From Wednesday's Financial Post:
Wednesday, August 20, 1997
We're not dropping Java: Corel
Company scrambles to explain new strategy as shares slide
By JILL VARDY
Technology Reporter The Financial Post
OTTAWA -- Shares in Corel Corp. slipped yesterday as analysts and investors digested news that Corel has overhauled its strategy for software development. Corel shares (COS/TSE) in Toronto fell 60› to $8.40 while the company scrambled to explain its new strategy.
Meanwhile, one of the two investment firms that had rated Corel stock a "buy" downgraded its recommendation yesterday. A.G. Edwards Inc. reduced the stock to a "hold" rating, as a new analyst took over coverage of Corel. The other firm, RBC Dominion Securities Inc., maintains its "buy" rating.
Corel president Michael Cowpland told reporters on a conference call -- the second in two days -- that the company will use new "bridging" technology, called Remagen, to allow existing software to
run on any type of computer operating system.
That's a retreat from Corel's old strategy of rewriting all its software in Java, a universal programming language that can be read by all computer systems. But Cowpland said that doesn't mean Corel is abandoning its plans for Java. In fact, he said, more of Corel's R&D budget will be spent in future years on Java-based software.
Corel's vice-president of software development Paul Skillen told analysts on a conference call Monday the new strategy was a "fine-tuning" of Corel's Java plans. Corel has stopped production of
its Office for Java software package.
Analysts say Corel's experiments show that customers aren't ready to buy Java office software because it's not powerful or fast enough yet.
Michael Pinckney, research director at Gartner Group Inc., said Corel "went off a bit half-cocked" with its plan to rewrite software using pure Java programming because companies weren't keen to
buy the software. "They didn't do a great job of understanding the enterprise business from day one,'' Pinckney said.
"The Office for Java strategy was an example of that. This change in strategy shows a maturation of the company."
This time, Corel has tried a different approach to making software work across all computer platforms. Remagen is a software technology developed by Corel that allows different computer operating systems to share the same software.
Corel says that by using Remagen, a company can store software on its computer server and that all its connected computers -- regardless of whether they are Macintoshes, Windows-based systems, Unix systems or the new network PCs -- can use the same software and share files written on it.
A key selling point for Remagen is that it is designed to allow firms to use the latest high-powered Windows software throughout their companies without upgrading old computers. And installing a new version of software on one server will make it instantly accessible to every computer connected to that server.
Corel says its Java research will form the basis for a line of Internet-based products called CorelCentral.
The software is targeted at corporations that want to use intranets for collaborative computing. |
