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The more I talk with Mark, the more I think he's a very, very smart person. He recognizes that Ubuntu needs to be more appealing on the desktop than the Mac to generate user adoption, but that's not really where his attention is focused, so far as I can tell. He's thinking bigger than desktop bits.

He's thinking of cloud-plus-desktop bits. And this, my friends, is why Mark may end up winning the "desktop" war.

When asked if anyone can make money selling a desktop Linux, Shuttleworth was blunt and candid. "No. I don't think anybody can. And that is a good thing." The revenue model that Shuttleworth had when he created the Ubuntu project and the Canonical support organization was to give away the software and patches and rely on tech support and other services that are required by some users and businesses to generate the revenues that give people at Canonical their jobs.

"It is at the heart of our philosophy to not make money on the desktop." And in this, Shuttleworth believes that Canonical is on the leading edge of the software industry, and that all software suppliers - including Microsoft - will have to shift away from licensing bits to selling services to make their daily bread. ®

When we first priced Basecamp in Feburary 2004 the plans were $9, $19, $39, and $59. There wasn’t much science behind it. We asked ourselves a couple questions:

1. What would we pay?

2. What numbers feel right?

By embracing the Google suite, do we risk getting marginalized? If we fail to innovate and provide extra value to customers, we will be marginalized regardless of whether we support the Google suite or not. That explains in a nutshell why we choose to cooperate with Google. It is a huge win for customers, and it keeps us focused on what we need to do to provide extra value.

I have always believed sports analogies get taken too far in business. Google Apps doesn’t have to lose if we have to win. That summarizes our philosophy and world-view.

Legendary management guru Jim Collins puts it best: “The signature of mediocrity is not an unwillingness to change. The signature of mediocrity is chronic inconsistency.”

There’s a third element that helps to explain extraordinary performance in these extraordinarily difficult times. Each of these companies connects with its customers based not just on price and features, but on identity and emotion. They have become virtually irreplaceable in the eyes of their customers.