MandrakeSoft.com: Mandrake Linux Club explained


Following our recent announce about the launch of a Mandrake Linux Users’
and as requested by our users, we’ve just released the
following datasheet to explain where we go with Mandrake Linux and
why we have launched a Users Club.

Mandrake Linux and Mandrake Club
explained to all

What privileges are offered by the Club?

The Club has many real and attractive advantages that are
currently in development. In this early stage of the Club, we

  • the opportunity to download commercial software usually only
    available with packaged versions.
  • a special location where members can stay informed of the
    latest offerings, provide feedback, and vote on additional
  • significant discounts on products and services.

Additional benefits will be developed based on the suggestions
of Club members.

How many employees work for MandrakeSoft and what are
their job functions?

MandrakeSoft currently employs over 100 individuals:

13 employees work full-time on various Internet services such as
MandrakeLinux.com, MandrakeUser.org, MandrakeForum.com, the weekly
newsletter, and building & maintaining good relationships with
the Linux community.

43 employees work in Research and Development. These are the
people who work specifically on developing the Mandrake Linux
distribution; they: select, test, improve and package the various
free software components; develop the DrakX installation program
and Mandrake-specific configuration tools; test the system on
various hardware configurations; manage translations and create
documentation. They also port the distribution to other
architectures such as PPC and IA64.

The result of their work is then made available for free in easy
to use formats (ISO images, printable documentation, etc.) with
Open Source licenses — this means than everyone is free to
download, duplicate, improve and even resell the product.

Several other employees work on external projects such as the
Linux Kernel, KDE, KOffice, and others. These paid employees do not
provide a direct benefit to the Mandrake Linux distribution, but
sponsoring them is part of our ongoing commitment to the Free
Software community.

The remainder of the employees focus on business-related areas
or with the administration of the company. This includes work on
commercial packages, marketing, and providing services such as
training, support and consulting.

How does MandrakeSoft receive revenue?

Most of the company’s revenue (85%) results from the direct sale
of boxed products such as the Mandrake Linux PowerPack. The
PowerPack is a retail version of the distribution that includes
documentation, support and third party software. The remaining
revenue comes from services (support, training, consulting). A
potential source of revenue are our “e-services” (MandrakeExpert,
MandrakeOnline), but as yet they do not provide significant revenue
for the company.

What is MandrakeSoft’s business model?

This question boils down to: “Why does MandrakeSoft release, for
free, a product that was costly to produce yet which allows others
to copy, modify and resell it?” It does seem a rather curious way
to run a business, but there are important reasons for doing

From an ethical point of view, much of MandrakeSoft’s success is
directly attributable to the Free Software community. The Mandrake
Linux distribution is composed of thousands of Free Software
applications, so it is normal for us to contribute back to the
community of developers & users by providing the source code
and even the entire distribution. The advantage of this is based on
MandrakeSoft becoming an important part of the community — when
community members benefit, they enthusiastically promote the
distribution thereby allowing Free Software to flourish even

From a business point of view, the Free Software approach has
important advantages for the long term. With an attractive product,
easy availability and positive word of mouth, it is possible to
quickly acquire a large base of users. This approach has allowed
Mandrake Linux to quickly become well-known and one of the most
popular Linux distributions used throughout the world. The Free
Software model requires a much smaller initial investment and much
less time to produce results than with more traditional

Several recent surveys have shown that this is a smart

Linux.ie (Ireland) - July 2001
Which distribution do you prefer?
1. Mandrake: 35%
2. Debian: 23%
3. Redhat: 18%
4. Suse: 18%
5. Caldera: 1%
6. Corel: 1%
7. Others: 1%

PCMag.com (US) - 8 October 2001

What's your favorite Linux distro?
1. Mandrake: 43.78%
2. Redhat: 27.9%
3. Suse: 15.41%
4. Libranet: 1.42%
5. Other: 11.49%

Linux.com (US) - 24 September 2001
Best distribution for beginners
1. Mandrake - 36.7%
2. Redhat - 33.5%
3. Suse -13.5%
4. Slackware - 5.6%
5. Debian - 4.6%
6. Caldera - 3.7%

A powerful community (including both the end-user and company)
offers both non-financial and financial advantages.

The non-financial advantage are…

A user base populated with experts who freely contribute to
improving the distribution. Also, happy users readily promote
Mandrake Linux to friends, family and employers. These advantages
significantly lower the cost of development & promotion needed
for a product.

And the financial advantages…

A good portion of the user base isn’t satisfied with just a
Linux distribution that is available for free… they want more.
Historically, Linux companies were created so that they could
provide official commercial products with support, documentation
and third party software. Other services were then offered —
mostly for corporations — such as extended support, training and
consulting. MandrakeSoft’s revenue model is based on fulfilling the
needs of its users (end user or corporate) by providing the
appropriate solutions directly or with the assistance of a partner.
This is why MandrakeSoft has recently launched MandrakeExpert,
MandrakeOnline and MandrakeStore, and is currently working on
developing other potential revenue streams.

The bottom line: We believe it is much easier (and satisfying)
to turn a happy user into a customer, than it is to directly
acquire a new customer.

Is MandrakeSoft profitable?

As with most young corporations, MandrakeSoft has invested a
great deal of money and resources to develop its products and
services. The early stages of a company are always costly; this
initial cost is later offset by a growth in revenue. MandrakeSoft
has not yet reached the “break-even” point; however, we have taken
necessary steps to reach this point in early 2002 by increasing
revenue and reducing costs.

Why a Mandrake Linux User Club?

The Club provides an attractive answer to a simple issue:
MandrakeSoft needs to have its costs covered by revenue. With the
current economic slowdown and recent world events, companies are
finding it much more difficult to sell software, provide
money-generating services, and to find funding. This means that
MandrakeSoft’s revenue growth will take more time than was
previously planned.

MandrakeSoft already has several million users. Of these users,
only a small percentage have purchased products or services from
MandrakeSoft. However, most of these users are very happy with the
distribution and our online family of websites. Are these users
ready to contribute financially in order to preserve these great

For the short term, the Mandrake Linux Users Club is the most
efficient and convenient way to directly support the Free Software
activities of MandrakeSoft; this will avert the company’s need to
cut costs in areas that are not directly related to business
ventures which would thereby lower the level of service to the
large base of “Free” users of Mandrake Linux.

I already purchased a Mandrake pack, so why am I not a
member of the Club?

Funds generated by the sale of commercial products, such as the
PowerPack, are distributed through many channels: the retailer, the
wholesaler, the shipper, the printer, the CD manufacturer, the
package assembler, the support-line, retail salespeople, and
others. So in the end, a very small portion remains to fund
research & development of the distribution.

Take an active role in the Mandrake Linux adventure as
we build a worldwide technology solution that is attractive, open
and free for all. Join the Mandrake Linux Users Club

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