Mandrake acquires Conectiva [LWN.net]

March 2, 2005

This article was contributed by Joe 'Zonker' Brockmeier.

Last week, MandrakeSoft announced that it had reached an agreement to acquire Conectiva for €1.7 million in stock. The announcement shouldn't come as a surprise to anyone following the Linux industry. The market has been ripe for consolidation for some time, and MandrakeSoft and Conectiva were already working together on the Linux Core Consortium.

To get more information on the acquisition, we sat in on the conference call last week with Jaques Rosenzvaig, CEO of Conectiva and François Bancilhon, CEO of Mandrakesoft. We also touched base with MandrakeSoft's co-founder Gaël Duval about the deal and to see what it meant for MandrakeSoft.

According to Duval, MandrakeSoft's recent growth was a driving factor in acquiring Conectiva:

Mandrakesoft is growing, and that is a key factor for us. For instance, the acquisition of Conectiva results into twice more full-time developers than before at Mandrakesoft, while we are going to have a single line of products. This means that we can do still more innovative products & services.

In addition to the need for developers, Duval said that the decision to pursue Conectiva was a result of the "excellent 'cultural fit' between Mandrakesoft and Conectiva."

The move also gives MandrakeSoft a presence in a new market. Duval said that the Conectiva's presence in the South American market was "very nice for us" because MandrakeSoft had "basically no business in Brazil or South America besides a few customers on our online store." While the South American market is important, we were curious if MandrakeSoft was planning to make any moves towards the Asian market. Duval said that MandrakeSoft was "looking at every opportunity to develop there" and that the company has had some success in China and Japan because the Mandrake Linux distribution is "well localized."

Since MandrakeSoft and Conectiva made up one-half of the Linux Core Consortium (LCC), we asked Duval if the acquisition would have any impact on the LCC. Duval said that the LCC will continue as planned.

There is basically no impact. We are still planing to release a common and public core implementation of a LSB-compliant Linux distro this year in both RPM & DEB package formats.

During the conference call, Bancilhon said that the acquisition would "strengthen the LCC since we're bigger, we can deliver more technology to the LCC."

The two distributions will be merged at some point, but Duval did not give a timeline for the first joint release. He did say that it would be done "progressively," so it may be some time before the distributions are fully merged. Bancilhon said that the "convergence product" should be on the market by the end of the year.

Of course, we had to ask if MandrakeSoft had any other companies in its sights. Duval said that MandrakeSoft is "looking at every purchase opportunity for MandrakeSoft," though he did not provide any specific examples.

It is interesting to note that Conectiva is actually an older company than MandrakeSoft. Conectiva was founded in 1995, while MandrakeSoft got its start in 1998. Not long ago, it wasn't clear that MandrakeSoft would be around for the long haul. When MandrakeSoft entered bankruptcy, many believed that the company would have a difficult time staying afloat. On the contrary, MandrakeSoft finished off the last fiscal year with revenues of about $6.7 million and a profit of $1.8 million. While the company is still small compared to Red Hat and SUSE, its continued success indicates that it may still become one of the "tier one" players in the Linux market.

We're looking forward to seeing the results of the combined companies. As long as MandrakeSoft continues its commitment to releasing its work under open source licenses, this merger should be good for the Linux community in general as well as for MandrakeSoft and Conectiva.

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