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Interview of François Bancilhon, CEO of Mandriva

Thursday March 16 2006

Many news have been circulating over the web concerning Gael Duval's departure from Mandriva. Users and community members are concerned by the lay off of a key founder and would like to understand what happened and what is the impact.

So let us start with the Gael situation: did you fire Gael?
Let us now turn to the company strategy: is Gael's departure a sign of a shift in strategy?
So help up clarify it: who are the target customers of Mandriva?
Is Mandriva going away from providing a free version of its products?

Gael was not fired. This term would imply something wrong on his part, which was not the case. He was laid off.

Why was he laid off?

The company lost money in the October-December 2005 quarter. This means that we spent more money that we generated. We can do this temporarily, because we have cash in the bank, but doing this over a long period of time would permanently damage the company. So we had to make the reasonable but hard decision to cut expenses. The expenses cuts were done in a way we estimate will not keep us from generating revenue. Everyone works very hard at Mandriva and fulfills a useful task. So, when you have to cut, it means you need to cut people who were doing a good job and a useful one, so it is painful for everyone, but you have to make the hard choice.

Why is Gael suing the company?

You need to ask this to Gael. France has labor laws that give strong protection to employees and make lay offs long, expensive and complicated (but not impossible). Many employees (about 1 out of 4) sue their employer after a lay off, most of the time to get the employer to pay extra cash on top of the “regular” severance package (about 5 months for people with some seniority).

Was there a disagreement between Gael and the company management?

Not that I am aware of. We had and still have within the company and the management lively debates about the strategy and its implementation. Gael was part of some of these debates, even though he was remote. I don't think we agreed on everything, but I never got the impression we had fundamental disagreements. I've always valued his opinion, and I still do.

Gael mentions a new project, Ulteo. Where you aware of it?

Yes indeed. Gael brought this to me about a year ago I think (I might be wrong on the date). I looked at it carefully, we discussed it for some time with Gael and Jacques Le Marois. Our joint conclusion was that it would make more sense in a separate entity, which would have a partnership with Mandriva. I started looking for someone who could help Gael on this project on the business side and found a potential candidate. Then Gael came back and said he wanted to work further on the technology before discussing this and we left it there.

Let us now turn to the company strategy: is Gael's departure a sign of a shift in strategy?

Absolutely not. We believe the current strategy is sound.

So let us try to understand that strategy better. Many users have a hard time understanding your strategy and finding their way in your product offering. Are you aware of this?

Yes, we need to make our story more readable, we have some action in process to improve that situation.

So help up clarify it: who are the target customers of Mandriva?

We have two quite different targets: individual users and organizations. For these two targets, we have different products and offering, different sales channels and different strategies. As we move forward, we will try to distinguish more the organizations taking care of both segments.

The individual users made the original target users of the company, this is what MandrakeSoft was servicing, and we have a large numbers of individual users worldwide. We are fully committed to these users and to delivering exciting technology to them. We address them through retail stores and distributors worldwide, through e-commerce, through the club and through OEM agreements with large hardware vendors such as HP, Dell, IBM or NEC and local players such as Positivo in Brazil. The products are Free Mandriva, Discovery, PowerPack and PowerPack+ and the key service is Mandriva On Line. For these users, we have recently announced Mandriva One and Mandriva Kiosk, from which we expect a lot. We are committed to our individual users. A large part of the Mandriva team is dedicated to the individual user market both in terms of engineering, services, marketing and communication.

About 3 years ago, we announced our decision to start developing a new business line for organizations (enterprises and government agencies). Thus we have put in place a new product line (Corporate Server and Corporate Desktop), we have put in place a consulting, training and support organization. We address this market essentially through our direct sales organization in France, Brazil and the US. We have announced for this market the new administration tool, Pulse and put in place our Corporate Club offer. We also offer specialized and embedded services.

Is one of these targets being developed at the expense of the other? I don't think so, I believe on the contrary that they complement each other: they have some common r&d investment in the kernel and on hardware certification. We also find often that they feed each other: some individual users have learned about Mandriva from their enterprise and in many enterprise sales situations, we are meeting some of our individual users.

Is Mandriva going away from providing a free version of its products?

There is continuous rumor that we want to depart from the open source model, that we want to charge for things that were free, that we want to drop individual customers. So let me restate what I have said many times: First, everything we develop and distribute is distributed under GPL. Second, we remain committed to provide a complete free distro (Free Mandriva and soon Mandriva One) and to make its update free.

However, and we've always been clear on this, we want to be profitable, so we need to generate revenues. We do this by providing, besides the free products some commercial products and some services that we charge for. As we provide more technology and products, we try to bring both more free stuff and more commercial stuff.

For instance, in the new Mandriva One + Kiosk offering, there is free stuff (Mandriva One) and stuff we will charge for, or make part of the Club (Kiosk).

Look back at the three past years: we have never turned a free product or service into something we charge for. I'm not asking anyone to just take my word, I just say: please look at our track record.

People get the sense that some of your products are free, but that you want to charge for updates. Do you charge for updates?

We do not: for Free Mandriva, Mandriva One, Discovery, Power Pack and Power Pack+, updates are freely available and provided by us. We provide on top of this Mandriva On Line, which is a service that makes the updates easier: an icon on your desktop gives you the status (green you're up to date, red you're not), when the icon is red, you can ask for update by a simple click. We charge 20€ annually for this service. What you pay is the ease of use, not the updates.

What is Mandriva One?

Mandriva One is a Mandriva 2006-based distro, which holds on a single CD and which is both live and install. It's coming out any day now. It will first go to club members (because we like to give them an advance peek at things), then it will be free for all.

What is Mandriva Kiosk?

We have found that non technical users find it difficult sometimes to install new products and new versions of products. So the Kiosk is a response to this. The Kiosk will have a library of Bundles (a bundle is a set of RPMs that make a consistent application) and downloading and installing a bundle is done in a single click. Kiosk will be available as a paid service and will be free for Club Members silver and above.

Are you a company out to make profits?

Yes absolutely; our goal is to be profitable and growing so that we can develop great products, provide great services, and pay our employees. There is however one important difference with an ordinary company: in a standard company, you have to keep happy your customers, your employees and your shareholders. We do this at Mandriva, but we also have to keep happy our contributors, the community and our “free” users.

About Mandriva
Mandriva, formerly known as Mandrakesoft, is the publisher of the popular Mandriva Linux operating system, one of the most full-featured and easy to use Linux systems. The company offers its enterprise, government educational customers a complete range of GNU/Linux and Open Source software and related services. Mandriva products are available in more than 120 countries through dedicated channels and also from Mandrivastore.com, the company's online store. "Born on the Internet" in late 1998, has offices in the United States, France and Brazil. Mandriva is traded on Paris Euronext Marché Libre (ISIN Code: FR0004159382/MLMAN; Reuters code: MAKE.PA) and the US OTC market (stock symbol MDKFF).
Press Contact: Estelle Estrabeau, +33 1 40 41 17 64 https://mandriva.com