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Mandriva reports its 3rd Quarter results
Mandriva reports its 3rd Quarter results Paris, November 18th 2008 - Mandriva today reported its financial and operating results for the 3rd quarter 2008. Turnover for the quarter is 0.83 million Euros, trading revenue is 1.04 million Euros, costs are 1.67 million Euros and the operating loss is 0.64 million Euros. Turnover and operating results, compared with the 3rd quarter 2007, were 29 per cent down, costs fell by 5 per cent. The company underlines the prudent management of operating costs which fell by 5 per cent. Mandriva's continuing operations reveal a loss of 1.17 million euros YTD . The trading loss for the comparable period is down by more than 50 per cent. Turnover was affected by lower-than-expected OEM trading which remains a significant sector for short and mid-term development for Mandriva. The OEM (Original Equipment Manufacturer) turnover represents 17 per cent of the total, the business turnover comes to 64 per cent, and the Community (Linux users) turnover makes up 19 per cent. Mandriva Mini, a solution devoted to OEMs and ODMs (Original Design Manufacturers), represents a major growth route. Improvement actions include the distribution of the first Mandriva-based Netbooks following the last road book schedule. The business market saw the highly successful deployment of Pulse 2 across 18,000 machines which is currently being extended to 85,000 machines on 1,200 sites. With more than 100,000 machines, Pulse 2 is the open source leader in heterogeneous IT stock management. A large number of public and private sector organisations in Europe, notably those having planned a migration to Vista® or Linux, have expressed an interest on Pulse 2. The Community sector has seen new revenue growth through a system of affiliations. Mandriva Linux 2009 was launched in October and Mandriva Flash 2009 is scheduled for release in December 2008. About Mandriva Mandriva, formerly known as Mandrakesoft, is the publisher of Mandriva Linux, an easy-to-use and innovative operating system. It is one of the most popular Linux editions in the world. Dedicated to making open source technologies accessible to all users, the company offers a full range of products and services to individuals, enterprises and government organizations. Mandriva products are available online in 80 languages and in more than 140 countries through dedicated channels. Headquartered in Paris, France, the company is publicly traded on the Euronext Marche Libre. More information at http://www.mandriva.com (Log in to post comments)
Mandriva reports its 3rd Quarter results Posted Nov 18, 2008 20:24 UTC (Tue) by kragil (subscriber, #34373) [Link]
Hmm, somehow that does not sound very peachy.. but still it is amazing what they accomplish with just 1.67 million Euros.
Mandriva reports its 3rd Quarter results Posted Nov 18, 2008 20:33 UTC (Tue) by jspaleta (subscriber, #50639) [Link]
The 1.17 million euro question is.. how does Mandriva's operating loss compare to Canonical's...and which company is vectoring towards break-in faster?
-jef
Mandriva reports its 3rd Quarter results Posted Nov 18, 2008 20:54 UTC (Tue) by sbergman27 (guest, #10767) [Link]
In that vein, the smart money would definitely be on Ubuntu. (Though it's encouraging that Mandrake did survive its years in bankruptcy.) Name recognition rivaling, if not exceeding, that of Red Hat is going to turn out to be exceptionally valuable and important for Ubuntu in the coming years. My guess is that is why you, as a Red Hat guy, have such a chronic case of "sour grapes" regarding Ubuntu's popularity, rather than taking a "we are all one Linux community" view as I prefer to do. Red Hat took the "easy" path to making money with Linux: Cannibalizing the Unix market for servers, and has done well at it. Canonical is taking a more difficult path by pursuing the desktop market, and making good progress. Though Linux is not going to be an economic success on the desktop for anyone for a while yet.
Mandriva reports its 3rd Quarter results Posted Nov 18, 2008 23:22 UTC (Tue) by jspaleta (subscriber, #50639) [Link]
I think you are correct in that Red Hat isn't really a good point of discussion about the linux desktop business. Which is why I didn't bring them up.
I think that Mandriva and Canonical are a much better side-by-side "small" business comparison at this moment in time. Which of these two companies is doing things the right way to build a sustainable business? Which one is moving forward towards profitability? Unfortunately we don't have any concrete information on Canonical's operational losses like we do with Mandriva so we can't draw the most interesting comparisons concerning each companies ability to manage their resources so that they are vectoring towards profitability.
More generally I don't think you or I hold enough standing for our personal opinion about the profitability of the Linux Desktop. Here let me quote someone who should have a better idea of the business opportunities of the linux desktop market.
quoting: http://news.cnet.com/8301-1001_3-10075890-92.html :
Is Canonical taking on the Desktop market? really? Shuttleworth even says that you can't make money by selling a Desktop operating system....and that Canonical is going to profit from a services oriented business. That statement is just the first of many interesting comparisons with Mandriva's business approach on how to build a sustainable business.
