Canonical, a software development company, is preparing for an initial public offering. UbuntuShe plans to develop in the field of cloud computing.
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Talks about Canonical's IPO have been going on since 2015 - then the founder of the company, Mark Shuttleworth, announced a possible public offering of shares. The purpose of the IPO is to raise funds that will help Canonical develop products for the cloud and enterprise IoT systems.
For example, the company plans to focus more on LXD containerization technology and OS for IoT gadgets. Ubuntu Core. This development direction is driven by the company's business model. Canonical doesn't sell licenses and makes its money through B2B services.
Canonical began preparing for its IPO in 2017. To become more attractive to investors, the company discontinued development of unprofitable products—the Unity desktop shell and mobile OS. Ubuntu Phone. Canonical is also aiming to increase annual revenue from $110 million to $200 million. Therefore, the company is currently trying to attract more enterprise clients. To this end, it has introduced a new service package— Ubuntu Advantage for Infrastructure.
Canonical does not require separate fees for servicing parts of the infrastructure based on different technologies - OpenStack, Ceph, Kubernetes and LinuxThe cost of services is calculated based on the number of servers or virtual machines, and the package includes technical and legal support. Canonical estimates this approach will help its clients save money.
Another step to attract customers was the extension of the support period. Ubuntu From five to ten years. According to Mark Shuttleworth, a longer operating system lifecycle is important for financial institutions and telecoms, which, compared to other companies, migrate to new OS versions and IT services less frequently.
Canonical's actions helped make Ubuntu more popular among such "conservative" organizations and strengthen the developer's position in the cloud solutions market. The company's efforts could pay off soon. There's a possibility that Canonical will go public as early as 2020.
What's up with this market
Analysts that with the transition to the status of a public Canonical can become a full-fledged competitor to Red Hat. The latter developed and implemented the principles of monetization of open source technologies, which are now used by Canonical.
For a long time, other companies with a similar business model failed to grow to the size of Red Hat. In terms of scale, it significantly outperforms Canonical - only Red Hat's annual profit all revenue of the development company UbuntuHowever, experts believe that the IPO funds will help Canonical grow to the size of its competitor.
At the developer's Ubuntu Canonical has an advantage over Red Hat. Canonical is an independent company that gives corporate clients the freedom to choose any cloud environment for deploying applications. Red Hat, on the other hand, will soon become part of IBM. Although the IT giant promises to maintain the subsidiary's independence, it is possible that Red Hat will promote IBM's public cloud.
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The IPO is also expected to help Canonical gain a foothold in the IoT and edge computing markets. The company is developing new products based on Ubuntu, which will help combine edge devices with cloud environments into a single hybrid system. While this area isn't currently profitable for Canonical, Shuttleworth its promising for the future of the company. Funds from the IPO will help develop technologies for IoT - Canonical will be able to allocate more resources to the development of edge products.
Who else is going to IPO
In April 2018, Pivotal placed part of its shares on the stock exchange. She develops the Cloud Foundry platform for deploying and monitoring applications in public and private clouds. Most of Pivotal is owned by Dell: the IT giant owns 67% of the company's shares and a decisive role in decision-making.
The listing was supposed to help Pivotal expand its presence in the cloud services market. Company spend the proceeds on developing new products and attracting the world's largest companies as clients. Pivotal's expectations came true - after the sale of shares, she managed to increase income and the number of corporate customers.
Another IPO in the market should take place in the near future. In April of this year, startup Fastly, which offers an edge computing platform and load balancing solution for data centers, filed for a share offering. The company will use the proceeds from the IPO to promote edge computing in the market. Fastly hopes the investment will help it become a more visible player in data center services.
What's next
On (paywall article) Wall Street Journal, B2B technology stocks may be more interesting than B2C IT stocks. Therefore, IPOs in the B2B segment usually attract the attention of serious investors.
The trend is also relevant for the cloud computing industry, which is why IPO companies like Canonical have a good chance of success. Proceeds from the sale of shares will help the cloud industry to actively develop technologies for which there is now a special demand among corporate clients - и for peripheral computing.
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Source: habr.com
