After continued financial losses, Mandriva French-based global Linux distributor has fired a number of employees including one of its founders, Gael Duval. While the company has yet to spell out who has been let go, news of the firing rapidly spread on the Mandriva Club forum, an official Mandriva Linux community site.
Duval, who was mentioned by name as one of those who was fired, confirmed on his blog on March 13th that “Since the information has leaked, I will post a message in the next few days on this website (or mirror) about why this is the end of the Mandriva story for me, and what’s next.”
Sources close to the company said that the firings were not confined to any single area of the company. The company foreshadowed this move in its financial report for the first quarter.
In this report, the company declared that “Mandriva’s financial results for the first quarter of 2005-2006 are disappointing.” To deal with this, “a swift reaction was required to address the problems and we have already set up a two-pronged strategy.”
“The first set of measures aims to cut costs. They include redundancies in France and Brazil and the termination of certain expenses judged to be non-essential. These initiatives have already been implemented and the resulting restructuring costs will be booked in the second quarter of the current FY (January to March 2006).”
Mandriva also announced that Jacques Le Marois has stepped down as chairman of the board, and that he has nominated current CEO Francois Bancilhon as chairman. The company expects this change to be approved at its next board meeting on March 31st.
This last move is seen by some of the Mandriva faithful as a move away from Mandriva’s roots as a community-based distribution towards being more of an enterprise-oriented company. The financial report suggests that this might be Mandriva’s best move. The company reported both a “downward slide of sales in the retail market” and “Enterprise services are up sharply to represent 42% of consolidated sales over the quarter, compared to 24% in Q1 2004/05.”
Mandriva has had a difficult financial history. The company went “redressement judiciaire,” the French equivalent of US Chapter 11 bankruptcy protection in January of 2003 and only emerged from it in March 2004.
It then went on a brief acquisition run. During this time, it acquired Brazilian Linux vendor, Conectiva, and Lycoris, a small U.S. maker of user-friendly desktop Linux distributions, and then changed its name from Mandrakesoft to Mandriva.
The company also started to move away from a community-oriented distribution to servers and desktops for the enterprise. It has had some success in this area, as indicated by both its finances and its partnership with Hewlett-Packard Co. to provide Linux systems in the Latin American market, but these were not enough to stave off the company’s reductions-in-force.
Will these changes be enough?
One analyst, Gordon Haff, senior analyst for research house Illuminata Inc., doesn’t think so.
“The ‘Man’ part of the operation has always been sketchy as a commercial enterprise. And its community support as a favorite for desktop Linux has long since passed to other distributions like Gentoo. Indeed, whatever advantages Mandrake once had for the desktop have been erased by the mainstream distros,” said Haff.
Haff continued, “while there’s clearly a place within the broad open-source communities for many different distros serving many different needs and styles, the opportunities for profitable Linux distro ‘companies’ are far more limited. At this point in the Linux adoption and maturation cycle, it’s hard to see what compelling advantages Mandriva delivers that make it a good alternative for enterprises, [compared] to Red Hat and Novell SUSE.”
A version of this story first appeared in DesktopLinux (http://www.desktoplinux.com/news/NS6477797669.html).