Does the 485th richest person in Britain really need to crowdfund a mobile phone?

People get fanatical about open-source software, but Canonical Inc. is not a charity, writes Alex Hern.

Yesterday, Canonical, the private company which leads development of the open-source operating system Ubuntu, started a crowdfunding campaign on the site IndieGoGo. The aim is to raise $32m to enable the production of the "Ubuntu Edge", a planned smartphone running the operating system which will incorporate elements of the desktop software, to create what the company calls "next generation of personal computing".

The device itself looks promising, although with a starter price of $830 (the crowdfunding campaign is offering discounts of up to $230 to early backers) it will need to be top-of-the-line to compete. Nonetheless, just a day in and they have already raised over $4m. But there's a bigger question to be asked, which is: why crowdfund?

The relationship between Ubuntu and Canonical can be confusing, at least to people outside the world of open-source software development. "Open-source" is the term for software which has been released to the commons by its creators. There's a number of ways to do this, but the most popular is with a so-called "copyleft" license, like the "GNU general public license", or GPL. That allows anyone to take the source code of a program and use it to make new things, without asking permission or paying anyone anything; but, it requires that any new software which is made is also licensed under the GPL, and has its source code released to the public.

Ubuntu, the operating system which Canonical leads development of, is licensed in this way. It's based on a family of open-source operating systems called GNU/Linux, and so it would be difficult (although not impossible) to charge for: anyone who wanted to get the software for free could perfectly legally download the source code, compile it, and then host it themselves.

Instead, the way companies such as Canonical make their money is by selling customer support and similar services to users of open source software. But with the Ubuntu Edge, they won't even have to do that. While the software will be open source, the hardware is still something people will have to buy, so they will be able to make money on it far more directly. And they do make money; Canonical is a private company with a reported annual revenue of $30m, founded by Mark Shuttleworth, the 485th richest person in Britain, who bought a flight on the International Space Station in 2002 for $20m.

If you're a multi-million dollar company headed by a multimillionaire with a bolshie idea for a product which could make you a lot of money, the normal way to do things is to sell shares and take loans until you've got enough cash to fund the product; then sell that product to customers. Taking thousands of pre-orders for a phone which you won't deliver until May 2014 – and which you have no contractual obligation to deliver at all, because crowdfunding sites are not e-commerce sites – and dressing it up in the aesthetics of artistic patronage is an odd, and slightly distasteful, way of doing things.

Kickstarter, the leading crowdfunding site, recently doubled-down on its opposition to this sort of campaign, writing that it's a service "to help bring creative projects to life", and tightening up its rules to prevent companies using it to launch their businesses. It's not hard to see why, when this is the sort of thing which has been stopped.

The Ubuntu Edge docked with a monitor. Photograph: Canonical, Inc.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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“Socialism with an iPad” isn't as ludicrous as it sounds

Technology is changing the labour market faster than ever before. John McDonnell argues that it's the state's responsibility to make sure the outcome is fair for everyone. 

The speech shadow chancellor John McDonnell gave at Imperial College earlier today started fine. As my colleague George Eaton points out, McDonnell was valiantly attempting to reframe the economic debate – to show how investment, especially in technology research and infrastructure, could reinvigorate the economy in ways austerity can’t. 

But then he got to the last line. “It’s socialism,” he summed up, “but socialism with an iPad.”

The clunky slogan sailed a thousand The Thick of it references (Bat People and App Britain featured prominently), and its use as a soundbite across the media made McDonnell’s argument look out-of-touch and embarrassing. But in the context of his argument, the line isn’t as nonsensical as it sounds.

Buried in the speech were a number of important arguments about how we let technological advancement come about. It’s lazy to assume that technology is inherently democratic, and will necessarily bring about a fairer society – as things stand, it’s deepy embedded in capitalism. But it's also changing the labour market faster than ever before: automation and robotics will soon mean that most tasks can be carried out  by machine, making those who control those machines vastly more powerful than those who don’t. 

In his speech, McDonnell pointed out that automation will replace low-paid workers first:

Technological advance is forcing the pace of change. Bank of England research suggests that 15 million jobs could be at risk of automation over the next decade or so. And those most at risk from automation are the lowest-paid.

He added that technological advances, and the changes they’ll make to the labour market, must be managed by the state so that workers don't lose out. Technology contributes to the wealth gap, and could well make it worse, unless, as McDonnell says, the government “understands and accepts the strategic role it has to play in our new economy”. This sounds woolly, but it's an important point - Tory policy on issues like tax or the the Transatlantic Trade Partnership (TTIP) has been remarkably hands-off in ceding power to large corporations. 

McDonnell implied that a large and involved state is crucial in a globalised, technological world, to ensure that workers' rights don't fall through the cracks and inequalities don't widen. A large welfare state would help cushion workers in a changing economy -  tax credits, as McDonnell explained earlier, can help make up for low wages in small, start-up businesses. 

Corporations have a poor record of improving working life and helping out those unable to work, or whose skills become redundant. These safeguards will become ever-more important as technology changes the labour market forever. And it’s here, McDonnell argued, that a bit of socialism will be needed. Even if it's carrying an iPad. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.