News
Microsoft Floats Ailing Corel
- By Scott Bekker
- 10/03/2000
If you can’t beat them, hope your competitor makes a
multi-million dollar investment to keep you in business. Yesterday the
financially ailing
Corel Corp. received a
$135 million investment from
Microsoft
Corp., joining Apple Computer Corp. as a Microsoft competitor bailed out by
the software giant.
Both Microsoft and Corel describe the investment and
agreement as a joint partnership. Corel plans to aid Microsoft in the
development of their .NET platform. Corel has experience in creating client
software, as well as network enabled office productivity software. In addition,
Microsoft may be able to benefit from Corel’s experience from their popular
Corel Draw and Corel Paint graphics packages.
In addition, Microsoft and Corel have settled some of the
legal battles between them.
Presently, Corel competes with Microsoft on two fronts:
office productivity software and desktop operating systems.
Corel develops and maintains WordPerfect, which was once
the dominant word processor in the PC world. WordPerfect is now an
entire office suite that competes with Microsoft Office on the Windows, Linux
and MacOS platforms.
Corel has also launched a flavor of Linux, Corel Linux,
designed specifically for desktop users. Based on the Debian version of Linux
and the KDE desktop environment, Corel Linux is GUI focused, helping new users
navigate the sometimes-tricky operating system.
Once a successful player in the graphics market, Corel has
fallen on its share of hard times. Its investments in developing its Linux
distribution, as well as its Java flavor of WordPerfect for network use, failed to
materialize into profitable products. This summer, Corel suffered two major blows:
its proposed merger with Borland/Inprise, a vendor of developer tools, was
called off, and Michael Cowpland, its outspoken CEO, resigned. Due to
additional difficulties, Corel was expected to run out of cash by the year’s
end.
Corel later announced that Interim President and CEO Derrick J. Burney would be permanently appointed to the role. Burney has moved through the ranks at Corel, last serving as Chief Technology Officer before taking the helm.
This
is not the first time Microsoft has made a large investment in an ailing
competitor. Microsoft shocked the industry in August 1997 by investing $150
million in Apple, then a bitter rival of Microsoft. – Christopher
McConnell
About the Author
Scott Bekker is editor in chief of Redmond Channel Partner magazine.