So what are Canonical's profitable services? Does Canonical's Landscape service count as Desktop oriented service? Is that service's revenue vectoring towards being profitable in a way that can drive Canonical's desktop oriented work? How does it directly compare to Mandriva's pulse service offering?
Any idea what the revenue versus expenses look like for the Canonical support offerings for Dell hardware? How many people who buy Ubuntu branded Dell laptops or desktops are buying the extended support contract from Canonical? Is that support offering a profit center? How much money does Canonical make or lose on each Ubuntu install system purchased at Dell? What's the profit margin there, and is it big enough to be a profit center which drives other work Canonical is doing?
Beyond the desktop, how both companies are approaching the netbook oem opportunity is another interesting comparison. Mandriva is in the oem netbook space as well as Canonical.
-jef
A profitable Linux Desktop distro? Posted Nov 18, 2008 23:34 UTC (Tue) by dowdle (subscriber, #659) [Link]
Mr. Shuttlesworth recently announced that if Canonical decided to focus on the server side only, that he'd estimate that they would be profitable within two years. Since they aren't focusing exclusively on the server market it is important that he also stated that he plans to fund the project for another 3 - 5 years.
Speaking of Linux on the desktop, see this article:
The extremely vocal desktop Linux tinority
According to the author, you can forget about Linux on the desktop. The marketshare is so small, he came up with a new term: tinority... too tiny to be a minority.
I don't necessarily agree with his comments or conclusions but he does have a point.
I've been using Linux as my primary desktop OS since 1995 and I love it. I have converted a small handful of folks... but I'm not sure how long Linux on the desktop is going to take. I don't really care what its marketshare is as long as it continues to improve and it works for me. :)
I can't really point to anything that Mandriva has done wrong (getting back on-topic) so it is just more evidence that making money from desktop Linux is indeed quite challenging.
Mandriva does have a server product. I wonder what the sales breakdown of their desktop products vs. their server products.
Regarding taking the "easy" or "hard" road... you have to also put this stuff in historical context. Red Hat started a lot longer ago than both Mandriva and Ubuntu. When they started I don't think there were any roads... much less easy or hard ones. When Ubuntu started, Red Hat was already well established (along with Novell) as a server OS. How easy a road would servers be for Ubuntu? It's hard to say.
One difference here is that Red Hat, Novell, and Mandriva (just to name a few) are public companies who have to report their earnings. Canonical does not. It is easier to get a progress report when you have data to go on. The only numbers that Canonical has released, that I'm aware of, are about how many free users they have. They have not given any numbers on paying customers. Those are the important numbers. With regards to profit, it doesn't matter much how "popular" the non-revenue generating desktop usage of Ubuntu is. Perhaps they can gain a lion's share of the tinority via their non-paying customers... but can you really call that progress? Mandriva wouldn't call is progress.
A profitable Linux Desktop distro? Posted Nov 18, 2008 23:48 UTC (Tue) by jspaleta (subscriber, #50639) [Link]
Even the numbers Canonical touts are completely without publicly documented merit nor communicated methodology. Shuttleworth has never documented or even informally described (to the best of my knowledge) how they obtain the estimated 6 to 8 million user number.
And in a recent teleconference with the press, which I can't find a publicly audio archive of to verify against, he has been quoted as saying "We actually have no idea" with regard to the size of the install base.
ref: http://www.theregister.co.uk/2008/1/27/shuttleworth_ubunt...
If you can dig up a link to the audio of the teleconference I'd love to hear that quote in context.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 6:49 UTC (Wed) by timka.org (guest, #53366) [Link]
The link actually is http://www.theregister.co.uk/208/10/27/shuttleworth_ubunt...
A profitable Linux Desktop distro? Posted Nov 19, 2008 16:41 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
I apologize. I personally pride myself with making sure that I provide references to supporting material as appropriate. I hate it when I screw up a reference link. Thanks for providing the fixed url.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 8:34 UTC (Wed) by nix (subscriber, #2304) [Link]
You couldn't add any more negative bias to your phrasing, could you? Your
statements are so dispassionate its hard to figure out if you're pro or anti. (Also the sun is green and the government is run by moon men.)
A profitable Linux Desktop distro? Posted Nov 19, 2008 16:45 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
What? The sun isn't green?!?
Blasted NASA... they've been lying to me.
http://sohowww.nascom.nasa.gov/gallery/images/tricomp.html
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 20:58 UTC (Wed) by nix (subscriber, #2304) [Link]
Touché, I believe. :)
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:05 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
The lesson.... even NASA colors reality in their press materials. So if you are only looking at statements made to the press and there is no transparency beyond that into details you really don't know what reality is. And depending on which press materials you see.. the Sun maybe red, green or blue...but sadly seldom purple.
