MandrakeSoft has defended its drive to sign up members to the "Mandrake Club", saying that new kinds of software demand new business models.
The membership drive has drawn criticism over the past month from those who argued it was not an appropriate tool for a profit-making company. Some members were also upset when, shortly after launching the membership drive last month, MandrakeSoft began offering Sun's StarOffice software only to higher-level subscribers.
MandrakeSoft is just one of many companies, including Linux distributors SuSE and Red Hat, seeking a way to stay true to the "free" nature of Linux and still deliver profits. MandrakeSoft is considered one of the more community-oriented Linux distributors, but has had to strike a balance between the open-source community and the interests of its identity as a profit-driven public company.
In a statement on MandrakeSoft's Web site, chief executive Jacques Le Marois said that Free Software such as Linux requires something different from the traditional product-selling model -- partly out of necessity, since the commercial Linux market is not yet strong enough to make MandrakeSoft profitable. Free Software, also known as open-source software, is distributed under a licence which requires that any developer is able to freely download, modify and redistribute it.
Le Marois argues that the best way to ensure profits from open-source software is to supplement traditional retail sales and value-added services with revenues that come directly from the open-source community. "It's better for everyone if, for each user's particular need, there is an attractive offer with an associated revenue model," he stated.
Mandrake Club is aimed at more advanced Linux users who have no need of the CDs and manuals included in the retail version of Mandrake Linux, but tended to buy it anyway as a way of supporting the company, Le Marois said.
Relying entirely on boxed software tends to go against the grain of Free Software, he argued: "A Linux producer whose development depends on box sales will tend to restrict the free distribution of its products." Such companies often add proprietary components to their software that can't be freely distributed and modified, don't provide the software in an easily downloadable form or delay the online availability of the software until the boxed version is ready, Le Marois wrote.
MandrakeSoft's own policy is not to restrict distribution of its software in order to increase boxed sales. For example, version 8.2 of Mandrake Linux is now available online, although it won't arrive on store shelves for a month. "Those who wish to have free access to our products directly on the Internet will find that the Club is the best answer for them," stated Le Marois.
Some subscribers voiced confusion when MandrakeSoft last month began offering downloads of StarOffice 6.0, a partly proprietary product, to members with "Silver" status and above, leaving out basic-level members. Some members wrote to ZDNet UK or MandrakeSoft saying that it was unclear whether their membership should be thought of as a donation, or if they should expect benefits such as software downloads in return.
Some members said that MandrakeSoft's description of the club is ambiguous. In launching the club last November, for example, MandrakeSoft said it was trying to dispel the notion of "donations", which wasn't seen as business-friendly, by instituting subscriptions that offered benefits such as voting rights, product discounts and privileged access to Mandrake team members.
However, the club was still described mainly as a way of supporting Free Software. "The primary purpose of the Club is to directly fund Free Software development and our community-related initiatives," the November statement said. "Your membership fee ensures that MandrakeSoft maintains a high level of commitment to these topics."
Le Marois again emphasised that the club shouldn't be thought of as "a donation or public charity system", describing it as "a new concept of financially contributing to software and services with the goal of keeping it in the Open Source spirit."
Ultimately however, MandrakeSoft's financial success will rest with the sales of value-added products and services such as software support, as Linux becomes more popular, Le Marois stated. "The widespread adoption of Linux is creating an ever-increasing demand for value-added products and services that will progressively turn MandrakeSoft into a very profitable company," he wrote.