MandrakeSoft is looking at a Chapter 11-style bankruptcy, to solve its financial difficulties, according to a leaked email from one of its executives. New MandrakeSoft CEO Francois Bancilhon says the liabilities total about €2 million, but that he’s weighing all possible choices for resolving the problems. The leaked email, however, paints a different picture. It describes specific plans to go with either Chapter 11 or its French equivalent. TheRegister has the story and NewsForge as well.
MandrakeSoft Mulls Chapter 11 Style Escape, Says Email
2003-01-14 Mandriva, Mandrake, Lycoris 46 Comments
Considering how many people donate to the charity otherwise known as MandrakeSoft, this is a f*cking joke.
What the hell do they do with the money? Burn it?
I have been using mandrake and god I love it. Just a preference. Hope they dont completely dissolve the company. Would be a great setback for Linux Community.
Well, this is a different ballgame entirely. Now, I’m much more pessimistic about their future.
at least that will give a slack to the Be inc mismanagement for a while.
If Mandrake goes under, maybe they will set up some way to keep the distribution alive, perhaps modeled more after Debian. I know that the code is open source, but I’m referring to keeping development of the distribution alive in a post MandrakeSoft environment.
…. were Linux would be without Mandrake or Red Hat…
Another linux company bites the dust.
I’m astonished … from what I’ve read here and elsewhere, Linux is supposed to be the NBT.
Why do companies based on selling it as an OS continue to fail?
As in, there is none. End of story.
I think Mandrake should give in and accept that the Linux market isn’t big enough for 2+ commercial desktop players. With Redhat, Mandrake and Suse all vying for market share one of them will have to give. I don’t see why they HAVE to stay commercial and spend money they don’t have on salaries, office space, benefit packages, etc. I wish they’d just go back to being a non-profit organization like the others – Gentoo, Debian, Slackware. Then I could put up with their whining for money.
I’m really a BSD person but I do have one Redhat; not because I think it’s that great but because I think they will emerge the eventual winner so I want to stay familiar with it.
They’ve been telling a whole bunch of lies to their users, and specially to their customers. I hope they get out of trouble, quite a debt, at the end I believe most people would agree that’s only possible if management changes drastically, really, meaning somebody goes for good.
Announcemnet quotes from Mandrake´s website a month ago:
MandrakeSoft recently announced significant increases in revenue and reduction in expenses. While many companies have struggled to prevent declines in revenue and profitability in this economic climate, MandrakeSoft showed positive results in both areas in large part due to critical partnerships with OEMs, success of new online services, and a general growth in the demand for Linux solutions. After strenuous efforts over the past 12 months MandrakeSoft’s business model is more solid than ever with a number of new announcements and some exciting developments on the horizon.
Would hate to see Mandrake go. They make a really friendly distro. But if they do go under, someone will pick up where MandrakeSoft left off. Such is the nature of OSS.
they have done nothing for the last 3 years that can be called inovative. just cobble together the new packages and do incremental improovements on their drake apps which tehy have failed to integrate into the OS.
While they may be covering things up I give them a good chance of coming through this period. People on this site are making it sonud like it is a foregone conclusion.
It’s not, or at least no one on this thread has any real reason to think it is the end of the line.
The “people on this site” are just quoting the first two paragraphs from TheRegister.
” …just cobble together the new packages…”
More than I can say for Debian, there, deb-man…
…I, well, “bought their product”. I pre-ordered Mandrake 9 on DVD, and am happy to have done so. They got paid for their work, and I got a great OS in a convenient format.
Somehow this seems more appropriate, in a free-market context, than downloading the ISOs, burning them, and then being begged for donations.
Linux base business is doomed. Stallmanites don’t pay for anything.
Mandrake needs cash and their core audience don’t pay for software.
I’d like to see more businesses adopt a model like what ZoneAlarms did. Free for personal use, but if you’re going to use it for a business, you must pay…
And if you audience is the home user?
>>>>I’d like to see more businesses adopt a model like what ZoneAlarms did. Free for personal use, but if you’re going to use it for a business, you must pay…
You still going get screwed by the big computer companies. Take Apple’s new browser, they “deQTfied” khtml by writing a wrapper for it, bypassing the need to use qt (which I think has a commercial licence).
Yup, that’s exactly right, and the reason why Linux & profit don’t mix. If you wanna code for Linux, do it for the love of coding and release your apps/games for free, otherwise choose another platform to work with if you’re intersted in monetary gains.
