January 12, 2001, 10:21 AM — STRUGGLING APPLICATIONS AND Linux distribution vendor Corel appears to be slowly putting its past financial, personnel, and product woes behind it, and with Microsoft's assistance is hoping to move back to profitability while more fully embracing the Web.
At the start of last month, the companies announced publicly that Microsoft was taking about 25 percent of Corel in a deal worth $135 million and that the pair would work together on Microsoft's .NET initiative.
Clare Haney, West Coast bureau chief for the IDG News Service (IDGNS), an InfoWorld affiliate, talked last week at Comdex with Derek Burney, CEO and president of Corel, about the tie-up with Microsoft and the way ahead for Corel. Burney stepped up to lead Corel only a few months ago, following the resignation of long-time company head and strong Microsoft critic Mike Cowpland.
Since becoming the head honcho at Corel, Burney has been responsible for the Microsoft relationship as well as splitting the company into three product divisions -- creative products, including the corporation's graphics software CorelDraw; business products that contain its WordPerfect office productivity suite; and Linux products, namely Corel Linux OS -- as well as a fourth unit, dubbed new ventures, which heads up the vendor's research and development efforts.
IDGNS: How did the whole deal with Microsoft come about?
Burney: It came together relatively quickly ... in less than a month. In my previous role with Corel as an engineer, I had continuous discussions with Microsoft; we've used their development tools all along. Our relationship was quite good even while Corel's public relationship with Microsoft wasn't. When Cowpland resigned, my engineering counterpart at Microsoft, Tom Button, the general manager of their tools division, called to congratulate me and invited me to come to visit them. I spent a whole day at Microsoft, listening to presentations on .NET. I was stunned at how it dovetailed into our requirements and thought we could put a deal together.
IDGNS: What about the suggestions that by investing in Corel, Microsoft is simply acting to ensure that it has competitors in the markets in which the company plays, in the same way as when Microsoft put money into Apple Computer?
Burney: They can invest in anyone they like and it will have no effect on that company's direction. The shares they bought in us are not voting and they have no Corel board seat.
IDGNS: With the Microsoft investment, does Corel now have enough money behind it?