Corel plunges into professional services

In the new era of IT where it seems companies are adding multi-coloured feathers onto an already crowded hat, Corel Corp. has become the latest company to take a shot at diversifying its operations by launching a professional services group.

A team has already been assembled from existing Corel, Micrografx Inc. and SoftQuad Software Ltd. Staff. The latter two companies were recently acquired by Corel.

The professional services group will support all of the company’s software offerings, including XMetal, WordPerfect Office, Corel Venture, CorelDRAW, DESIGNER and the iGrafx line of enterprise management software.

The outfit will provide a full range of services such as needs analysis, integration, training, deployment and support of the company’s software solutions.

The announcement poses several challenges to a software company that has traditionally played in the home and small office environments and is now looking to make the perpetual leap into the enterprise space. A company spokesperson said that Corel already has enterprise customers on board and have for some time.

“Services are already being offered. We’ve been delivering these services as different companies for some time. We’re currently engaged with enterprise customers in delivering XML services, smart content and enterprise content solutions as well,” said Joe sparks, the vice-president of professional services for Corel in Dallas, Tex. As he explained, it is not Corel’s intention “to be all things to all people,” in providing IT consulting services and called this Corel’s opportunity as a result. The bulk of those enterprise customers were inherited by the two mentioned acquisitions.

What remains unclear is how Corel expects to lure customers away from vendors who are already providing support or offer services running Corel’s software. And with revenues falling, some are suggesting that this is a desperate act by a company in search of a new way to generate revenues. For one analyst, Corel is in for a rough ride.

“It has to be related to their core applications, it can’t just be we’re going to do IT consulting (or) implement ERP solutions so it has to be a logical extension of what they already do. They’re going to find that there is some resistance in the marketplace not only from clients but partners,” said Barbara Hall, senior analyst, consulting & integration for IDC in Toronto. She agreed that because Corel has not been a major player in the enterprise space, gaining entry into this crowded house won’t be easy and doesn’t think that Corel has much of a chance of cracking the top ten of professional services firms over the next several years.

She speculated that where the software company could find success was in content management, the integration of their own software and in the hosting and maintenance of their applications but won’t make any head way by trying to offer enterprise resource planning (ERP) installations or as a general services player in Canada. Corel’s Spark said that there were no imminent plans to act as an ASP to their software clients.

With the likes of PwC, Accenture, Fujitsu Consulting, IBM, CGI, Cap Gemini, Ernst & Young and Deloitte Consulting but to name a few all long-standing organizations that offer professional services, it could be a long haul for Corel on yet another front.

“Is the runway long enough because one of the problems is what are you known as. It’s a branding issue,” said Herb Duncan, president for Fundy Computer Services in Saint John, N.B. And with its history in software, the transition, despite the customers who are already on board, will remain a challenge. Corel’s motivation for moving into the professional services market is a pure “survival” tactic, Duncan said.

Corel’s professional service team will deliver customized solutions and support to address the specific needs of enterprise, government and academic clients.

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