"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
"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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