Ubuntu, OpenX Chiefs Talk OS, Search Disruption

NEW YORK — Why compete with Microsoft?

To Mark Shuttleworth, CEO of Canonical — the lead commercial backer of the Ubuntu Linux distribution — squaring off against Windows is a battle worth fighting.

“The operating system is the intersection of so many things in technology,” Shuttleworth said here at Wired’s Disruptive by Design conference. “It’s where software meets technology.”

And as Shuttleworth sees it, he and others who have built their businesses around open source — Canonical provides premium, paid services around Ubuntu in addition to supporting the OS’s development — have an distinct advantage against the Microsofts of the world.

“Change comes to every industry, and in a steady state, it’s impossible to dislodge the incumbents,” he said. “Open source is the pointy end of change coming to all sorts of industries and it put us in a position to challenge incumbents.”

While Shuttleworth tackles Microsoft’s (NASDAQ: MSFT) operating system with Ubuntu, Tim Cadogan, CEO of open source ad serving platform OpenX, is using open source to challenge Google’s dominant ad-serving platform — as well as other big names.

“We’re going up against Google’s DoubleClick as well as Microsoft’s aQuantive and Yahoo’s RightMedia with $10 million in funding,” he said during a joint panel with Shuttleworth.

Cadogan said there’s a chance precisely because his competitors are so big. “The industry is concentrated, with a lot of big players. It’s the perfect opportunity for a free product that provides the freedom to innovate on top of it. It’s liberating.”

Benefits of free and open

For both Cadogan and Shuttleworth, the free and open source nature of their products are giving them a leg up that’s especially critical these days, when every eye is on the bottom line.

For instance, Shuttleworth said his cause is being aided by the tooth-and-nail competition taking place in PC hardware — especially among vendors selling low-cost notebooks and netbooks. With PC makers undercutting each other’s pricing, Ubuntu’s free price tag looks more and more enticing, he said.

“In consumer electronics, we see an extraordinary dive in hardware prices,” he said. One Laptop Per Child founder Nicholas Negroponte’s “vision of the $100 laptop is not far away. We’ll see a $200 laptop soon.”

Shuttleworth added that Ubuntu already works with channel partners such as Dell, HP, and Toshiba for Ubuntu on netbooks, where margins are especially thin. And he said that while Microsoft will release a version of Windows 7 for netbooks, he’s not feeling threatened.

“We’ll see a constrained version of Windows 7 — you will not even be able to change the wallpaper,” he said. “It’s interesting to watch competitive responses in industries that have been somewhat immune to competition.”

Cadogan also credited the collaborative nature of open source as a key strength.

“We provide advertising technology to anyone who wants to use it and install a service on top,” he said. “We provide free, freedom, and independence.” He said that some change the code and don’t share their changes, and others do share changes. OpenX is eager to encourage innovation. “We’re thinking of adding something like an app store.”

Shuttleworth added that open source collaboration helps his company flesh out its matrix of options, such as ensuring compatibility with a wide variety of databases.

Beyond collaboration, OpenX provides the potential of shared sales data: The OpenX terms of service allow OpenX to disclose aggregated data, for instance.

“Our users are comfortable sharing data to learn more about users and to make more money,” Cadogan said. “We want to let people see how their CPMs compare to others.”

But to some, at least, there are more obstacles ahead of free and open source software than taking on the incumbents. During the pair’s audience question-and-answer session, IBM alumnus John Patrick challenged Shuttleworth to deliver a more user-friendly Ubuntu experience.

“I love Ubuntu. I have it on several ThinkPads. I evangelize it to my friends and family, but entirely without success,” Patrick said. “There are two inhibitors. First, some desktop applications have not made it to the cloud, such as TurboTax, Quicken, and DreamWeaver. Second, it’s still too hard if you have to go into the file system or add a new device — how are you going to solve these problems?”

Shuttleworth said Ubuntu is working on it.

“If we create a platform so compelling to use, then the other problems tend to get solved. That’s become our focus,” he said. “Web 2.0 showed developers the importance and benefit of producing software that’s crisp and clear because a Web site has 5 seconds to demonstrate its value before the ‘back’ button is pressed. Developers saw the benefit of software that’s easy to use.”

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