here.  The report is a yearly one as Canonical does not file quarterly reports. The report is region specific and does not cover a breakdown of its worldwide operations. As reported by Ars, a Canonical employee said,  “the UK report is not a representation of the situation of Canonical across our global operations” .

Ubuntu’s future

Canonical, founded in 2004 by Mark Shuttleworth, has not gone past the red in the last 10 years. Ubuntu, which is a free and open source operating system does not earn Canonical any revenue unlike like Mac OSX or Windows. Canonical relies on support programs for Ubuntu called Ubuntu Advantage program to generate revenue.

Canonical continued to invest in building a world class global support operation to meet its corporate customers’ needs. Canonical’s Ubuntu Advantage program, which provides customers with first-rate support and systems management tools, plus the added benefit of legal assurances, continued its steady year-on-year growth.

However, there is a positive sign as over the last year, Ubuntu shipments have grown. One of the biggest revenue earners in the past year has been China.

Continuing Canonical’s existing relationships with a number of leading OEMs, Ubuntu has grown, both in number of units shipped and total revenue from professional engineering engagements. China was the stand out geographic region, accounting for the majority of global units shipped.

Canonical is said to be in investment mode at the moment and so Ubuntu’s future remains secure. Mark Shuttleworth remains committed to the OS. He had said in one of his earlier interviews that to keep Ubuntu running they would need to expand beyond the desktop. Canonical released Ubuntu Touch for smartphones and tablets last year and is still committed to develop it into a viable third option to iOS and Android.

I think the desktop on its own will die – Mark Shuttleworth

Canonical’s other revenue stream is via commercial consulting and support for cloud deployments. Even then, it is still centered around Ubuntu. So, focus on Ubuntu is of prime importance. Ubuntu received a big boost when Valve released its Steam Client for Linux last year. Valve also used Ubuntu as a reference OS for creating Steam OS before switching to Debian. The gaming company still recommends Ubuntu for regular Linux desktop use.

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Sayantan Das

Sayantan is a Sr. IT Consultant working at Srinsoft Technologies, Chennai. He has over six years of work experience with more than four years as a Linux System Administrator. He is a Linux enthusiast and a blogger. He is also a regular contributor to the Ubuntu Manual.

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