Given much of the software in the Linux environment is free, it seems a natural corollary that a Linux desktop would not be a profitable proposition. But I contend that not only can Linux be a profitable business, but it will be. Making money selling a shrink-wrapped Linux OS, or ISV apps, I'd agree is a very tough gig. But a number of factors are aligning to make an entirely different kind of Linux desktop business a very viable proposition. The equation:
profitability = build-ecosystem + app-store + reoccurring-revenue
By "build ecosystem" I mean proliferate a given Linux distro as widely as possible. Give it away if needed. Do whatever it takes to get it on as many platforms as possible. It's seemingly antithetical, but one can not be concerned with making profit here, IMHO. Spend money to make this happen.
Build out a low-friction (as in brain dead easy to use) app-store, which users can click-and-buy to get new exciting apps. Put a lot of energy into this app-store -- it's the foundation of why your distro will be profitable. Build gravity and critical mass. Make developers eager to get their apps on your app-store. A percentage of apps being free is a good thing, on the app-store -- build critical mass like your life depends on it.
Reoccurring revenue. Linux vendors need to get out of the mentality of selling Linux. Rather, Linux can be a platform and a vehicle for generating after-market and reoccurring revenue. Some concrete examples follow.
Does this sound a lot like Google's Android model? Yep. And as far as reports go thus far, they don't even seem to be concerned with making money on the Android Market itself. Android is such a great vehicle for mobile search, location based services, content delivery etc -- apparently that's plenty. And btw, Android is founded on a Linux kernel, and there's a lot of buzz about it pushing up into netbooks and higher food-chain devices. I would think Android will end up being a highly profitable proposition for Google, just not in the conventional Linux distro business type of way. That's the mentality I believe will make a Linux desktop profitable.
As promised, here are some apps that would support a "back end" loaded Linux desktop business model:
- Backup to the cloud (user backup is a thing of the past)
- Pay-to-enable hardware features widget (take cut of enablement)
- Multi-media search redirects and sales (Boxee, Roku, ...)
- Personal navigation / mapping software & database (Garmin, ...)
- Smartphone companion software (e.g. Celio)
- Pre-installed Windows/Office VM
- Voice recognition software (plugs into a host of other potential services)
- Location based services redirects
- Android VM (revenue share with Google?)
- 3G service enablement, pay-as-you-go, or multi-vendor trials (kick-back)
- Other apps on store (take % for commercial apps)
Disclosure: no positions