Transparency matters. It matters to government. It matters to publicly funded science. It matters to publicly traded companies. It matters to volunteer organizations. It matters to pretty much any situation where a small group of people are asking a much larger group of people to trust in their ability to manage shared resources and interests. Forget legal requirements... ethically and morally transparency matters. Who are your stakeholders and are you reporting to them on a timely, forthright and accurate basis concerning your ability to manage shared resources?
For publicly traded companies those stakeholders are the shareholders. Obviously. And in fact society has recognized that and created all sorts of protections and requirements to make sure companies meet a minimum standard of performance with regard to reporting.
For community based projects those stakeholders are contributors. What sort of reporting requirements should we demand in this case?
When business entities engage in the management of community volunteers, their ability to manage those contributor resources and interests can only be quantified when their is an appropriate level of transparency between the business entities resource planning as it relates to that community of contributors.
What is our standard for that? What do we expect of business entities who engage in this sort of community sheparding? There or so many companies now who are growing their own contributor communities. Who's really engaging in best practises with regard to resource planning in consultation with those communities?
So on Mandriva's part they are compelled by law as a publicly traded company to provide a minimum level of financial transparency to stockholders. I wonder if they go beyond what is strictly legally required as a publicly traded company as they relate to their volunteer contributor community. Are stockholders the only group that a company which is relying in part on volunteer contribution the only stakeholders that you have an ethical obligation to provide status reports to? Does Mandriva as a company do any publicly communicated budget or resource planning for aspects of their business which directly interact with contributor community building and asking for feedback about how those resources are allocated from the contributor-base? I don't know. I've failed to find references to that sort of thing.
On Canonical's part...they aren't even legally compelled to do any financial status reporting to stockholders. So even that level of transparency is missing. But obviously Canonical spends and budgets money
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:27 UTC (Wed) by dlang (✭ supporter ✭, #313) [Link]
why should you know?
in a public company shareholders need to know so that they can tell if their money is being spent the way they want it to, the public needs to know so that they can decide if they should spend their money buying a share of the company or not.
for a private company you have no reason other then curiosity and the desire to second-guess and criticize the owner.
you may claim that you want to know so that you can tell if the business is going to run out of money and shut down or not, but in a private company with a large, rich sponsor you can't know that unless you know the mindset and personal finances of that sponsor (and in this case, since you have publicly called that sponsor a lier why would you believe any statement of his mindset anyway)
so there's no reason for a private company to provide the information that you are asking for. (I don't believe that RedHat did it before going public either, so it's not just those evil ubuntu people refusing to give you the information.
A profitable Linux Desktop distro? Posted Nov 19, 2008 22:48 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
Time is money isn't it?
A volunteer contributor's time is a valuable resource isn't it? Something worth cultivating, something worth making use of? How valuable is it for any project? If we tried to account for all that time and turned it into an in-kind expenditure report.. what would that number look like? If a business had to pay someone for all the work their community volunteers do..how big a number would that be? How is all that community effort not an investment worthy of responsible status reporting?
And why do you insist on using the word "Ubuntu" where the word "Canonical" makes more sense?
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 23:20 UTC (Wed) by dlang (✭ supporter ✭, #313) [Link]
there is not a single origination in the world that accounts for volunteer hours and turn them into expense reports. it's just not worth the effort.
as for typing "Ubuntu" instead of "Canonical", it's shorter and close enough to the same meaning
A profitable Linux Desktop distro? Posted Nov 19, 2008 23:47 UTC (Wed) by jspaleta (subscriber, #50639) [Link]
I think you are wrong. I think there are a number of examples of incorporated organizations which make it a habit of documenting the financial worth of in-kind contributions of all sorts...including time.
Typically those sorts of organizations which make significant use of volunteers are non-profit...and there are compelling tax based incentives to want to make sure that sort of in-kind contribution of services is documented. And generally speaking there are reporting requirements for non-profits. Now of course, the rules of of in-kind contribution reporting are squishy.. but efforts are made to account for it when its deemed appropriate.
What we are seeing now in open source project management... is a pretty new model in how private business rely on a large volunteer contributor base. There are no established baseline rules for this sort of thing as to what is expected. Up till now for-profit business entities have typically been expected to deal with labor, investors and consumers....not a large contributor pool who are both a significant portion of your labor and also your consumers. We simply don't know what the best practise rules are. How do we know if the managing entity is taking advantage of their contributor base? We've no baseline standard of performance when it comes to expectations on business and contributor relations. Time to unionize.
