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Linux Business Businesses Mandriva

Mandrakesoft Acquires Conectiva 229

Posted by Zonk from the one-plus-one-equals-linux dept.
rednaxel writes "This morning, both companies issued press releases about the merge. French Mandrakesoft is acquiring all shares of brazilian Conectiva for a total amount of 1.79 million EUR (2.3 million USD) in stock." CNet has coverage of the merger as well. From the article: "This won't elevate us to the status of Red Hat or Novell/SuSE yet, of course, but this is a significant growth for us..."
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Mandrakesoft Acquires Conectiva More

Mandrakesoft Acquires Conectiva

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  • How? (Score:5, Interesting)

    by sfraggle ( 212671 ) on Thursday February 24, 2005 @11:27AM (#11767199) Homepage
    How do they have the money to do this? Werent they almost bankrupt about a year ago?

    • Re:How? (Score:3, Insightful)

      by minus_273 ( 174041 )
      actually, how how, do they make money by giving their product away for free? I can see red hat doing consulting/support, but mandrake caters to a different market

      • Re:How? (Score:4, Insightful)

        by legirons ( 809082 ) on Thursday February 24, 2005 @04:05PM (#11770394)
        "actually, how how, do they make money by giving their product away for free?"

        They sell their product. For between $30 and $150 per box. And people like me buy it, so they make money.

        It might sound odd to buy something that you can download without charge (or buy CDs for $6), but really that's just a convenient aspect of the distribution mechanism. If I lose my boxed copy of Mandrake, I can make a copy, download, or buy a cheap copy. (Compare that to other operating-systems, where if you so much as change a hard-drive, you have to beg for permission to continue using the OS)

        It might still seem odd to pay when you can freeload, but my opinion of that is that I'm paying for the future availability of Mandrake. (just like I pay for wikipedia even though it's free) -- we're buying the ability for anyone in the world to use the best OS without charge. And that's quite different to paying for just a license.

    • Re:How? (Score:5, Informative)

      by crow ( 16139 ) on Thursday February 24, 2005 @11:32AM (#11767258) Homepage Journal
      It's a stock swap. No money is involved. This is typical of how mergers often work. The companies agree to merge, and they agree what the company being acquired is worth, do some math, and convert the shares of the acquired company into shares of the new company. The math is much like doing a stock split, though the ratio usually involves a number of decimal points. (The accounting for the investors is also much like a stock split.)

      The real question in this case is why is Mandrakesoft's stock worth enough for Conectiva investors to consider this to be a worthwhile deal (as opposed to grabbing on to a sinking ship). I haven't looked at the business side of either company, so I can't comment there.

      • Re:How? (Score:2, Interesting)

        by morcego ( 260031 )
        I find this particularly intriguing, since ABN-AMRO Bank has been the major shareholder (50%+) of Conectiva last time I checked. Most than US$ 2Mil worth of stocks.

        Anyone knows how much (if anything) of Mandrake stocks are held by ABN ?

        Looks like (from the numbers) Mandrake is getting only the remaing stocks still help incompany by the original founders of Conectiva.

        Unless there is some big involvment of ABN on Mandrake, I find this all very strange.

      • Re:How? (Score:3, Informative)

        by ThinWhiteDuke ( 464916 )
        You're mostly right, it's a paper transaction that does not involve cash. The seller is paid in Mandrake stock, not in cash.

        Yet your analogy with stock splits is erroneous. In a stock split, nothing really happens. Each old share becomes 2 or 10 new shares. It's just a story of splitting the cake in more pieces, but everybody still has the same proportion of the cake. An investor that used to own 1% of the stock will own twice (or ten times) more shares but still own 1% because the total number of out

    • Mandrakesoft = (very) profitable company (Score:5, Informative)

      by joestar ( 225875 ) on Thursday February 24, 2005 @11:57AM (#11767561) Homepage
      From the PR: "Mandrakesoft, founded in 1998, is the internationally recognized number one European Linux company. Mandrakesoft has built its business by designing and delivering user-friendly Linux products to both individuals and businesses, building a user base of more than 4 million users. In its latest fiscal year, Mandrakesoft's revenues reached 5.18 million EUR (6.7 million USD) for a net income of 1.39 million EUR (1.8 million USD)."

