Ubuntu is offered for free wheras Red Hat costs money, so it isn't surprising
that companies switch to Ubuntu.
As for adapting existing free software projects for small companies, I wonder
how many people understand the source code of existing free software projects
well enough to be able to offer such a service. Most free software projects
have only a handful of developers, wheras Linux is an exception to this rule.
Granted, developers could be hired to develop new software from scratch for a
fee, but this model seems hard to sustain (you need to constantly find
interested clients, wheras with proprietary software you simply develop one
piece of software and license it).
The Openmoko phone provided companies a secure phone (the modem cannot switch
on GPS and microphone) and an opportunity to develop custom software for it
(e.g. the companies could develop a phone which encrypts the data sent using
the internet). Unfortunately, this didn't actually happen.
Mozilla's free browser (FireFox) is funded by an advertisement deal with
Google. Google hopes to make money from Android with the "Google experience"
proprietary software which comes preinstalled on phones (Maps, GMail,
YouTube, Market etc) which collect user information they can sell to
advertisers. I won't be surprised if Microsoft makes significantly more money
from Android (by making patent deals with manufacturers) than Google does. As
already mentioned, Canonical isn't making money and only exists because a
multi-millionaire is funding it.
