| Mandriva acquires Lycoris, boosts US presence, desktop prowess |
Jun. 15, 2005
  On the heels of its recent acquisition of Brazilian Linux vendor Conectiva and name change from Mandrakesoft to Mandriva, Mandriva will announce today that it has acquired Lycoris, a US maker of user-friendly desktop Linux distributions.
Terms of the deal were not disclosed, but Mandriva's February acquisition of Conectiva SA was valued at $2.3 million in stock.
When it acquired Conectiva, Mandriva (Mandrakesoft) said it was seeking ways to grow its marketshare, and that Conectiva offered it new commercial opportunities in Latin America, where Mandriva lacked a presence. Similarly, the Lycoris acquisition is likely part of an effort to grow Mandriva's presence and marketshare in North America, where Lycoris's desktop Linux distribution is popular and has been available on retail shelves and bundled with PCs and laptops.
A market in flux
Mandrakesoft emerged from bankruptcy in March 2004 following a year of redressement judiciaire, the French equivalent of US Chapter 11 bankruptcy protection. Under the terms of its debt restructure, the company committed to repaying creditors an estimated 4.1 million Euros (US $5 million, at the time) over a nine-year period.
Lycoris, too, has struggled, as was evident from an open letter written by founder/CEO Joseph Cheek last November. Citing lagging sales, Cheek signaled "major changes" to the company's products and future direction, and said the company had discontinued development of several new products (including Lycoris Pocket PC Edition), and had reduced its staff.
In an interview published today by DesktopLinux.com, Cheek explains that the original growth strategy for Lycoris "depended on securing an investment," which never materialized. Consequently, last fall, he "decided to switch gears and pursue a merger or acquisition."
"We solicited several candidates," Cheek says. "Mandriva was attractive to us because they had a strong sense of community and good technology, they were interested in re-engineering their desktop OS, and they had the desire and resources to back up any commitments they made."
Conectiva and Lycoris are not the only well-known Linux distribution companies to be acquired in recent years. In November 2003, Linux distribution-maker SuSE was acquired by erstwhile enterprise networking software king Novell, transforming Novell into "the only $1 billion software company with a Linux distribution and the worldwide technical staff to support it," in Novell's words.
Goal to be "best positioned player in the desktop Linux market"
Cheek is the sole Lycoris employee to join Mandriva's staff subsequent to the acquisition. However, he emphasizes that the Lycoris "core volunteer team will be welcomed as VIP contributors on Mandriva's Club, being able to continue to develop, test, and document, so Mandriva is effectively getting many new faces, not just mine."
"The plan is to merge Desktop/LX Personal with Mandriva Discovery 2006, available this fall," Cheek says. "Other bits of technology may show up in other Mandriva products, such as PowerPak and PowerPak+, Cooker, and so on, and some may take longer to integrate, but we expect to have a solid upgrade path available for purchase and/or download this fall."
"Desktop Linux isn't easy, but if it were, I wouldn't enjoy it as much as I do now," Cheek adds. "The fact that it's a challenge sometimes to create it and then sell it is what gives me some of my pleasure."
"Certainly there is a market for [Desktop Linux], and we're seeing steady growth here already. We intend to both capitalize on the existing market and grow the market in the same way -- by delivering great software. Our goal is to be the best positioned player in the desktop Linux market. I believe we're very close to achieving that goal already," says Cheek.
Interview with Lycoris founder/CEO Joseph Cheek
Read the complete DesktopLinux.com interview with Joseph Cheek here:
Joseph Cheek speaks about Mandriva's acquisition of Lycoris
Highlights of Mandriva announcement
The following is an excerpt from Mandriva's press release announcing its "acquisition of main Lycoris assets, new move on the desktop" . . .
Since its inception in the year 2000, Lycoris has established a solid reputation for developing easy to use and friendly operating systems targetted to the consumer market. For instance, Lycoris has released a full Linux OS -- Desktop/LX -- which is based on a high-quality graphical user interface and the Iris Software Gallery technology for easily adding new components to the system. Desktop/LX is often considered to be a realistic and affordable competitor to the Windows® and MacOS® operating systems, thus gaining large recognition from the American press.
Lycoris also pioneered unique Linux products for the mass market, such as a Tablet Edition and a Pocket PC edition of Lycoris Desktop/LX, which led to several partnerships with hardware vendors in Asia, including Dialogue and MoBits.
As a result of these successes, Lycoris developed a large base of users in only a few years. Paying members of this community of users number nearly 20,000. Based on the download statistics of the free products, one can estimate the overall user population to be several hundreds of thousands.
On the other hand, Mandriva, which was one of the first Linux distributions to care about the desktop and the user experience from its inception in 1998, was looking for an opportunity to accelerate the development of its desktop technologies which are key for Linux adoption both in the user land and corporate world.
Lycoris was a top candidate for this strategy, and thus Mandriva is extremely pleased to reach this agreement with Lycoris and to have Joseph Cheek joining the team.
The joint plan is now to develop a new product that will be the convergence between our Mandriva Discovery product and Lycoris Desktop/LX. Both teams have already started working on this product.
In parallel, the plan is to add into the Mandriva Club some of the unique features of the Iris Software Gallery and to create a specific space in the Club dedicated to the existing Iris Software Gallery and to welcome the former Lycoris.org user forum.
Joseph Cheek joins Mandriva to head the program that will drive these two projects.
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