    • Re:How? (Score:2, Interesting)

      by ReverendLoki ( 663861 )
      Actually, I think it was 3 or 4 years ago, but not only were they almost bankrupt, they actually were in bankruptcy in the French court system. They got their act together though, and have come completely out of bankruptcy, and I believe have been in the black for a while now.

      As far as I know, their main sources of revenue are from consulting, corporate support, some value added like packages of various proprietary closed-source software to their OS, and through their club membership program. I understa

      • not only were they almost bankrupt, they actually were in bankruptcy in the French court system.

        Actualy what MandrakeSoft did was asking for bankrupcy protection, which is different to bankrupcy. With this protection, MandrakeSoft was able to straight up its financial situation, went back to normal and now is profitable again.

        Peace!

    • Re:How? (Score:3, Informative)

      by papaia ( 652949 )
      How? - simply: it's people like myself, who have identified them as having a proper business model ( Mandrake Club subscriptions [mandrakeclub.com] + a well established support community [vmlinuz.ca] + very good paid support [mandrakeexpert.com] + products which fit every requirement I had, in time, and within costs (e.g. latest being the 64-bit CPU support among the first distros), who have then - provided the finacial support they needed (as a result of their services, of course)
      ... and when the US economy got derailed but its leadership, a small migration
      • a small migration of my money, from US stocks, into MDKFF stock, came to prove to me, in time, that they also knew and know HOW to make money ;)

        Exactly. For those of you who are visually-oriented, A graph [yahoo.com]

        I think Mandrakesoft knows it's core customers and treats them right. Connectiva could probably have found another bigger fish to latch onto, but probably not one so much inline with the core value of their customer base also.

    • Re:How? (Score:3, Interesting)

      by DCowern ( 182668 ) *

      How do they have the money to do this? Werent they almost bankrupt about a year ago?

      First, their financial situation was never as bad as it sounded. They had no money and couldn't fulfil debt obligations because a previous board of directors had moved them into to many business areas that were too far removed from their core business model (which has always been selling support and services to corporations).

      Once they axed the former board, ceased unprofitable ventures, and got back to their core pro

    • prolly the strong euro lets them buy things in brazil for 1/4 the price.
      • The "Euro strength" is only high compared with US Dollar. Compared to other currencies, is not such high.

        It is the US Dollar which is very low compared to Euro. It is not the Euro being very highly priced everywhere else.

        Peace!

  • New Name (Score:3, Funny)

    by Conorb ( 443598 ) on Thursday February 24, 2005 @11:28AM (#11767215) Homepage
    Mandrakiva ?

  • What does MandrakeSoft gain? (Score:4, Interesting)

    by kevin_conaway ( 585204 ) on Thursday February 24, 2005 @11:30AM (#11767238) Homepage
    I'm not terribly familiar with Conectiva. What does the Mandrake distribution gain with this merger? Just more experienced developers or did Conectiva have certain features that made it attractive? Or are they just combining forces?
    • Conectiva is big in South America. By merging, they extend their sales base. In addition, each of them have talented individuals on board that will hopefully create an even better OS.

    • Re:What does MandrakeSoft gain? (Score:5, Informative)

      by Anonymous Coward on Thursday February 24, 2005 @11:46AM (#11767421)
      Brazil's government announced earlier this year it was planning to switch 300,000 PCs from Windows to Linux. I don't know if any contracts have been signed already, but I guess it's not unlikely they would favor a distributor based in Brazil (similar to when the city of Munich went with SuSE).

    • Re:What does MandrakeSoft gain? (Score:5, Informative)

      by Coryoth ( 254751 ) on Thursday February 24, 2005 @11:47AM (#11767439) Homepage Journal
      I'm not terribly familiar with Conectiva. What does the Mandrake distribution gain with this merger? Just more experienced developers or did Conectiva have certain features that made it attractive?

      Well Connectiva were one of the first distributions to embrace apt-rpm (they may even have done a lot of the development work, I can't recall) and provide some of the major development impetus behind Synpatic [nongnu.org] which is far and away the best GUI package manager around. As far as I am concerned what Mandrake could gain from Connectiva is a move to apt-rpm and Synaptic. I know URPMI has a lot of fans but I think apt and Aynaptic may be the way to go for pakcage management. It helps standardise things as well - all the Debian based distros use apt, and several use Synaptic by default as well, and despite yum being the default apt-rpm and Synaptic is very popular on Fedora, and even SuSE (instead of YaST).

