Corel to spin off desktop Linux unit

InfoWorld |  Software

SAN MATEO -- With spinning off its desktop-oriented Linux operating systems business high on the list, beleaguered Corel Corp. on Tuesday outlined an ambitious, multiphase strategy it hopes will bring the company back to profitability later this year.

Corel is not leaving Linux behind -- it plans to keep a financial interest in the company that eventually buys the spun-off business. Corel will also hold on to its Linux applications business, planning to invest heavily in the existing desktop versions of WordPerfect and CorelDraw for Linux, as well as versions for the Windows and the Apple Computer Inc. Macintosh environments.

"The new Corel's future will be based not on radical choices but smart changes. We will concentrate on our strengths and make sure that every decision is consistent with the direction we have established, and that every action grows the business in a profitable direction," said Derek Burney, Corel's president and CEO, at a late-morning press conference Tuesday.

By building on Corel's core strengths -- centered on its desktop applications -- the company can achieve a compounded annual growth rate of at least 20 percent over the next three years, Burney said.

The first phase of the company's three-phase plan stretches over the next 12 months. During this time, the vendor plans to deliver improved versions of CorelDraw Graphics Suite, launch CorelDraw Graphics Suite for the Macintosh, ship improved versions of its Knockout masking software and Corel Painter, and implement a series of sales and marketing programs for new vertical markets.

The second phase, which covers the next one to two years, will see Corel expand its suite of creative products through strategic investments in infrastructure and what Burney described as "new growth opportunities." Also during this phase, Corel will deliver versions of its graphics suite that allows users to take better advantage of the Web.

In phase three, covering the next two to three years, Corel will investigate a variety of acquisition opportunities and focus heavily on delivering projects related to Microsoft Corp.'s .NET development framework.

Through all of these phases the company will focus on strengthening its relationships with WordPerfect users, to better ensure that new features to desktop products in particular are being addressed. Approximately 70 percent of the features expected to appear in WordPerfect Office 2002 are based directly on user feedback, company officials said Tuesday.

"We are focusing on our core customers. By that I mean WordPerfect users who are not yet necessarily Corel customers. Of those 22 million WordPerfect users out there, some 18 million have not purchased a Corel product. We hope to give them a reason to upgrade, using things like Microsoft's .NET technology," Burney said.

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