Because while some people will make money doing the Linux thing, most won’t. And while some Linux users will pay for your app(s), most won’t. There is too much of a stigma that Linux == free (as in beer), thanks to the zealots who have been screaming for years that Linux will cost you $0 (as opposed to the ‘thousands of dollars’ you will burn going the Win32 route) .. people are just too used to that way of thinking.
I’d like to see more businesses adopt a model like what ZoneAlarms did. Free for personal use, but if you’re going to use it for a business, you must pay…
Haven’t you ever heard of GPL? They can’t release it to the public for a fee. They could have an extremely-suggested donation, but nothing more. I guess they could give away the source code and keep the binaries to themselves, but then somebody else would just compile it ten seconds later.
>>>Haven’t you ever heard of GPL? They can’t release it to the public for a fee.
That rule only applies if you didn’t write 100% of the source code. If you write 100% of the original source code, then you can release it under different licenses.
Secondly, it wants to get Venture Capital (VC). The email claims the company is close to cutting a deal with one or more VCs.
If they’re even thinking about going bankrupt, it seems their chances of attracting any new equity investment would be slim and none.
Have you ever read the GPL? Nothing in that document prevents a person from charging a fee for an application that includes GPL code. It simply requires that the source for the application be available, and that the application itself also be subject to the GPL. You can require people to pay for the application if you want. The GPL has nothing to do with free, as in beer, and everything to do with free, as in freedom.
I had been using Mandrake as my primary distro for over 2 years and decided to chip in a bit by ordering Mandrake 9.0 CDs from their Mandrakestore.
Their “beta” order checking system showed that the order was still under process even after 3 weeks,. Upon writing to the customer service department about it, I was told that there was a “problem with logistics” and that my order would be processed ASAP. Finally after 3 more weeks I recd an email from them saying that my order cannot be processed due to problems on their part and that my $$ would be refunded.
Now that sets me thinking…I tried to ‘help’ Mandrake. They screwed it up? For over 6 weeks, where was my money? with the credit card processing company/ Bank? So who gained from this transaction? Not me, not Mandrake either, but the financial company!
This is not only sad but also ridiculous that Mandrakesoft cannot seem to get over its problems. I can only hope that even if they vaporize as a company, Mandrake the distro will somehow be kept alive.
i must say that i don’t feel sorry for them
over the last few months (and year?) they’ve been asking for donations etc etc and react really rather nastily when people ask for something in return. small things. like having access to all their forum pages. and i said at the time to them that people must want something in return however small for their donations… or else they won’t be happy to throw money at them. come on mandrake – why the attidtude? you’re not THAT god-like! they snarled at any suggestion that people who donate cash should perhaps get a share or option in the company. they sniffed and snarled.
again they rasped and spluttered when it was pointed out by various users that their “official” upgrades were breaking peoples boxes…
i said it then and i’ll say it again – beggars can;t be choosers… and with an attitude like that – they are going end up flat on their backs…. with no sympathy from the fast deteriorating “loyal” fan-base. even loyal fans have a limit to how often and and how much they donate funds with no say as to how the funds are spent or how mdksoft could give them a benefit or two…
shame really – the distro itself has been the best of the bunch for a longtime…
now gentoo… on the other hand… have a rather nice friendly bunch of people working there… and rather professional too… i’d say that if they became commercial they would do rather well.
At the moment Linux isn’t even close to being ready for my desktop, I tried several distros including Mandrake before giving up and going back to Windows. But Mandrake was one of the few that actually seemed to be making a real effort to make Linux a better desktop OS. The comunity always seemed quite newbie friendly and helpful and Mandrake came up with some good ease of use enhancements such as decent GUI config tools. It’s a shame to see them go so I hope they keep working on Linux in some form. I really hope some day Linux will be mature enough to replace Windows as an easy to use desktop OS, but that is less likely to happen without companies like Mandrake
good thing about debian is they do not have to worry about money….from a comercial sence, mandrake is horrid.
After years of “newbies should use mandrake”, I think there are plenty of distros more user friendly like Xandros (amazing) or Lycoris, so who cares about Mandrake, we don’t need it, some distros will die some new distros will appear (Yopper…), it is always linux and it gets better all the time.
Fav Free Distro: RedHat
Fav Non-Free Distro: Xandros
so I guess RH is not making a profit or anything right….the only place to make money right now in teh Linux world is in the Corprate market which is why RH went there first and has a huge piece of that pie. RH is a real profesional company, Mandrake is a hobby that the dude tried to make a buck off of.
>>>so I guess RH is not making a profit or anything right….
I won’t exactly call redhat as making money. True, Redhat made about $300K in the last quarter, even on a no-non-sense GAAP style.
