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<img src="http://parcom.pro-networks.org/images/unbuntu.jpg" align="right" alt="Canonical seeks profit from free Ubuntu">Canonical seeks profit from free Ubuntu
By Stephen Shankland
October 6, 2006, 4:00 AM PT

If you want to understand Canonical's Linux business strategy, think Red Hat 2000. Canonical is the 65-employee start-up behind a popular version of Linux called "Ubuntu". The company is betting that it can win a place in the market using a strategy that dominant Linux seller Red Hat has dropped.

Red Hat offers two versions of Linux: Fedora Core and Red Hat Enterprise Linux. Fedora Core is free, but relatively untested and unsupported by Red Hat, while RHEL is supported and certified, but must be purchased. With Canonical's Ubuntu, however, the free and supported versions are identical--the approach Red Hat abandoned in 2003.

"We believe that Ubuntu should be free to everyone--not just a trial version, but our very best version," said Christopher Kenyon, Canonical's business development manager. The South African company even ships free CDs anywhere in the world. Using that strategy, it expects profitability within 24 months, he added.

Ubuntu has become popular among enthusiasts, though measurements of this are hard to come by; the most oft-cited statistic is Ubuntu's long-standing top placement at Linux version tracker DistroWatch. Canonical is counting on converting that popularity into business, and competitors should take note.

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