7. The business model

I would not try to analyze the business model behind open-source software like the web browser Mozilla Firefox (which receives a tiny amount each time a search on Google is made using its search box), nor of OpenOffice.org.

The open source operating systems are our main interest. Except for the *BSD family, whose members are either backed by 501(c)(3) non-profit organizations like The FreeBSD Foundation or the NetBSD Project, or the task of individuals like Theo de Raadt for OpenBSD and Matt Dillon for DragonFly BSD (by the way, your donations to either of them are appreciated), the 500+ Linux distributions fall roughly into two main categories: the vast majority of the distributions are made by the enthusiasts, for the enthusiasts, and a given number of them are mainstream distros, supposed to be trustworthy and polished enough to satisfy both the corporate-minded user and the home user.

As perceived by Christopher Negus in The Linux Bible 2007, the mainstream Linux distros are the following: Red Hat Enterprise Linux, Fedora Core, Debian, SUSE (SLED, SLES, openSUSE), KNOPPIX, Yellow Dog Linux, Gentoo, Slackware, Linspire and Freespire, Mandriva, Ubuntu (and Kubuntu, Edubuntu).

Out of them, having or trying to have a business model are: the Red Hat family, Novell's SUSE, Linspire, Mandriva, and Ubuntu.

From this short list, Ubuntu has the most controversial business model. Supported by the South-African billionaire Mark Shuttleworth and his company Canonical (headquartered in the Isle of Man, a fiscal heaven), Ubuntu is based on Debian (it has even taken some of the Debian's developers) and has gained an unexpected momentum especially because of the ShipIt program: free CDs were shipped free of charge to anyone wishing to receive them, worldwide.

As this was contested by some as creating an unfair competitive advantage for Ubuntu (as no other distro can afford such an enterprise), the overall outcome is positive for the mass penetration of Linux as a whole.

Nevertheless, despite its relatively recent offering of commercial support, and of the release of a Long-Term Supported version last year, there are no proofs of Canonical having a positive balance. Ubuntu is still relying on the wealth of a billionaire, which is hardly a business model.

Novell, Linspire and Mandriva had disappointing yearly and quarterly results lately, to the extent of my knowledge. As Mandriva's CEO François Bancilhon briefly explained before presenting Mandriva's business model, «Further to my knowledge, the only company making money is Red Hat.»

It is indeed very difficult to be profitable by selling support services associated with free, open-source software. The individual customer is unlikely to be willing to pay, and the corporate penetration of Linux is mediocre, especially in North America, where Red Hat would be the only Linux trusted for large-scale deployments, with a second choice being Novell.

Mandriva is left as the only purely European Linux vendor, struggling for profitability while the recent releases 2007 and 2007.1 Spring seem to be less buggy than usual.