-jef
A profitable Linux Desktop distro? Posted Nov 19, 2008 2:49 UTC (Wed) by Frej (subscriber, #4165) [Link] I've been using Linux as my primary desktop OS since 1995 and I love it. I have converted a small handful of folks... but I'm not sure how long Linux on the desktop is going to take. I don't really care what its marketshare is as long as it continues to improve and it works for me. :)I havent used linux on the desktop for that long (quite a long period of flux before ~2000). But really - i would never dream of persuading anyone to switch, I just don't believe that it's going to work somewhat effortless. I think windows is a better choice for real users. For those who won't scream when a pixel is changed (ie those who bother to changes habbits), I recommend os x.
A profitable Linux Desktop distro? Posted Nov 19, 2008 15:49 UTC (Wed) by fb (subscriber, #53265) [Link]
I use Linux since 95 as the grand-parent poster.
FWIW, here is one anecdote for you: I bought a new computer for my
They have been using Ubuntu for ? 1.5 year now, and have had no real
There have been small issues (just like they had when running XP
My points are:
2. Desktops present issues. With Linux or WinXP. In that case, folks like
(BTW, the local shop where the computer was bought does provide linux
A profitable Linux Desktop distro? Posted Nov 19, 2008 4:27 UTC (Wed) by rahulsundaram (subscriber, #21946) [Link]
From a purely (short-term) revenue generating perspective, you might not call non-paying consumers progress and in fact from that perspective, they might be considered a loss but there are certain concrete benefits towards having them in the longer term. It wouldn't make sense for say Red Hat to fund Fedora otherwise. OpenSUSE is available commercially but I don't think it is self sustaining enough on its own for justifying the continued investment from Novell. Both these projects are benefiting from the investment made from revenue generated by their commercial off shoot products and the fact that the organizations themselves are profitable.
There is a value in building a brand by giving your product freely but just because you have a popular brand doesn't mean that you will be commercially profitable. Red Hat learned that lesson with Red Hat Linux years back and Canonical which is essentially following the Red Hat Linux model is learning that as well but even for distributions (or any commercial open source project for that matter) which are currently commercially profitable, there is always a free to pay conversion challenge.
When the commercial services are optional, it makes the challenge higher but the market has grown significantly since the Red Hat Linux days and it is certainly possible that the growth of Red Hat, Novell and other vendors makes it easier to do it now than before assuming you can find way to compete with the existing vendors and offer better value to some of your users enough to convince them to buy your commercial services.
Adam from Mandriva pointed out in his blog at http://www.happyassassin.net/2008/10/28/why-i-dont-like-c... that Canonical is somewhat in a unique position in the market being privately funded but Canonical also appears to be of the understanding that desktop is a gateway to making a business on the server side rather than being profitable by itself. The lack of significant investment in upstream projects even on the desktop side might be a result of this understanding.
So, it remains a open question if any of the current vendors believe they they can become profitable or even self sustaining by being just desktop focussed or ultimately if they can. It will be the answer to that question, that determines the commercial market share of Linux on the desktop.
It should be pointed out that Mandriva has made considerable contributions (http://www.kroah.com/log/linux/lpc_2008_keynote.html) towards various upstream projects despite their current financial status.
Mandriva reports its 3rd Quarter results Posted Nov 19, 2008 9:47 UTC (Wed) by nim-nim (subscriber, #34454) [Link]
You have to be seriously out of touch with reality to claim that writing large pools of code, releasing them under free licenses, and getting them adopted by everyone (including competitors) is the easy path, while rebranding existing code, not releasing yours under free licenses, and making minimal efforts to make the your few free contributions adopted is the hard one.
Mandriva took the same hard path as Red Hat. Ubuntu courageously decided not to bother.
Jef is annoying but he has real points. We haven't seen you answer his questions, so why should he not keep asking them?
Mandriva reports its 3rd Quarter results Posted Nov 19, 2008 11:28 UTC (Wed) by Los__D (guest, #15263) [Link]
No, the 1.17million question is: Why do you feel the need to slam Canonical/Ubntu constantly?
Spend the time improving your own junk instead of trying to rip a better product.
Mandriva reports its 3rd Quarter results Posted Nov 19, 2008 12:41 UTC (Wed) by kragil (subscriber, #34373) [Link]
100% agreed.
Editor can we have a jspaleta filter?
Mandriva reports its 3rd Quarter results Posted Nov 19, 2008 13:56 UTC (Wed) by DYN_DaTa (guest, #34072) [Link]
I'll sinceresly prefer an ubuntu's news filter: i'm getting sick of reading everywhere about it, really.
Mandriva reports its 3rd Quarter results Posted Nov 19, 2008 14:25 UTC (Wed) by michaeljt (subscriber, #39183) [Link]
Ubuntu comment filter? The article was about Mandriva :)
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