Canonical starts IPO path

Canonical founder Mark Shuttleworth reveals the reason for recent changes with the powerhouse Ubuntu Linux company were to prepare it for an IPO.

At OpenStack Summit, Canonical and Ubuntu founder Mark Shuttleworth revealed in an interview that the recent changes in the Linux and cloud power were to ready Canonical for an IPO.

In early April, Shuttleworth announced Ubuntu Linux was ending its " investment in Unity8, the phone and convergence shell." Ubuntu had long been a cloud power, and it's been building its Internet of Things (IoT) reputation. Soon thereafter, Canonical CEO Jane Silber announced she was stepping down and that Shuttleworth would return as CEO.

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These moves were all being made to start Canonical on its road to an IPO. Canonical has been doing well. As Silber said recently, " Ubuntu has industry adoption that is both broad and deep. Companies such as Walmart, Netflix, and eBay build their infrastructure on Ubuntu. Telcos such as Deutsche Telekom, AT&T, and NTT build their next-generation telecom capabilities on Ubuntu."

Canonical was doing well with Ubuntu and cloud and container-related technologies, such as Juju, LXD, and Metal-as-a-Service (MaaS). In addition, its OpenStack and Kubernetes software stacks, according to Shuttleworth, are growing by leaps and bounds on both the public and private cloud.

Shuttleworth said "in the last year, Ubuntu cloud growth had been 70 percent on the private cloud and 90 percent on the public cloud." In particular, "Ubuntu has been gaining more customers on the big five public clouds."

What hadn't succeeded was Canonical's attempt to make Unity the universal interface for desktops, tablets, and smartphones. Shuttleworth was personally invested in this project, but at day's end, it wasn't getting enough adoption to make it profitable.

Ubuntu's Mark Shuttleworth

Mark Shuttleworth is going to be taking Canonical, Ubuntu Linux's parent company. public.

So, Shuttleworth said with regret, Unity had to be dropped. Still, he continued, "Canonical will do everything we can to support the community Unity developers. We will make their lives easier." As for Canonical's decision to support GNOME as its default desktop, "We're no longer trying to create our own interface. We'll support the existing ones -- KDE, MATE, Lxde -- but while all these desktops are great, GNOME presents the least change for users."

This move also means Canonical will devote more of its time to "putting the company on the path to a IPO. We must figure out what steps we need to take moving forward." That means focusing on Canonical's most profitable lines. Specifically, "Ubuntu will never die. Ubuntu is the default platform on cloud computing. Juju, MaaS, and OpenStack are nearly unstoppable. We need to work out more of our IoT path. At the same time, we had to cut out those parts that couldn't meet an investors' needs. The immediate work is get all parts of the company profitable."

This isn't the first time Shuttleworth has considered an IPO for his privately-owned company. He considered it in 2015 as well. The difference is now he's removed the parts of the company -- Unity and related issues -- that were costing Canonical over eight figures a year. Its OpenStack cloud division has been profitable, said Shuttleworth, since 2015.

Still, there is "no timeline for the IPO." First, Shuttleworth wants all parts of the slimmed down Canonical to be profitable. Then "we will take a round of investment." After that, Canonical will go public.

How long will this take? Shuttleworth only said it "will be sooner rather than later."

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