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Interview with GaŽl Duval

May 23, 2001
J. Corbet
We first interviewed MandrakeSoft co-founder GaŽl Duval back in August, 1999. Things have changed since then, and the discussion this time around, of course, was centered on the management changes and layoffs at MandrakeSoft. Mr. Duval paints an interesting and encouraging picture of where things are going; MandrakeSoft looks like it is in reasonably good shape.

Who is currently running the company? Will you be going outside for a new management team?

Jacques Le Marois has taken over CEO position and we have a strong management team with us. We won't change the management team until we are sure Mandrakesoft is on the good track and won't move from that track.

What led to this action at this time? Why stop now, rather than when the e-learning initiative was first discussed?

We are going to continue the e-learning and e-support projects as part of Mandrakesoft offers. There was a major disagreement between us and Henri Poole, whose vision was to shift the company towards e-services only, which means building a leading company in the e-learning field and a e-support platform for stuff unrelated to Mandrake-Linux.

As soon as it was clear that we wouldn't agree any longer about the strategy, we mutually decided to stop our collaboration. Our core component is the Linux-Mandrake system, an attractive OS targeted both to personal use and server use, with a business around.

Can you give me a rough breakdown of what percentage of your revenue comes from Linux distribution sales, and how much from services? How do you see that evolving in the future?

Currently it's around 70%/30% for Sales/Services respectively. Revenues mostly come from Linux distribution sales, but services are growing quickly and are going to become our primary source of revenue in a near future. We have many contracts in the pipe, and also have signed some big OEM deals, such as with HP.

The main issue in signing agreements is that Microsoft always comes and puts an incredible amount of energy into destroying all potential deals. I think Mandrake users can make a difference here by explaining again and again that Microsoft abuses of its monopolistic position.

Can you describe the service offerings that MandrakeSoft plans to continue and/or develop?

We will continue the e-services offerings, with a new feature soon that will allow some experts to offer their services for a fee. I think it's a major evolution because some people want help right-now, and a full help. If it's free support, there is no guarantee about the timeliness of answers from the community. If some experts provide value-added support, they can guarantee response time and offer great quality support.

Also we continue our "standard" services offerings, in particular in Europe. But only high-level deals/partnerships are privileged: for example, we are building with some partners one of the biggest Linux clusters in the world, it's for a European research agency. For lower-level offerings, we have some alliances with other companies that pay us when we bring them clients. In addition to our community of users, we are building a community of companies that live on Mandrake :-)

Will the MandrakeCampus and MandrakeExpert sites be continued and expanded?

Yes sure! The concepts are good and we'll go further with that. We just don't want to refocus the company towards e-services only. E-service are now part of the Mandrake-Linux offering. It's not Linux-Mandrake which is a part of the e-services.

What ever happened with the acquisition of Coursemetric? I see no mention of MandrakeSoft on the Coursemetric site, and none of Coursemetric on MandrakeSoft's. Was the acquisition ever completed? What is happening with Coursemetric now?

The board of MandrakeSoft decided to not pursue the acquisition process. It was part of Henri Poole's vision of building a e-services-centric company and we disagreed with that.

Is MandrakeSoft profitable now? If not, do you see profitability in the near future?

If we keep only the teams who make the products and market the boxes, and also the support teams, we are profitable. We have choosen to invest in some other areas, in particular in services because we believe it's going to be more profitable than selling boxes only.

In the meantime, there is an anecdote that few people know about Mandrakesoft: our first exercise was profitable, and we were reproached for that! Anyway, our plans are currently to be profitable and we'll try to reach the "break-even" in a few months.

Will MandrakeSoft remain independent, or is there a possibility of a merger in the near future?

There is no plan about that. My personal view is if Microsoft wants to buy us it's "no." If Sun wants to buy us and offers some guaranties in term of development, we are ready to discuss it with them. If you are talking about a merger with another Linux company, I don't think we share all the same principles, especially in terms of Free Software.

Anyway, we already cooperate strongly with some local Linux actors - I guess it's the good way for us.

It has been a rough time for Linux businesses in general. How do you feel about the future of Linux in the commercial world? What is it going to take to thrive in that world?

The situation is strange because the growth perspectives have never been as good as now: all data show that Linux is gaining market share every day. But at the same time, the financial markets are depressed, which has brought some young and fragile Linux companies, such as Eazel, to an end. It's bad because Eazel was kind of a symbol of the new Linux era, and at the same time there was much hope in their products.

So I think the key word is currently "psychology". It's NOT because some some startups have been killed by the stock markets that Linux is going bad. Linux is going very well: Linux 2.4 is an extremely nice OS, the new versions of KDE and GNOME are incredible. On the business side, we are growing quickly, I know Red Hat is planning profitability soon. We are really far away from the Internet companies!

We have to work hard, keep the same direction, and impose the new model of Free Software everywhere. We shouldn't lose faith because we have gold in the hands.

From what I've seen, it is tempting to compare MandrakeSoft's situation with that of Linuxcare: a community-based company that got pulled off course by venture capital, outside managers, and hopes for a quick IPO. How do you feel about that comparison, is it accurate?

I don't know enough about what really happened at Linuxcare to answer.

About Mandrakesoft, the situation is clear: we are not pulled off by venture capital. It's just harder than before to get venture cash because of the situation on the stock markets. That's the reason why we are going to reach profitability sooner that it was planned before. Our chance is that we already do much business so I guess it won't be too much a pain.

Is there anything else you would like to say to LWN's readers?

All in all I'm quite happy about what is happening here because the situation is becoming saner than before. Burning cash is not exactly the purpose of a company and I'm happy we have stopped that. Also I'm happy we have clarified our strategy on the Linux market, outside as well as inside Mandrakesoft.

I'm also very optimistic about the future of Linux-Mandrake: we have a very large user base, the first online sales of the very new Mandrake 8.0 are amazing, we have doubled our main web site traffic in less than one year, according to PC Data we are #1 Linux distro in US retail sales for first quarter of 2001, and according to Netcraft latest survey, we have the #15 most used web-server on Internet (Apache-Advanced Extranet Server) which shows that Mandrake is actually entering deeply into the server market and so is potentially an NT killer.

Last but not the least, I'd like to announce that we are working on an IPO process so we can open our capital to our users and contributors. I'm very enthusiastic about that.

Eklektix, Inc. Linux powered! Copyright 2002 Eklektix, Inc. all rights reserved.
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