      At the very least I hope Connectiva stays with apt-rpm and Synaptic. I would hate to see them shift to URPMI at this stage.

      Jedidiah.
    • I would say Mandrake gains a foot hold in Brazil.
      Brazil is a big country. With a lot of resources. Often people in the northern hemisphere forget that that that there is another half of a world. Could they become the Linux of South America?
    • Conectiva have offices and clients in Southamerica, so the gained presence in this region. In Argentina Connectiva was very big because they were the first to market a commercial linux in Spanish as default language. Then they closed offices in Buenos Aires and people migrated to other linuces that also had Spanish version (almost all of them now!). But they are still strong in Brasil.
    • Perhaps they're interested in a foothold in the Brazilian market. I would be if I ran a distro company.

      The Brazilians are rabid about free (libré) software and they have a growing economy. Check out Lessig's blog about his trip there.
      • Just a note: in Brazil we speak Portuguese, not spanish.... we dont' say "libré" here.... we say "livre"

        • Just a note: in Brazil we speak Portuguese, not spanish.... we dont' say "libré" here.... we say "livre"

          Point taken, but you're on an English board. :) We say libré because we have no word for free-as-in-freedom aside from 'free' which usually means 'gratis', I wasn't trying to put words in the mouthes of the Brazillians.

          I hadn't realized it was borrowed from Spanish; I assumed it was Latin, but it looks like that's 'liber'. I invite the classics majors to jump in now and provide all the rele

  • Uh oh... (Score:2, Funny)

    by yuckysocks ( 806608 )
    MandrakeSoft, why, you could abbreviate that MS. And MS is aquiring companies and getting bigger?
    I think I just felt my knee jerk a little bit...

    *Runs for the hills*

  • Been with Mandrake for years (Score:5, Interesting)

    by kbahey ( 102895 ) on Thursday February 24, 2005 @11:40AM (#11767360) Homepage

    Being a Mandrake user for several years, I am happy to see that they overcame their financial difficulties and are in a position to expand.

    Apart from the botched 9.2 upgrade debacle, they have a distro that I can use for a Linux home network [baheyeldin.com] without spending too much time on it. I have four machines running Linux at home, and don't want to spend a lot of time on each configuring it.

    They are also familiar and friendly enough for my kids to use it as their only desktop. They get to play their MP3, use FireFox or Konqueror, use Open Office for homework, ...etc.

    Moreover, it is also perfectly good as a server for LAMP, Samba, ...etc.

    Go Mandrake!

    • Being a Mandrake user for several years, I am happy to see that they overcame their financial difficulties and are in a position to expand.

      If you were an investor, your opinion would be different. They bought free code. Brilliant.

      • I am not an investor, just a happy user.

        Regarding "they bought free code", I think it is not what this is about. My guess would be that they bought a brand, marketshare, geographical penetration, and minshare.

      • No, if you actually RTFPR (press release), you'd see that Connectiva had $2.2 million in revenue last fiscal year and broke even. And with big customers like the Brazilian army, they're in a good position to turn a profit this year.

        Mandrake made a good power move into the South American Linux market with the market leader, dipshit.
      • Anyone that still believes it is about buying and selling code is compltetely deluded.
    • Mandrake is a company from France. They put a lot of efforts to document and translate Linux applications in french for their own market. I think their acquisition of Conectiva follows the same logic. Portuguese speaking people should be pleased by the announcement since it means more applications will be available in their own language.

      I'm from Quebec and my primary language is French. I do not use Mandrake Linux but I feel their implication in the Linux movement improved my own experience. Vive Mandr
  • Will the resulting Linux distribution use apt-rpm or urpmi?

  • Kicking MS out of the 5th largest country? (Score:5, Funny)

    by gelfling ( 6534 ) on Thursday February 24, 2005 @12:16PM (#11767766) Homepage Journal
    What with the Brazilian government wanting to kick MS off all government desktops, the fact that a disproportionate number of distros come from Brazil & it's the 5th most populous country in the world I'd say it's somewhat strategic in nature for Mandrake to do this.
  • Looking quickly at this story in my RSS reader, I saw "Microsoft acquires Connectiva"....

