Canonical, the business arm of Ubuntu, has one of the most promising business models in the Linux world, and also the most misunderstood. First of all, Ubuntu is in a market termed by economists as a perfectly competitive market. This means that it can not charge any price beyond that which is determined by the market. The only way to make profit, as has rightly been identified by Canonical is to create an ecosystem of products and services around Ubuntu, which would complement the functions of the OS.
This is model of making profit is not new. There are other companies that make money from this method. Give the primary product for free but then create other value added products and services that complements this primary product. To make profit from this kind of business model takes time and a lot of investment. Mark Shuttleworth, the financial backbone of the Ubuntu project rightly knows so and is doing exactly that. Most critics of the Ubuntu distro, are convinced that it's only a matter of time before Ubuntu also capitulates like its predecessors for lack of funds. They could not be further from reality.
The fact that Canonical after six years of existence is not making any profit does not spell any doom, neither does it mean there is no light at the end of the tunnel. Most of the distros that are always used as yardsticks to tell how Ubuntu is bound to wither away did not have any other strategic business model in place. They only offered a Linux distro and expected to make money from it. Some also did not have a thorough understanding of the market in which they operated. Ubuntu so far has not fallen in any of those traps.
The recent partnerships between Canonical and big shot OEMs like Dell and IBM only goes to underscore the fact that the Ubuntu business model has a lot of potential. Companies like Dell and IBM will not partner a distro that they do not believe to have a future. Their partnering with Canonical to offer Ubuntu only underscores one fact- there is light at the end of the tunnel for Ubuntu's profitability.
Also, there are those that claim Ubuntu is an ugly, over-hyped distro by mostly fanboys like myself. Well they have the right to their opinions, but a thorough analysis of Ubuntu tells you that it is in the news virtually every other day. Not a day or two passes without Ubuntu being in the news. Count how many times this week that you've heard of the name Ubuntu in the news and you will understand why it is popular. As for the ugliness, I believe it takes time to get used to. I also initially disliked the brown, but when I got used to it, I could hardly like any other color or theme.
The fact remains, that Ubuntu, despite all the short comings of its commercial backer like not contributing enough upstream or not giving enough back to the community, is an OS that has the potential to be a market leader in the desktop Linux OS market and whether critics agree or not, Ubuntu will for the foreseeable remain a popular, first choice OS for a lot of people.