How Does Ubuntu Make Money? | Explained

Ubuntu, a widely used Linux distribution, is developed and maintained by Canonical Ltd. The company has implemented several strategies to generate revenue, ensuring the ongoing development and maintenance of Ubuntu.

History of Ubuntu

Ubuntu, a renowned Linux distribution, has a rich history that dates back to its inception in 2004. The creation of Ubuntu was primarily driven by Mark Shuttleworth, a South African-British developer and entrepreneur. Shuttleworth envisioned a more user-friendly Linux distribution compared to the existing options, particularly Debian, which enjoyed popularity among Linux enthusiasts at the time.

Origins and Development

  • Foundation by Mark Shuttleworth: In 2004, Shuttleworth, motivated to develop a more accessible Linux distribution, assembled a team of developers, many of whom were part of the Debian community. This team embarked on a mission to create an easy-to-use Linux desktop, focusing on user-friendliness and accessibility.
  • Debian’s Influence: Ubuntu’s source code is derived from Debian, a much older and well-established Linux distribution. Debian’s name itself is a portmanteau of the names Debra and Ian, the individuals who started it. Ubuntu’s development built upon this foundation, aiming to create a more streamlined and approachable version of Debian.
  • Naming and Philosophy: The name “Ubuntu” is inspired by the Nguni philosophy, translating to “humanity to others,” and carries the connotation of “I am what I am because of who we all are.” This naming reflects the community-driven and inclusive ethos that Ubuntu has embodied since its inception.
  • Initial Release and Growth: The first version of Ubuntu, Ubuntu 4.10 (Warty Warthog), was released on October 20, 2004. This initial release laid the groundwork for a new approach to Linux distribution, characterized by regular updates and extended support. Canonical, the company founded by Shuttleworth to support Ubuntu, planned for a new release every six months, with each version receiving eighteen months of support.

Impact and Community

  • Popularity and Adoption: Since its first release, Ubuntu has rapidly grown to become one of the most popular Linux distributions for general purposes. Its ease of use, robust community support, and regular updates have made it a favored choice for both new and experienced Linux users.
  • Community Support: Ubuntu’s success is significantly attributed to its large and active online communities, such as Ask Ubuntu. These communities provide support, share knowledge, and contribute to the ongoing development and improvement of the distribution.

Ubuntu’s history is not just a story of software development but also a narrative of community building and the democratization of technology. By focusing on accessibility and ease of use, Ubuntu has played a pivotal role in making Linux more approachable to a broader audience and has continued to innovate and evolve over the years.

How Does Ubuntu Make Money?

Here’s an overview of how Ubuntu makes money:

Support Services

Canonical offers paid professional support services, similar to what other companies like Red Hat Inc. provide to their corporate customers.

This stream of revenue is a significant part of Canonical’s business model, as it attracts corporate clients who require reliable and professional support for their Ubuntu installations.

Contracting Services

Ubuntu also generates income through various contracting services. These services often involve customization and specialized software development for businesses and other organizations that use Ubuntu as their operating system of choice.

Ubuntu Software Centre

The Ubuntu Software Centre plays a crucial role in Canonical’s revenue model. It is a platform where users can purchase software, and Canonical earns a portion of the revenue from these sales.

This marketplace approach allows software developers to distribute their products to a wide Ubuntu user base while providing Canonical with a revenue stream.

Launchpad is another source of income for Canonical. It is a software collaboration platform that offers various services for software developers, such as bug tracking, code hosting, and building.

While many of its services are free, certain premium features may contribute to Canonical’s revenue.

Amazon Referrals

Canonical has partnerships, such as with Amazon, where it earns referral fees. When Ubuntu users purchase products through these referral links, a portion of the sale goes to Canonical.


Ubuntu allows users to donate to the project. This funding model is transparent, with all funding and expenses published, ensuring donors know exactly how their contributions are used. The Canonical Community Team reviews donation requests and releases funds for beneficial projects.

Business Servers and Landscape Software

Canonical profits from providing services and software for business servers. Their product, Landscape, is an administration tool that helps businesses manage their Ubuntu instances, offering both efficiency and ease of management.

Selling Software on Their Software Center

Apart from the Ubuntu Software Centre’s third-party software sales, Canonical also develops and sells its software, contributing to its revenue.

In summary, Canonical’s multifaceted approach to monetizing Ubuntu includes offering professional support services, running a software marketplace, benefiting from partnerships and referrals, accepting donations, and selling proprietary software and services. This diversified revenue stream supports the continuous development and maintenance of Ubuntu, ensuring its longevity and relevance in the market.

How Does Ubuntu Work?

How Does Ubuntu Work?

