Developer of a popular Linux distribution is planning an IPO and tackling cloud solutions.

Developer of a popular Linux distribution is planning an IPO and tackling cloud solutions.

Canonical, the Ubuntu developer, is preparing for a public offering of shares. She plans to develop in the field of cloud computing.

/photo NASA (PD) - Mark Shuttleworth on the ISS

Talk about the Canonical IPO comes from 2015 - then the company's founder Mark Shuttleworth said about a possible public offering of shares. The goal of the IPO is to raise funds to help Canonical develop products for the cloud and enterprise IoT systems.

For example, the company plans to pay more attention to the LXD and OS containerization technologies for Ubuntu Core IoT gadgets. This choice of direction of development is determined by the business model of the company. Canonical does not sell licenses and earns on B2B services.

Canonical began preparing for an IPO in 2017. To become more attractive to investors, the company stopped developing unprofitable products - the Unity desktop shell and the mobile OS Ubuntu Phone. Canonical also seeks to increase annual revenue from $ 110 to $ 200 million. Therefore, now the company is trying to attract more corporate customers. For this was presented a new package of services - Ubuntu Advantage for Infrastructure.

Canonical does not require a separate fee for servicing parts of the infrastructure based on different technologies - OpenStack, Ceph, Kubernetes and Linux. The cost of services is calculated based on the number of servers or virtual machines, and the package includes technical and legal support. According to the calculations of Canonical, this approach will help their customers to save.

Another step in attracting customers was the extension of Ubuntu support from five to ten years. According to Mark Shuttleworth, the longer life cycle of the operating system is important for financial institutions and telecoms, which, in comparison with other companies, are less likely to switch to new versions of the OS and IT services.

Canonical actions helped make Ubuntu more popular among such "conservative" organizations and strengthen the company's position in the cloud-based solutions market. The efforts of the company may pay off soon. There is a possibility that the public offering of Canonical shares will take place already in 2020.

What's up with this market?

Analysts consider that with the transition to Canonical's public status can become a full-fledged competitor to Red Hat. The latter developed and implemented the principles of monetization of open source technologies, which Canonical is now using.

For a long time, other companies with a similar business model could not grow to the size of Red Hat. In terms of scale, it significantly overtakes Canonical - the Red Hat annual profit alone exceeds the entire revenue of the Ubuntu developer company. However, experts believe that IPO funds will help Canonical grow to the size of a rival company.

The Ubuntu developer has an advantage over Red Hat. Canonical is an independent company that gives corporate customers the opportunity to choose any cloud environment for deploying applications. Red Hat will soon become part of IBM. While the IT giant promises to maintain the independence of its subsidiary, it is likely that Red Hat will promote the IBM public cloud.

/photo Bran Sorem ( CC BY )

It is also expected that the IPO will help Canonical gain a foothold in the market for IoT and peripheral (edge) computing. The company is developing new products based on Ubuntu, which will help to combine edge devices with cloud environments into one hybrid system. While this direction does not bring profit to Canonical, however Shuttleworth considers his promising future for the company Funds for IPO will help develop technologies for IoT - Canonical will be able to allocate more resources for the development of edge products.

Who else is going to IPO

In April 2018, Pivotal placed part of its shares on the exchange. It develops the Cloud Foundry platform for deploying and monitoring applications in public and private cloud environments. Most of Pivotal is owned by Dell: the IT giant owns 67% of the company's shares and a decisive role in decision making.

Placing securities on the exchange was supposed to help Pivotal expand its presence in the cloud services market. planned to spend the proceeds to develop new products and attraction as clients of the largest world companies. Pivotal’s expectations came true - after selling the shares, it managed to increase revenue and the number of corporate customers.

Another IPO on the market should take place soon. In April of this year, the application for placement of shares was submitted by the startup Fastly, which offers a platform for peripheral computing and a load balancing solution for data centers. The company will spend the funds from the IPO to promote edge computing in the market. Fastly hopes that investment will help it become a more visible player in the data center services industry.

What's next

According to multi-cloud solutions and systems for peripheral computing.

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Source text: Developer of a popular Linux distribution is planning an IPO and tackling cloud solutions.