In Part I of our multi-part series of discussions with Canonical CEO and Ubuntu founder Mark Shuttleworth, Shuttleworth covered the delay in the release of Dapper, and something of a history of the open source and free software movements. In Part II, Shuttleworth spoke specifically about Dapper in the Enterprise, and a bit about how Canonical will make money on Ubuntu. In this final installment, we delve into the geographics of Ubuntu’s appeal; the investment by Shuttleworth’s venture Capital fund, HBD in ImpiLinux, and ever so gingerly broach the religious topic of KDE versus Gnome — not just as the Linux desktop, but as Mark Shuttleworth’s Ubuntu desktop.

Shuttleworth spoke at length with The 451 Group, and his remarks are presented here, along with insight and commentary from 451 Group analysts who cover the worlds of open source and enterprise software. These include Rachel Chalmers, Martin Schneider, Raven Zachary and me, Nick Selby.

Geographical appeal of professional services
In terms of professional services and Ubuntu adoption, we’d have thought that demand for would be in greenfield markets, predominantly in Africa, eastern Europe, Asia and South America. But we’re very curious, of course, about adoption in the United States, Germany and the UK. We’re particularly interested in takeup in the US, for its sheer market size of course, and Germany, which has been a real leader in open source, free software and Linux adoption. In fact German enterprises are so inured to the switch to Linux and we’d think that if one can make it there as a professional services organization, one might make it anywhere.

Mark Shuttleworth: Well, the US is quite strong in terms of general Ubuntu uptake; about 15% of our overall footprint is in the US, which is very strong for a particular country. But it does suggest that Ubuntu is a more global project than most sorts of new technology companies, which tend to focus on the US as an early adopter marketplace. Very strong markets for Ubuntu are in Europe, where we have had a large early-adopter presence and are now starting to see more formal ecosystem emerge.

And in South America, which has long been an early adopter of open source and Linux in general, they now see Ubuntu as the right answer on the desktop from a free software point of view; and now more and more out in Asia, where the emphasis is a little different because of the kind of consumer electronics an PC industry expertise out there. The emphasis in Asia seems to be more in pre-installation, and certification of the OS on desktop hardware that’s kind of cutting edge, which is stuff that we really haven’t had to deal with before.

Nick Selby: It’s interesting to hear that 15% of Ubuntu’s takeup is in the US – that surprises me a bit, because of the overall international adoption numbers we get from sites like DistroWatch, as well as my experiences in Germany. More interesting to me though are the differences between the US and Asia in terms of the pre-installation of Linux on hardware. That’s a business I would have hoped to have taken off in the US more than It has, and even with the success (by its own standards) of Linspire selling pre-configured Linux hardware, it really hasn’t caught on. I wonder why. Perhaps it’s because of the fact that the vendors engaging in it don’t have the bandwidth or the resources to really deliver on the promise of pre-configured Linux that just works out of the box.

Raven Zachary: 15% for the US doesn’t seem too out of line when you consider the data on population and computer ownership by country. The US accounts for about 5% of the human population, but is the birthplace of the personal computer and has high levels of discretionary income. If you take a look at NationMaster, the US ranks #2 in personal computers per capita (San Marino, a country with less than 30,000 people, ranks #1). However, when you think of the US as but one of 191 or so countries, then yes, 15% does seem high.

ImpiLinux and HBD
Shuttleworth’s venture capital fund, HBD (it stands for Here Be Dragons, an allusion to the scary parts at the edges of old map coverage, which pretty much sums up Shuttleworth’s Avast! attitude towards innovation) has, among other investments, invested in ImpiLinux, a localized African-language version of Ubuntu. We wondered whether the demand for this software is strong enough that it would support that kind of commercial development, say, of localized Spanish or Asian language versions of Ubuntu?

Mark Shuttleworth: Our strategy with Ubuntu is very much to allow local, regional groups to customize it and produce something that is strong locally. In the case of Impi there’s a strong commercial imperative there, and that is related to the need for a local company which can provide services and support at a layer above what we would typically provide globally with Ubuntu. So that’s almost an orthogonal investment to the overall picture of Canonical with Ubuntu; Canonical’s role is to create a global ecosystem and to make that ecosystem self-sustaining by keeping the cost of production as low as possible and keeping the results, the product, effectively as general as possible. Whereas in the case of Impi there’s a very specific opportunity in South Africa, which required a vehicle dedicated to it. It is not part of the broader Canonical work.

[B]oth [ImpiLunux and Ubuntu] are driven by my belief that free software and open source are going to be major forces over the next ten years and so investments in both of those are interesting, but they have quite different strategic perspectives and viewpoints and approaches. Impi focuses on producing integrated solutions which include a much greater degree of diversity of proprietary software, and meets the needs of people who need something right now, where as Ubuntu is more about creating a universal platform, which is spreading very quickly and which will become pervasive over the next ten years.

Martin Schneider What really jumps out at me about this is how a lot of the commercial development around Impi is mimicking (in an interesting manner) some business plans of very large proprietary software companies. For example, a company like Sage Group has a single centralized development team, but fosters and supports a very large international reseller base that does most of the localization work. This typical 100% indirect model has worked for several open source firms as well – Compiere being a fine example.

