Has Canonical licensed away its business model?

By announcing that it has open-sourced its Launchpad project under the Affero GPL version 3, a year after rumors swirled that it would, has Canonical licensed away one of its best revenue opportunities?

Roughly two years ago, I walked up London's High Road from Seven Sisters Tube Station with Mark Shuttleworth, founder of Canonical and the popular Ubuntu Linux distribution. Mark and I talked about a range of things, but one of the things that particularly caught my attention was Launchpad, a collaboration and hosting platform for open-source projects that makes it easy to track code, ideas, and other things across projects.

Then, as now, Launchpad struck me as a fertile field for Canonical to discover a scalable, winning business model to support Ubuntu development. In fact, I remember a long conversation with open-source guru Larry Augustin about Launchpad. Augustin felt that there was a great business lurking in Launchpad.

I agreed.

While I can see how "opening up Launchpad gives the free-software world the beginnings of an open, programmatic interface to its own infrastructure," as Canonical speculates, I'm struggling to see how it helps Canonical make money. Any chance of directly monetizing Launchpad is effectively gone now.

That, of course, may not be the point. Canonical has been experimenting with other models, including hosted services that may well be augmented by this move.

As RedMonk analyst James Governor suggests, "(It may be) possible to make money as a tools company, without owning the runtime, if you offer hosting for the apps. IDE (integrated development environment) + cloud = dollars." Open source may help to make Launchpad more widely used, which, in turn, better positions it to be a Canonical-sponsored on-ramp to the Canonical-monetized cloud.

Not a bad idea. (Certainly better than the apperi-sponsored Ubuntu application store, as reported by The VAR Guy.)

It does suggest, however, that Canonical may be placing a lot of eggs in the cloud basket, a basket that has yet to prove that it can deliver solid, consistent returns to software companies. It comes with its own baggage, as Jonathan Zittrain writes).

Time will tell if the cloud can feed Canonical's employees. But Shuttleworth isn't the sort of person to do something just because all the "in" kids are open-sourcing these days. Licensing Launchpad under the AGPL version 3 is a calculated move. We just don't know what the calculus will yield quite yet.

Follow me on Twitter @mjasay.

[Police_States_of_America]

cant please the linux crowd unless EVERYTHING is open source, i suppose. these kinds of things prevent profits and ultimately money to pour back into distro development.

[Random_Walk]

Not necessarily (see also the NVIDIA driver package) - I'm willing to wager that very few Linux users really care about ancillary parts being open or closed, so long as there is sufficient competition for the part in question.

[ArtInvent]

Honestly, how much money could Launchpad actually make? Some, yes, but it would be pretty limited. I think Canonical did the math and decided developer good will and complete absence of friction in growing Launchpad was a bigger win.

[jspaleta]

Is launchpad a money maker? That's impossible to know without Canonical releasing more financials. Is anything Canonical does a money-maker? All we know for sure is that Canonical's revenue is southward of 30 million annually. We don't know which specific revenue stream if any are doing relatively well. Is any of that revenue derived explicitly from commercial contracts for Launchpad services? Canonical's never released any sort of sales numbers so we don't know. Or is Launchpad strictly a value-add which helps Canonical execute OEM development projects which they are getting paid for?

You take a close look and there are several proprietary OEM projects with closed source trees in Launchpad. I would hazard a guess that those OEM servicing projects are bringing in more revenue than Landscape...and those OEM development services make heavy use of the Launchpad infrastructure that Canonical controls. So Launchpad could very well be a deep part of Canonical's most reliable revenue stream..being paid to build proprietary software by OEM partners.

-jef

[fazalmajid]

Perhaps they felt it was the only way to respond to GitHub (SourceForge has long ceased to be relevant, even if it still has a huge legacy installed base).