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Our recent announcement concerning the creation of a joint lab with Turbolinux has generated some controversy. Even PJ, from Groklaw, a site we like very much at Mandriva, showed some concerns and signaled her intention to stop using our Distro.

So I would like to clarify some points:

1. Signing he Manbo Labs agreement does not change anything to our policy or our commitment to Free and Open Source software and our position with respect to software patent, nor does it change anything to the statement we made about Microsoft partnerships.
2. Our position about software patents is that software should not be patented and we have supported in Europe the fight against software patents.
3. Our support for principles of open source remains what we have always stated

• • everything we develop and distribute is under GPL
  • we develop, maintain and distribute for free a pure GPL distro (Mandriva Free)
  • we develop, maintain and distribute for free a live and light distro (Mandriva One)

1. We are aware and acknowledge the Turbolinux position with respect to Microsoft, and we know that it is very different from ours. The agreement is written so that Mandriva can fully maintain its commitment to Free Open Source.
2. As for Manbo Labs:
   1. The scope of work is about 100 low level RPMs, all in GPL
   2. Product will be available for public release under GPL
   3. Development is public, made on our Cooker environment and associates the community

So we believe that, by setting up Manbo Labs, we are contributing to the development and use of Linux and Free and Open Source software.

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2007 was a challenging year during which we made major progress:

• We went through a new capital injection in the company. It was a complex and long process, but it went smoothly. In the process, we gained a new major shareholder with an important stake in the company: Occam Capital is now seriously involved and our reference shareholder. Many of our major shareholders also participated in the round.
• We acquired Linbox, a French free software publisher with excellent technology and references. We have now properly integrated the Linbox team: we created a Corporate Business Unit, which includes Linbox and the Mandriva employees working on the French corporate market. We have defined a road map for Pulse 2.0, convergence between the original Mandriva Pulse product and LRS, Linbox Rescue Server. The first installments planned in this road map have been delivered and are being deployed on customer sites. We have won several new major customers with this technology: we are for instance deploying the system for a French customer who will use it to manage 90,000 desktops, and we’re very proud of this deal.
• 2007 was the year when the first low cost computers finally made it to the market, focusing on emerging countries. The OLPC is on the verge of making a real impact on the market, the Intel Classmate made an interesting debut, and the Asus Eee is a slick and interesting machine. We put a strong focus on OEM agreements in emerging markets and saw results in countries such as Brazil, Argentina or Nigeria, through agreements with companies such as HP, Positivo, Qbex and Intel.
• We drastically changed our traditional Linux distribution business: the product line was simplified, a strong focus was put on our free products (Mandriva Linux One and Mandriva Linux Free) and on their easy download, prices were drastically reduced, Mandriva Club membership became free, we invested a lot in improving our relationship with the community and our contributors and a complete new web site was put in place. We got a globally warm response to all these changes.
• We kept our policy of investing heavily in technology: for instance, Metisse was introduced and is now a standard part of our distro, through a partnership with the University of Paris XI which keeps investing into the technology. We were a key player in putting together a Free Software technology cluster in the Paris Region, part of the “Pôle de compétitivité Systematic”.
• We kept developing our network of partners: we added countries such as Turkey, South Korea, and Lithuania. We are happy to see the success met by some of our partners in Russia, Poland, South Korea and Nigeria for instance.

Our numbers for the last quarter of 2007 will show signs of improvements and will confirm the validity of our new strategy.

We will pursue these efforts in 2008:

• On the corporate side, we plan to confirm the positive results of the Pulse product by continuing to deliver on the product roadmap, by gaining new customers, and by starting to push the product internationally in Brazil and through our partner network.
• On the low cost computer market, we believe OLPC, Classmate and Asus Eee were just the precursors: in 2008, we will see more exciting machines, many of them in preparation right now. Linux will play a key role in there and we intend to be very active on this market. We will accelerate our effort, benefit from the continued growth of that market and should be able to announce in Q1 a major partnership in that space signed in 2007.
• On the community side, we will increase our openness, listen to the community, strengthen our relationship, improve and consolidate the free Club.
• We will keep investing in innovation: we expect to see new funding for cooperative project, such as, for instance, Deskolo, an R&D project focused on ecological management of large IT infrastructure.

So I look forward to a great 2008 year and I wish all our friends, customers, contributors, partners and users a very happy new year.

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