So really, this model is not very different from existing ones, save for the costs are much less. But what is interesting is that a venture-type company can be the lead (given the open source development happening outside traditional “walls” of a vendor organization) of the project, not a vendor per se, and thus the amount of management and other overhead is less, and the company can focus more on fostering product development communities and identifying new markets to saturate.

Nick Selby: ‘Spreading very quickly’ is a fairly significant understatement: the initial take up, at least, of Ubuntu has been extremely high, with Ubuntu downloads dominating by insane margins the downloads from DistroWatch. Ubuntu has by most objective measures become the world’s most popular non-enterprise Linux distribution. Looking at the kind of innovation going on in the Ubuntu community, we wonder whether Canonical is demonstrating that philanthropy is the better fuel to support open source development — better even than commercial open source development, like that of, say, Red Hat. This is not, of course, to suggest that we think Ubuntu or Canonical is going to be causing panic in the boardroom of Red Hat any time soon.

Mark Shutleworth: I’d be very hesitant to jump that final conclusion. I certainly think that we have shown that it is possible to unleash a lot of constructive energy and to focus that energy and get good results in a relatively short period of time. I certainly also think that there is room for the Red Hat style approach where you identify a very specific set of services and features and functionality, a very specific market that you want to service, and you build an organization optimized for doing just that. So I think Red Hat has certainly carved out a sustainable, positive constructive place for itself.

We certainly have benefited by taking a quite an open and generous view in terms of intellectual property in terms of the way we organize and control our infrastructure by relinquishing a certain amount of control over exactly what goes in and what doesn’t go in and when it ships and so on. By acknowledging that we are part of a broader community, we get a lot more willingness from people who want to join that community and jump in and contribute their ideas and their work. To the extent that you can attract those kinds of contributions and turn them into something compelling that’s certainly a very exciting sort of model.

Rachel Chalmers: I’d love to know more about HBD’s other investments, and the software ecology in South Africa more generally… How does it compare with other regional hubs, like Ireland, Israel, Bangalore? Also about the relationship between Shuttleworth, HBD, Canonical and the Shuttleworth Foundation.

Mark Shuttleworth Well, HBD is a venture capital group based out of South Africa, which finds interesting companies in South Africa that have an interesting story and a potential for growth. HBD venture capital is largely run by a team out of Cape Town with relatively little oversight from me in terms of what they should be investing in or what they shouldn’t. The foundation, which is the vehicle that does a lot of the education- oriented work that I do, that gets more direct input from me.

I tend to find that I can be most productive if I focus on one or two key areas at a time, and over the last year or two Ubuntu has been the primary focus of my energy. That means that the venture capital group and the foundation have to a certain extent had more leeway to pursue what they find particularly interesting.

You’re touching on a very interesting subject – and that is, what is the relationship between a company like Canonical and a broader, free software project like Ubuntu? One of the things that we have been most careful to do has been to maintain as clear as possible a line of separation between those two. And to recognize that there definitely is room to let go of the certain amount of control of the underlying platform, in favor of broadening the pool of participation effectively. Because something like Ubuntu is better if it is something where other companies, other individuals, feel that they have a real, meaningful ability to come in and contribute. They get to shape it, they get to help set the priorities, and help make it better for themselves – and in the process, they make it better for us and for all of the users of it.

Raven Zachary: Maintaining a clear line of separation between Canonical and Ubuntu is fairly easy right now, with the bulk of the activity occurring on the Ubuntu side. How clear will the line of separation be once Canonical is generating more than $50 millon U.S. per year in services revenue?

One of the more heated debates in the Linux world has been over the relative merits of the most popular Linux desktop managers, Gnome and KDE. Ubuntu was developed with Gnome as its primary desktop environment, but Kubuntu quickly sought parity. With ordinary punters and Linux luminaries trading shots on the subject – none other than Linus Torvalds weighed in, on KDE’s side – we wondered whether we or anyone should read any political statement into the recent reports that Shuttleworth had switched his main desktop to KDE from Gnome?

Mark Shuttleworth: No, not at all. I need to maintain a fairly even perspective across the project, and we do have a lot of KDE users in the broader project and in the community as a whole. So I tend to run both.

My laptop runs a Gnome-based environment, the traditional Ubuntu environment, and that’s my primary computing environment. My desktop, which I use for development when I’m at home basically, that’s a KDE-based desktop, so I use Kubuntu on that.

And I’m also running Xubuntu ['ZOO-boon-too'], which is an xfce-based environment, but only on a specialist computer where it particularly suits the hardware and the application that I have there.

We see the Ubuntu project as kind of an umbrella for specialty groups which have more specialist focus and they each produce a version or a flavor that’s optimized either for a country, or for a certain type of desktop environment, so I need to create space for all those different groups, but there’s no suggestion that we would shift the primary focus of what we do from one desktop environment to another.

The 451 Group was delighted to have the opportunity to present Mark’s comments here (we will post a mp3 recording of his comments in the near future, for those of you curious about what Mark sounds like). The 451 CAOS Blog – Commercial Adoption of Open Source – covers the business of open source each business day. We encourage your comments and questions.

The 451 Group is an independent technology industry analyst company focused on the business of enterprise IT innovation. The company’s analysts provide critical and timely insight into the market and competitive dynamics of innovation in emerging technology segments. Clients of the company – at vendor, investor, service-provider and end-user organizations – rely on 451 insight to support both strategic and tactical decision-making for competitive advantage.