Goodbye, Corel 2.0?

One of Canada’s most well-known, and at times flamboyant, companies is on the verge of ending its run as an independently owned Canadian software vendor – and, if reports are correct, that’s just the way Corel wants it.

The Ottawa-based software vendor announced late last month that it’s putting itself up for auction. At press time, nothing certain had been worked out – it had been in touch with CIBC World Markets about a takeover bid from San Francisco-based Vector CC Holdings LLC (which recently acquired Microsoft’s stake in the company).

It’s only the early stages, and the deal may not even happen. But assuming that Corel gets its way, and someone else moves into their head office, it will mark the end of an era for one of the industry’s most entertaining, bold and difficult-to-fathom players.

First, a bit of personal history. I was a latecomer to the PC. When I finally jumped on board, I found myself regularly using Corel WordPerfect (along with Eudora for e-mail and Netscape as my browser – believe me, I had no idea how political I was being). At the time I also didn’t know that what lay behind my rather benign-looking word processor was a big gamble from an upstart Canadian PC graphics specialist that took WordPerfect off the hands of Novell. It was a gutsy move, one that would see it going head-to-head with Microsoft (which at the time owned anywhere from 60 to 75 per cent of the word processor suite market) and Lotus.

Users at the time generally looked upon the Novell acquisition favourably. But one analyst sounded a warning: “There isn’t a natural synergy,” he said, “the companies are very different, and the customers are very different.”

In fact, that statement could very well be used to describe many of Corel’s later ventures, which often seemed to the outsider as a series of ill thought out forays into wildly varying markets.

The first such move came in 1998, when Corel decided to get onboard with the Linux operating system, readying its own user-friendly distribution, and even reselling a brand of thin-client, Linux-based devices. Although Corel at that time had 35 million users of WordPerfect and 15 million users of CorelDraw – and despite the thumbs-up from many of those in the Canadian Linux community – the company was unable to leverage the user base to build momentum behind its Linux push.

Two-years later Corel announced a US$2.5 billion merger with development tools-maker Borland Software, a plan it shortly scuttled amidst much user and analyst confusion. There was also Corel’s foray into XML and professional services. But things never seemed the same after the failed Borland merger. Not long after that, Corel inked an investment deal with Microsoft that effectively saw the famous Redmond-buster call a truce with its old foe.

Later that same year, Corel’s founder and chief Michael Cowpland resigned, and Corel morphed from version 1.0 to its current version, under the more steady stewardship of Derek Burney.

There’s no one quite like Cowpland in the Canadian IT scene – he was the true antithesis of our nation’s typical business executives. He drove flashy cars, enjoyed the good life and made no apologies for it. He and his wife Marlen (who always seemed to have at least one foot in Beverly Hills) regularly found their way into the gossip pages. Cowpland was also a brilliant entrepreneur, founding Mitel with Terry Matthews, then moving on to Corel. Today he’s the CEO of Zim Technologies. He’s also awaiting a May court date to answer insider-trading allegations that were made four years ago.

But give him credit – where many software execs are afraid to say anything at all, let alone something critical, Cowpland spoke his mind, and spoke it often. You always knew where he stood. It’s fair to say that people didn’t know a lot about Corel, but they wanted to know a lot about Cowpland. Perhaps it could be said that the two are inseparable.

But, through it all, as that analyst predicted years ago, it was Corel’s graphics software that kept revenues coming in, and it’s brand name in the market. Nothing else seemed to click.

And so today Corel stands at a crossroads. Cowpland is long gone, and the bold moves appear to be a thing of the past. Given the funk in which our industry currently sits, its first real confidence crisis, let’s hope the next Corel-Cowpland isn’t long in showing us its cards.