  • Quality of Mandrake Nowadays (Score:3, Informative)

    by Rocko Bonaparte ( 562051 ) on Thursday February 24, 2005 @02:19PM (#11769100) Homepage
    I'm surprised to hear about this because I, too, thought Mandrake was knocked out. They were going through some financial troubles awhile back--this has already been mentioned. At the time, I was using Mandrake 9.2 and was having a good time of it. Outside of butchering the apache configuration as a learning experience, it's administrative tools took care of everything.

    I guess a distro is only as good as the hard disk it sits on, and I discovered it was on a DeskStar . . . when it died. I put an install of Mandrake 10 on drive it was RMA'd and returned. This didn't seem to be a very mature OS. I couldn't choose what to install, and later found out it didn't include gcc. I installed that only to find it couldn't successfully compile anything! I've since switched to SuSE at home bceause that's what we use at work. While that had its own problems, most of it would have to be blamed on my home CD-burner dying (bad luck lately).

    I hear there's a community edition ISO along with something else. Whatever I got might have been the junkier of the two. Either way, it left a very sour impression. I'm surprised they're still conducting business, but the best of luck to them.

    • Re:Quality of Mandrake Nowadays (Score:4, Informative)

      by Mark_MF-WN ( 678030 ) on Thursday February 24, 2005 @05:46PM (#11771650)
      Where've you been? Around that time, most distros were having some growing pains. There have been some major architectural changes in how a Gnu/Linux desktop box works. Mandrake and Fedora, being among the most progressive distros, went through a lot of difficult changes.
      • There have been some major architectural changes in how a Gnu/Linux desktop box works.

        Just out of curiosity, could you name a few of the major ones? (I've been running Linux, mostly mdk, since '99, but my involvement in the nuts and bolts of my distro has been rather on-and-off).

        • There was the switch from XFree86 to xorg, the switch to the 2.6 kernel, the switch from the old-school /dev system to DevFSD and then to UDEV, and the introduction of the hotplug system. CUPS has been evolving quite a bit, with huge numbers of new drivers and graphical interfaces to support desktop use. Xorg has changed a lot even over the relatively short period since its inception; in the first few months there were dozens of major patches introducing new modules. The X font system has changed substan
    • I couldn't choose what to install, and later found out it didn't include gcc. I installed that only to find it couldn't successfully compile anything!

      The only version of Mandrake that doesn't include compilers is the Discovery Edition, which is not avialable for download. But, even on Discovery, you can use online urpmi repositories to install any software you like.

      Since this seems to be your main argument, the rest of your post is really invalid.

      Please try a bit better with your next troll.

  • Nice merge ... (Score:4, Interesting)

    by wagner_bila ( 796889 ) on Thursday February 24, 2005 @02:58PM (#11769575)
    Well, i have Mandrake Community 10.1 installed on my linux box (my notebook) and i always heard good things about Conectiva and its developers. Since i'm also brazilian, i feel very greatful with the fusion ... i think some good products can be build now on with this merge. Also Brazil has a strong movement to the open source software and the open source initiative and also has a great potential to grow too ...

  • My note on Mandrake Usability.. it 'just works' (Score:3, Interesting)

    by hyfe ( 641811 ) on Thursday February 24, 2005 @08:49PM (#11773029)
    I'm posting this from my dell inspirion 8200 laptop running Mandrake 10.1. Mandrake installed advanced power savings, sound, network (including wireless with a little extra work) and graphic card automatically no-hazzle. This is alot better than what the other distroes I've tried have managed. (and yes; I'm one of the funny people who prefer that things 'just work')

    Debian; I never managed to get the ATI drivers to play nice with my card (and this wasn't for lack of trying)

    Fedora didn't want to give me sound, nor did it give my laptop power-savings.

    Suse I never tried, and compiling/Gentoo is out of the question.

    • If you do a default installation, you cannot compile a kernel. And, I've had one heck of a time getting anything other than the included applications running. I'm sure lots of that is operator error, but still, for the "easiest" Linux distro out there, it still can't quite get to Windows' installation ease.

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