Corel Corporation on Tuesday (Jan. 23) unveiled a blueprint for
the future that includes a new logo, new emphasis on creativity and
a new vision: to Illuminate the Creative Soul.
Designed to reposition the struggling software vendor for
long-term growth and profitability, Corel's strategy was outlined
yesterday by Derek J. Burney, president and CEO of Corel
Corporation. The initiative includes selling off its Linux
distribution while retaining its Linux versions of its WordPerfect
and graphics software, paring down its WordPerfect offering from 30
international flavors to 4 English-language versions that will also
incorporate elements of Microsoft's .NET framework, and placing a
renewed emphasis on its graphics software, especially in the
"This strategy represents the start of an important new chapter
in Corel's history," Burney said. "It is a long-term program based
on three key principles that will form the basis of Corel's
business philosophy for the future: Dynamic Technology, Dedication
to the Customer and Disciplined Financial Management."
This blueprint for the future includes a solid foundation, a
clear plan, and space for growth through strategic investments and
acquisitions, resulting in Corel's return to profitability by the
third quarter of this fiscal year, he said. Revenues are predicted
to grow at a compounded annual growth rate of at least 20 percent
over the next three years, Burney added.
These targets are based on the objectives that have been
established for each of Corel's product groups -- Linux,
WordPerfect and Creative Products -- over a three-phased plan.
Pursuing Opportunities to Spin Off Linux
The company's expanding vision for Linux includes providing
customers with a bundled solution that minimizes the total cost of
ownership and eliminates integration issues. To realize its Linux
vision and to increase the value of its Linux equity for both
customers and shareholders, Corel is actively pursuing
opportunities to allow it to spin off the Linux Distribution
element of its Linux division while retaining an interest in the
new prospective company. Corel will continue to develop brand name
applications for the Linux operating system including WordPerfect
Office for Linux and CorelDRAW for Linux.
"We're firmly committed to the success of Linux, but our new
focus is entirely on creative products." Burney said. "Keeping it
inside Corel as a whole could hinder its potential growth."
Making Smart Decisions About WordPerfect
Corel's flagship office suite will generate significant revenues
and contribution for the company. Corel recognizes that there are
untapped opportunities within its existing user base of dedicated
WordPerfect customers and that there is a strong business in
satisfying this community.
Corel is reducing the number of WordPerfect versions from the 30
international flavors to 4 English-language versions, with a French
Canadian version for Canadian government use. This will allow Corel
to gain efficiencies and increase marketing effectiveness for each
version, Burney said.
Corel will further enhance its relationship with its WordPerfect
customers to ensure that their priorities are addressed with each
release and update to the product. Over 70 percent of the new
features and enhancements planned for WordPerfect Office 2002 --
scheduled for a second-quarter 2001 release -- are based directly
on client feedback. Corel's commitment to its WordPerfect customers
will be reflected in targeted sales and marketing programs that
will reward customer loyalty through preferred pricing and
licensing options. In addition, the company will leverage premium
sales channels to service its professional customers in the
small-to-medium sized corporate market.
Corel acknowledges Microsoft's dominance with Word, and rather
than attempting to fight head-to-head, Corel has chosen to focus on
existing users and give them a reason to upgrade. This will be
accomplished by focusing on customer needs, as well as by
incorporating elements of Microsoft's .NET framework into future
For example, instead of a static list of formulas available in a
spreadsheet program, that program with .NET capabilities could
generate an up-to-date list each time the customer looks at the
menu, and the computation of that formula could take place on the
more-powerful server instead of on individual workstations, Burney
These .NET-enabled products would likely become available six
months after Microsoft releases its .NET framework, expected to be
late this year.
Emphasis on Creativity
Corel's creative products are expected to provide the primary
engine for revenue growth. Corel will investigate and identify
opportunities in new and fast growing markets fueled by the
increasing demand for web content and graphics. The company has
established a framework for the future that will unfold in three
Phase 1: Over the next twelve months, Corel has
the opportunity to significantly grow its creative products
revenues by successfully:
Upgrading users to CorelDRAW 10 Graphics Suite
Launching CorelDRAW 10 Graphics Suite for Macintosh
Releasing new versions of Corel KnockOut masking software,
Corel Painter, Bryce and KPT
Implementing targeted sales and marketing programs for new
Phase 2: Over the next one to two years, Corel
will expand the scope and reach of its current suite of creative
products through strategic investments in infrastructure and new
growth opportunities. Corel is taking steps to transform its
current graphics suite to deliver creative solutions to customers
who work primarily on the Web.
Phase 3:Over the next two to three years,
Corel's advanced technologies incubator, the New Ventures division,
will investigate acquisition opportunities and new market segments
where Corel can leverage its graphics software assets to generate
new revenue streams for the company.
In addition, by working on projects related to Microsoft's
powerful new .NET framework, Corel will be better positioned to
provide its customers with the most up-to-date technology as soon
as it becomes available. Corel's alliance with Microsoft, which
includes a $135 million investment by Microsoft in Corel, is part
of the company's commitment to deliver applications, expanded
services and content over the web.
A new strategic purpose -- to give customers "Boundless Power to
Create. Anytime. Anywhere." -- hints at Corel's plans for
developing its applications for other devices, including handheld
and wireless devices. "If we continue to develop applications just
for the PC, we can't live up to that," Burney said.
Having successfully restructured and realigned its operations,
Corel is turning its attention to the future. "We're focused on
results. I want judgments about Corel, and about myself to focus on
results," Burney said. The strategy is the culmination of a
comprehensive corporate review directed by the company's senior
executive team over a period of several months.
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