January 22, 2004

MandrakeSoft now profitable, says CEO Bancilhon

Author: Robin 'Roblimo' Miller

During an inteview with NewsForge at LinuxWorld, MandrakeSoft CEO Francois Bancilhon said the company is releasing financial results today
that show a profit. "Now, he said, "we can move to the next step, which is to grow it." He expects MandrakeSoft to emerge from the French
equivalent of Chapter 11 as early as March, but notes that under French law, "this can take some time," so he cannot be certain of exactly when
MandrakeSoft will have the cloud of bankruptcy lifted from its corporate head.

Asked about quality control problems that have plagued recent Mandrake
releases, Bancilhon said, "I think we have improved a lot from 9.1 to 9.2."

Beyond that, he said, We are going to introduce something new with 10.0.
We are going to have two versions of the system."

One will be "community," the other "official."

The "community" veresion is expected to be the first major Linux
distribution that includes the 2.6 kernel. Two or three months later,
the "official" version will also incorporate the new kernel.

Bancilhon expects to see updated versions of the "community version"
every six months, while the "official" version will be on an 18 month
release cycle.

Bancilhon said MandrakeSoft is not doing the same as Red Hat management
has done with their split between Red Hat and Fedora. The "community"
version of Mandrake will still be produced by company developers and
supported by MandrakeSoft employees as part of their job, unlike the
Fedora project which is produced outside of Red Hat's formal development
structure and supported by volunteers.

Expenses down, income up

According to Bancilhon, MandrakeSoft is now down to 60 employees and has
total corporate expenses of about 300 thousand Euros per month, while
income from "Mandrake Club" subscriptions and other sources are up
substantially. Not only that, raw downloads of the free Mandrake
versions -- which often lead to users becoming paid subscribers -- are
now in the range of "three to four million per year."

The vagueness in download figures is because MandrakeSoftw had no
accurate download reporting mechanism in place until last quarter, said
Bancilhon. But now he knows "it is growing. All my numbers are growing."

Will Mandrake be the only major KDE distro?

Bancilhon said, "We keep our principles. We are true to the open source
model. We will keep having free downloads and a business model
consistent with that."

He also said he expects SUSE to start using Gnome as its primary desktop
now that Novell, which had already bought Ximian, has acquired the
company. Red Hat is Gnome-oriented, and has developed its own
"Bluecurve" desktop. Of the "bg three" corporate-produced Linux
distributions, this would leave Mandrake as the only one with primary
loyalty to KDE.

SUSE has traditionally been a major KDE supporter and has employed a
number of KDE developers.

NewsForge asked Bancilhon what would happen to KDE -- and KDE-dependent
Mandrake -- if SUSE stopped supporting its developers. "I don't know,"
he said. "I hope (by the time that happens) we'll have more room to
support them."

Mandrake still loyal to individual desktop users

"50% of our customers are running desktops or laptops, 50% run Mandrake
on servers," said Bancilhon. He noted that sales are to "60%
individuals, 40% corporations."

He added, "Those individual users are the one who have supported the
company. We'll keep supporting them. At the same time, we want to
develop and strengthen our corporate offerings.

"Over the next year we are going to go after more corporate service
and sales, starting in France.

At this point, according to Bancilhon, fewer than 15% of Mandrake
users are in France, but he expects this to change with MandrakeSoft's
new emphasis on actively seeking corporate customers in its own country,
rather than relying so heavily on foreign sales.


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