Ubuntu is a Linux distribution, which means it is an operating system built on the Linux kernel. The way Ubuntu works can be understood by looking at its core components, user interface, package management system, and the underlying philosophy that drives its design and functionality.

Core Components

  • Linux Kernel: At the heart of Ubuntu is the Linux kernel, which is the core interface between the computer’s hardware and its processes. It manages system resources and communication between hardware and software.
  • GNU Tools: Alongside the kernel, Ubuntu incorporates a variety of GNU tools. These tools provide essential functions like file management, system navigation, and software compilation.
  • Desktop Environment: Ubuntu uses a default desktop environment called GNOME (previously Unity until 2017). This environment offers a graphical user interface (GUI) that is intuitive and user-friendly, making it accessible for users transitioning from other operating systems like Windows or macOS.

Package Management

  • APT and Software Center: Ubuntu uses Advanced Package Tool (APT) for package management. It allows users to install, update, and remove software through command-line instructions. Additionally, the Ubuntu Software Center provides a more user-friendly, GUI-based approach to software management.
  • Repositories: Software in Ubuntu is organized into repositories – collections of software that are stored on servers and can be accessed and installed on Ubuntu systems. These repositories ensure that the software is secure and compatible with Ubuntu.

System Architecture

  • File System Structure: Ubuntu, like other Linux distributions, follows a hierarchical file system structure. This structure is different from Windows but offers greater control and flexibility in managing system files and user data.
  • User Permissions and Security: Ubuntu employs a robust security model, often using user permission settings to prevent unauthorized access to system files and resources. The use of “sudo” (superuser do) for administrative tasks is a core security feature in Ubuntu.

Community and Open Source Philosophy

  • Open Source Software: Ubuntu is built on the principles of open-source software, meaning its source code is freely available for anyone to use, modify, and distribute. This philosophy encourages community involvement and collaboration in the development process.
  • Regular Updates and LTS Releases: Ubuntu releases regular updates and has a specific type of release known as Long Term Support (LTS) versions. LTS versions are released every two years and receive support and updates for five years, making them stable and reliable for longer-term use.

User Experience

  • Accessibility and Customization: Ubuntu is designed to be accessible to both beginners and experienced users. It offers extensive customization options, allowing users to modify the look, feel, and functionality of the system according to their preferences.
  • Software and Application Ecosystem: The Ubuntu ecosystem includes a wide range of applications, from office suites and web browsers to development tools and multimedia software, catering to the diverse needs of its users.

In conclusion, Ubuntu works by combining the Linux kernel with a set of GNU tools and a user-friendly desktop environment. Its package management system simplifies software installation and maintenance, while its open-source nature fosters a collaborative and inclusive community. Ubuntu’s structure and philosophy make it a versatile and secure operating system for a wide range of users, from casual desktop users to developers and professionals.

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Ubuntu Funding, Revenue Generation, and Valuation

Ubuntu Funding, Revenue Generation, and Valuation

Canonical Ltd., the company behind Ubuntu, has established a strong financial foundation over the years. Here’s an overview of Canonical’s funding, revenue generation, and valuation:


  • Crowdfunding: Canonical has raised a significant amount of funding through crowdfunding. One notable instance was a product crowdfunding round on August 22, 2013, where they raised $12.8 million. This approach to funding aligns with Canonical’s community-driven philosophy, allowing the public to directly contribute to the development of Ubuntu and related products​​.

Revenue Generation

  • Annual Revenue: In 2021, Canonical recorded a revenue of approximately $175 million. This impressive figure demonstrates the company’s successful monetization strategies, including support services, software sales, and other business ventures related to Ubuntu​​​​.
  • Channel Business Growth: In 2022, Canonical announced a significant growth in its Channel/Reseller Program. The company managed to double its revenue from this program, grow its active reseller base by more than 50%, and increase the overall channel business by 70%. This growth is indicative of the expanding market reach and business effectiveness of Canonical​​.

Valuation and Future Prospects

  • Estimated Revenue Range: According to Owler, Canonical’s estimated annual revenue falls within the range of $100-500 million. This range suggests a healthy and growing financial status for the company, with a broad revenue base​​.
  • IPO Plans: There are indications that Canonical may go public in 2023. An Initial Public Offering (IPO) would mark a significant milestone for the company, potentially increasing its financial resources and market presence. This move is reflective of Canonical’s growth and the increasing demand for its products and services​​.

In summary, Canonical’s financial health is robust, characterized by substantial revenue generation, impressive growth in its business channels, and a strong funding background. The company’s potential move to go public in 2023 underscores its success and the growing market interest in Ubuntu and related products. Canonical’s financial strategies and achievements not only ensure the sustainability of Ubuntu but also reflect the viability of open-source software in the global market.

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