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Globe and Mail: Meet the new boss ... same as the old boss (not!)

Dec 02, 2000, 15:48 (1 Talkback[s])
(Other stories by Konrad Yakabuski)

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"Burney's most unCowplandesque move by far, however, was Corel's October announcement of a sweeping alliance with 'the enemy,' Microsoft Corp. Cowpland had turned Corel into Microsoft's biggest foe outside of the U.S. Department of Justice with his 1996 purchase of WordPerfect from Novell Inc. He spent millions promoting Corel's versions of the aging "productivity" software, wagering the company's future on the revamped application's ability to steal market share from Microsoft's ubiquitous Office package. Cowpland lost the bet--badly--plunging Corel $232 million (U.S.) into the red in 1997."

"Now, in exchange for $135 million in cash, the enemy will get a 25% non-voting stake in Corel and incalculable, albeit informal, influence over the Canadian software maker's future course. Burney has committed Corel to developing applications for Microsoft's much-touted .NET platform, which, if one believes the hype, will transform the way software is designed, sold and used. Burney has also given Microsoft the option of co-opting a team of Corel's best programmers to rewrite the .NET architecture to work on the Linux operating system, the freely distributed rival to Microsoft's dominant Windows. Cowpland embraced Linux a couple of years back as the next answer-to-Corel's-prayers and anti-Microsoft tack when the WordPerfect strategy exploded in his face. The Linux strategy, despite its early promise, has yet to yield fruit. So, it must be a cruel irony for Cowpland that the millions Corel plowed into developing its Linux expertise may just end up benefiting the enemy more. If so, he's not saying. (Cowpland declined to be interviewed.)..."

"With its bank account thus cushioned, talk of Corel's imminent demise has been suspended. But unless Burney is able to halt the company's losses and generate new sources of revenue, it won't be for long. 'Their current products [mainly CorelDRAW and WordPerfect] have limited prospects. So, it's difficult to see where the growth is going to come from. And prices for Linux [applications] are so low that in the short run the revenue they provide is not meaningful,' opines BMO Nesbitt Burns analyst David Wright. A new version of CorelDRAW was released this fall. The 10th edition of WordPerfect and a Linux server edition are slated for early 2001 release. But Corel needs to do much more than recycle. 'They've got to get out there and build new products that people can get excited about,' Wright says."

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