Lesley Stones
29 October 2008
Johannesburg — SOUTH African internet billionaire Mark Shuttleworth has enough cash to pump into his software company, Canonical, saying he is being careful with his pennies but is willing to continue supporting a good investment.
Shuttleworth founded Canonical in 2004 to develop free software for companies and private users around the world. He committed an initial $10m, despite admitting he was not sure whether giving away its software could ever be commercially viable.
This week, Shuttleworth held a press conference confirming that Canonical was still not profitable, but making it clear that he was happy to keep supporting it as a philanthropic venture. His private resources come from the $575m that he earned in 1999 by selling Thawte, the Cape-based digital security company he founded.
Canonical develops the Ubuntu operating system using open-source technology, allowing anyone to modify it or translate it into different languages.
That makes it particularly appealing to emerging nations which find the licence fees for big-brand software packages prohibitive.
Reporting on the conference, the online news site The Register quoted Shuttleworth as saying: "We continue to require investment. I can continue to be careful with my pennies as I make what I consider to be a good investment."
Canonical has more than 200 employees in Europe, the US and Taiwan but has not yet recorded a positive cash flow even though about 8-million people use its software.
Asked for an accurate figure on how many people use it, Shuttleworth replied: "We actually have no idea."
Research house IDC ran a survey last year showing that 20% of large US companies had Ubuntu installed, and IDC estimates that Ubuntu holds a 3% share of the market for server operating systems.
Canonical turns over "several million dollars" a year from selling support and related services for Ubuntu, but Shuttleworth said he had no objection to funding it for the next three to five years.
The company could become cash-positive in two years, but it would probably take longer as more investment was needed to make Ubuntu more pervasive.
Asked whether anyone could make money from supplying free software, Shuttleworth said they could not, "and that is a good thing". The company gives away the software and makes money from technical support.
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