April 5, 2002

MandrakeSoft CEO: Our Mandrake Club makes business sense

By Jacques Le Marois, CEO and co-founder of MandrakeSoft -

I would like to clarify some issues that were raised in your recent
"Mandrake 8.2: great software distributed poorly." We're extremely happy
that you are enjoying Mandrake Linux 8.2; much time, effort and testing went
into this latest version, and we, too, think it is our best release ever. But I
must disagree with your view of MandrakeClub. The Club is not a system of
"begging customers for money." Let me briefly explain the logic behind enacting a
business model based on the MandrakeClub.

First of all, let me say that more than 5,600 people have subscribed to
the Mandrake Club, including 3,500 new subscriptions since March 11. The
Club has generated more than $390,000 since it was first created on November
28, 2001. The Corporate Club is also very promising, since we have yet only
recruited a small fraction of the companies who are currently using
Mandrake Linux in their businesses. So far, we have generated $30,000 from
corporate subscriptions.

Imagine if we had proceeded differently and built, for example, a
"premium download" service similar to the Red Hat Network. Do you think we would
have achieved the same success? I don't believe so. In my opinion, the
overwhelming majority of users do not have an interest in paying for
such a service. I also think that if we had done something similar to the
Red Hat Network, it would have generated much negative feedback from people who
might think that MandrakeSoft was going proprietary.

So to me, the way we are proceeding is a smart and thoughtful decision.
The Club addresses the needs of two categories of users:

The first category joins the Club because they use Mandrake day to
day. They love Mandrake, and they appreciate the faithful manner in which we
follow the "Open Source way" (for example, putting the download version
on the mirrors as soon as it is ready, sometimes even a full month before
the commercial release). This group of users wants Mandrake to continue its
current policies, so this is why they subscribe. They understand that
the Club is not a donation or a charity system because we are providing
something very real in exchange. (Mandrake for download, multiple mirrors,
MandrakeUser.org, support for various Free Software projects, everything
in Open Source, etc.) These people understand that they are paying for the

Let's compare the Club with to well known "shareware" model. With
shareware, the user pays after using software for a certain period of time -- let's
say three months. Let's call the Club "OpenSourceWare," since users pay
because they want to maintain the same level of development. I guess it can also
be compared to a church.

The second category of Club members join for the benefits.
Recently, we began offering the final version of StarOffice 6.0, with an
OEM license, to Club members for download. Now that's a real benefit! As far
as we know, MandrakeClub is still the only place in the world where it's
possible to get StarOffice 6.0. Also, access to the commercial RPMs from
the retail packs, correctly tested and packaged for Mandrake, is a real
benefit. Direct download access of the Mandrake software and commercial packages is
available to Silver Corporate members -- that's a solid benefit!

I agree that, for the moment, there are few benefits compared to the
cost of membership, but we are constantly adding more and more privileges to
attract people who don't necessarily understand the first category of users -- yet.

I hope that at the end of this year when the financial results are
published you, too, will believe that we made the proper choice!

Everyone is invited to read the complete details of the Mandrake Club at:

Click Here!