But, RedHat has close to $300 million in the bank. Even if you do nothing and earn just 1% annual interest, you would have gotten $3 million per year (or $750 per quarter).
“But, RedHat has close to $300 million in the bank. Even if you do nothing and earn just 1% annual interest, you would have gotten $3 million per year (or $750 per quarter).”
true, but lots of ppl will be out of a job.
Mandrake raised the bar a few years ago by creating a more user friendly distro. I like their GUI admin tools, better than RH8 and Suse ,IMHO.
However, their begging and pathetic management has kept it off my machine. I see RH and Suse eating up what little market they have on the corporate desktop side, and ELX, Lindows, Lycoris, Xandros and others eating up the market on the home desktop side.
Come on, who wants to put the time, effort and money into a distro that begs for money? F*** that, I don’t care how good it is. Either use a strong community distro like Debian or Gentoo, or use a solid commercial distro like RH or Suse.
>>>true, but lots of ppl will be out of a job.
They should be all volunteers anyway, right?
So Mandrake has gone bust. In the PC world a Mandrake sized failure would be a non-event. Billion dollar write-offs are routine in the ‘real’ world of IT. Mandrake was a hobbyist business that failed – no more serious longterm than Joe’s Diner going bust.
>>>They should be all volunteers anyway, right?
I wonder how many are volunteers?
they are still making profit and you can not say otherwise.
>>>they are still making profit and you can not say otherwise.
Redhat is not making a profit from linux operations. Therefore any attempt to characterize it as a success to the open source business model is flaw.
> Have you ever read the GPL? Nothing in that document
> prevents a person from charging a fee for an application
> that includes GPL code. It simply requires that the
> source for the application be available, and that the
> application itself also be subject to the GPL. You can
> require people to pay for the application if you want.
Oh COME on. Get REAL, damn it. Nothing keeps *you* from demanding a fee for GPL’ed software. Nothing keeps your *customers* from buying *one* goddamn copy of it, replicating, and re-selling it for the costs of them doing the copying and providing the FTP server.
Now *PLEASE* tell me how that business model will cover *your* costs of *creating* the stuff in the first place.
Yes, the GPL is about free as in freedom. But sure as *hell* it does *imply* free as in free beer.
Which is why I’d rather shoot myself in the foot than place my project under the GPL. (Together with a number of other reasons.) The GPL is really great for a couple of geeks hacking together software, and it went surprisingly far. But it is a non-option for a project that consists of more than a single-purpose tool, and sure as hell it makes life difficult for a company that has to pay its developers, unless that company has something to do cross-budgeting with (like, a consulting department, hello RedHat).
I am FreeBSD user and before that, I used Linux. When StarOffice was available free of charge for non-commecial use, I would pay for it, when I needed sound support, I bought OpenSound, when I wanted a new, more upto date distribution, I bought a copy.
The people who don’t buy software are the same people who moved from Windows because they can no longer get a free ride by pirating software off the net. These people are never going to buy software, and don’t tell me they don’t exist in the Windows world, because by far, the Windows world has more “I’m not going to pay for software” whiners that you can point a stick at.
The only thing that is keeping the Windows software developers afloat is the demand by businesses, who are kept in line via random/surprise BSA audits. If it weren’t for that, the Windows software market would be be as so-called “unprofitable” as the Linux market.
How many people do you know, honestly, who will go down the road and pay AUS$1200 for a copy of Microsoft Office? according to some reports, Office has 85% of the market place, yet, funny they never actually report the number of legitimate copies actually being used. Same goes for Photoshop. How many people actually buy a copy of Photoshop? these are the same people who complain about paying AUS$1.20 for a cup of coffee and you expect them to shell over AUS$1000 plus for a piece of software!?
Why? A classic case of a company acting like a non-profit organization.
Mandrake has so much potential. But their one big gigantic mistake is that they stop listening to their *customers* (not the average downloader hogging MandrakeForums) and they let their competitive egde fall in the gutter while new companies like Xandros, Lycoris (a 3-man company, can you believe that?) etc. try to take on a new market, and old players like SuSE and Red Hat pursue these markets as well.
I’m using Mandrake Linux 9.0 now, but I’m not using their default KDE, GNOME, XFree86, heck not even the kernel. I started using it because it was the first to use GCC 3.2 to my knowlegde.
But If I was running a company and want to use Linux, Red Hat, SuSE or Xandros would be the answer. Or if I’m recommending it to my grandma (who can’t read English, so I won’t in real life :-), Lycoris, Xandros maybe even Lindows.com.
