Corel Deals to Live A While Longer

Corel was once a major player in the office productivity market. With the once industry leading Word Perfect, along with several titles picked up from Borland, like Paradox and Quattro Pro, it was a powerhouse.

Too bad that Microsoft used unscrupulous means to get its unfair share of the market.

Corel has been on the ropes for some time, barely managing to stay alive, yet continuing to bring good to great products to the market. PC World tells of the difficulty Corel has had, and what was entailed in keeping the company afloat for another time of competition.

In a desperate bid for survival, longtime office software maker Corel has agreed to a takeover by its majority investor, Vector Capital, a move that could help keep classic software packages such as WordPerfect and CorelDraw around as Microsoft Office alternatives, at least for a while.

Founded in 1985 with CorelDraw as its linchpin, Corel has struggled to compete with Microsoft Word and Microsoft Office after acquiring the WordPerfect software title from Novell back in 1996. Corel has also produced literally dozens of other software titles over the years, often after acquiring them from other software vendors.

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The gloomy money picture at Corel stands as a vivid example of how current financial conditions can wreak a disproportionate amount of havoc on smaller companies without deep pockets that are trying to compete with corporate giants such as Microsoft.

When the smaller company at risk is a software maker, PC users can end up on the losing end, too.

The article later tells a bit more about the ugly side of software production, and the ordeals sometimes encountered when struggling against the giants -

Actually, a buyout of Corel has been looming since last spring. In March of this year, Vector offered to acquire Corel’s remaining shares for $11 per share, but then withdrew the offer after Corel said it would pursue “alternative relationships.” In August, two other parties — unnamed by the WSJ — offered a company buyout at $12.50 per share. But they later cut the offer to $10.50 per share and then took the offer entirely off the table due to tightening bank credit.

Another VC firm, ESW Capital LLC, bought a 17.4 percent interest in Corel for the suddenly miniscule stock price of $4.75 per share earlier this month. ESW also offered to buy the company for an undisclosed price, according to an account by Dow Jones Newswires.

Now Vector, which currently owns a 68 percent share, will be taking Corel private again, nailing down the remaining shares at the bargain basement price of only $4 per share.

In an announcement on Monday, Corel justified the decision to accept Vector’s offer by saying that complete ownership by Vector is needed to raise capital quickly and avoid defaulting on its loans.

Although Corel’s other shareowners will take a bath, Corel seems to have little other choice at this point if it wants to keep itself and its current software product line-up alive, even temporarily.

Although Vector did fail in its attempt to take the company public, the VC has long paid more than lip service to trying to save Corel, as evidenced by a Corel case study on Vector’s Web site. Alternatively, Corel might easily fall prey to the “slash-and-burn” tactics of less scrupulous investors.

Hopefully Corel will survive, and not go away with no one benefitting from the software it offers. Word Perfect is still a great word processor, and Quattro Pro, in my opinion, was always superior to Excel, unrivaled by anything other than Lotus 1-2-3. Paradox was, when last I checked, superior to Access, and was the closest thing to my long time favorite R-Base (a great relational database during the days of DOS), while keeping the ease of use that dBase III+ (another great database from the DOS days) used to have.

I never have liked the Microsoft Office products, because they never have been the best available applications, just the best backed, with money, and influence. Other products worked better, yet were swept aside by the marketing and influence of Microsoft. It is similar to the Windows – OS/2 question. Everyone in the know understands that OS/2 was the better product, but Windows was better backed and the influence of the Microsoft tax made OS/2 the big loser.

I’m sure the Corel deals will come around now, and you might want to try them, while you can – they might still be superior – I’d give it better than even money.

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Quote of the day:

The greater the ignorance the greater the dogmatism.

- Sir William Osler

{Sounds like a perfect description of the Republican party today…}

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