Corel looks to Linux for growth

By ADAM GIFFORD

Michael Cowpland is smiling. Microsoft, the undisputed number one for almost all types of PC software, is having a bad time in the courts and on the sharemarket.

Corel, the Canadian company founded 16 years ago to make a drawing program for the PC, is doing just fine. It now has an even wider range of productivity software than the Redmond giant.

Its share price is healthy, and Dr Cowpland is in New Zealand to launch Corel Linux, the easy-to-install version of the Unix-like operating system that is changing the rules for PC software.

"It's been tough competing in the Microsoft-dominated space because of the competitive edge they can get with all the cross-bundling they do with their operating system," says Dr Cowpland, a Sussex-born engineer.

"That has now been challenged."

Corel has avoided head-on conflicts with Microsoft in the courts. It has, however, taken Government agencies in Canada and the United States to court for adopting Microsoft-only policies.

"In some cases the MIS [management information systems] directors like to go home early by giving Microsoft a big fat cheque.

"That's against the rules. You are supposed to allow for competitive tender, so when that doesn't happen we are the first ones to say, 'That is not fair. Let's not waste taxpayers' money like that'."

He says that despite some hard years, "we are still standing and competing in a resilient way. We now have the ability to launch so much Linux product into the marketplace with full compatibility to Windows."

Corel's 50 million users - 15 million for Draw and 35 million for the Word Perfect suite - means the company should be able to drive the rapid adoption of Linux on the desktop.

It has also been able to buy other smaller software firms relatively cheaply, to fill gaps in its range and with the intention of quickly making them available for Linux.

Corel is doing the same thing with licensing, signing a deal last month with IMSI to license the source code for Flow!, a flow chart and diagram package, and TurboProject, a project management software package.

Corel's merger with the development and software integration tool manufacturer Inprise/Borland means it will be able to help move Linux-based desktop applications into larger companies.

There are close historic links already. Borland used to own the Paradox database and Quattro spreadsheet programs that are now part of the Word Perfect suite.

While Corel is fostering Linux, it is also clawing back a healthy share of the market for applications on Windows and building its Macintosh business.

One strategy is generous licence terms, allowing universities and schools to use unlimited copies of its software for a pittance. Its corporate and OEM (original equipment manufacturers) licensing fees are also well below rivals such as Microsoft, Quark and Adobe.

Wilson and Horton Group has just signed a 100-user licence that will allow Draw to be used for production of its provincial and community newspapers.

Dr Cowpland says Corel is prepared to trade high licence revenue for market share.

"At this time it's an internet game where you go for a large number of users. That in itself is worth quite a bit of money just to have users."

The most noticeable difference between Corel Linux and its predecessors is that installation is no longer a marathon rite of passage.

"We are experts at user interfaces, so we applied that to Linux, both in installing it and driving it from the desktop."

Now that it has a simplified distribution of Linux and a growing range of applications to run on it, Corel is pursuing OEM deals to put the operating system on as many PCs and appliances as it can.

Dr Cowpland says his company has "half a dozen deals cooking." The growing availability of application suites makes such deals far more viable than even a few months ago.

He says that in five years the number of Linux users will be equal to Windows users, but Corel will not overtake Microsoft.

"We don't see them as head-to-head competition ... I think they have reached their apogee of dominance."