Right now I’m thinking of using Gentoo instead of Mandrake, BTW.
Besides, not only has their competitive egde gone away to the other world, so is their professional image (if they had any in the first place). Just go to Linux-Mandrake.com – does that page resembles anything that is close to professional? And not to mention ugly? And their other websites are both inconsistent, clashing and the arrangement of them is cluttered.
My take, if they want to survive after Chapter 11, they better shape up. Listen to your paying customers and potential paying customers. Increase your services and their value. Put on a new image for the company.
Andrew: And if you audience is the home user?
If your target market is the home user, you better pack up and leave. Most home user don’t care what OS they use, if they know what OS means in the first place.
Darius: Because while some people will make money doing the Linux thing, most won’t.
I tell you why most Linux companies aren’t profitable, besides it’s low profit margin.
1) Most of them start off as an product idea, not a way to capture the market. Most of them either got pissed off by Windows/commercial UNIX or a Linux distribution and decide to write their own.
2) They focus too much on the product and not the services accompanying it.
3) Their services aren’t all that special, most people can live without it.
Now, just look at the successful Linux companies, they don’t follow any of the above. For example, if I was in Red Hat’s target market, I would need something like Red Hat Network. Would I get it? Hell yeah! What about installation support? Yes, I would certainly pay them to do a good job.
Linux can be profitable, however the profit margins is low and the competition is high. Something like the PC market… hee hee hee.
Darius: There is too much of a stigma that Linux == free (as in beer), thanks to the zealots who have been screaming for years that Linux will cost you $0 (as opposed to the ‘thousands of dollars’ you will burn going the Win32 route) .. people are just too used to that way of thinking.
If you try to change that way of thinking, you would go in the way of the dodo. If I enter the Linux distribution market (which I probably won’t, the profit margins, like I said, is rather low), I wouldn’t try to make money out of Linux itself rather services associated with it.
I must make sure that my target market needs these services, and my services are 10x better in quality and value than my closest competitor.
Stephen Smith: Haven’t you ever heard of GPL? They can’t release it to the public for a fee.
By removing Mandrake’s software as GPL and making them propreitary, yes, they are no longer free. Unless of course you want to use Mandrake without their add-ons, which removes the purpose of using it in the first place.
matt: The GPL has nothing to do with free, as in beer, and everything to do with free, as in freedom.
But always forget with free as in speech, someone else can come around and make it free as in beer. Within hours.
RH is a real profesional company, Mandrake is a hobby that the dude tried to make a buck off of.
My point exactly. If I had my way around Red Hat, a lot about their products would be different, but one thing for sure, though matter how good your products, bad PR + bad professionality + terrible support = completely disaster.
However, just to note Red Hat doesn’t make profit from Linux itself.
Matthew Gardiner: Office has 85% of the market place, yet, funny they never actually report the number of legitimate copies actually being used.
It is actually rather impossible to count the illegitimate copies. The market share is for legitimate copies, I expect the market share to be around 95% to 98% if counting illegitimate copies. My rought estimate however.
Now hear you talking.
> If I enter the Linux distribution market […] I
> wouldn’t try to make money out of Linux itself
> rather services associated with it.
> I must make sure that my target market needs these
Which means, there is a considerable interest in *NOT* making Linux the most userfriendly, easy-to-administrate OS that ever was, correct?
But can anyone really make a profit in the home market? Most people simply use the software that comes on their PC. They rarely go out and buy anything. They’ll download Winamp, or RealPlayer, or use Paint for image editing. If they do buy something, its games, or that damn PrintShop (I used to sell software in the mall. We sold more that crap than I care to mention). Not very many home users will pony up the dough for MS Office, or Adobe Photshop, or Movie making software. No, they’ll stick with what comes with the PC.
So, who is buying all this high dollar software? Businesses! And only because if they pirate it, and are caught, they get a $100,000 fine, or something like that.
Solar: Which means, there is a considerable interest in *NOT* making Linux the most userfriendly, easy-to-administrate OS that ever was, correct?
Wrong :-). If my product sucks, though matter how good my services are, they would fail. Besides, it is extremely unlikely that I would enter this market. Most likely I would try my hands in the office market. Maybe the OS. But not as a distribution.
>>>However, just to note Red Hat doesn’t make profit from Linux itself.
As I said earlier, RedHat makes a profit from interest payments off from their 300 million dollar cash (300 million dollars at 3% annual interests which is the rate 5 year US treasury bond makes = $9 million dolloars). So if they “make” a 300K, then in reality their whole Linux operation loses like 10 million dollars.