To Corel followers, this was in todays Investor Business Daily's computer section. Hmmm, didn't do much for the trading action today.
Regards, QuadK
Can Corel Hit Microsoft With Microsoft
Artillery?
Date: 4/23/98
Author: Lisa Wirthman
How do you compete with a virtual monopoly? Corel Corp. is doing so by
taking a page from rival Microsoft Corp.'s book: free software.
To compete with Netscape Communications Corp.'s Web browser,
Microsoft gave its browser to anyone using its Windows operating system.
Now, Corel is giving free operating systems to users of its new suite of
office software for network computers. NCs are scaled-down devices that
use Web browsers to access data on servers, instead of a PC's hard drive.
''It's the single most interesting threat to Microsoft that I've heard in a long
time,'' said Dave Vellante, an analyst for International Data Corp. in
Framingham, Mass.
The computing world is moving toward the Internet, Corel executives say.
''Microsoft is giving its browser away for free? Fine. We'll give the
operating system away for free,'' said Michael Cowpland, Corel's chief
executive. ''Computing is moving toward the Web. So we don't care about
the operating system. We care about the browser.''
Corel's jSuite is slated to be released this summer. It includes
word-processing, spreadsheet and other productivity software. It also
provides the software needed to run an NC, including an operating system
and a browser. It's written in the Internet programming language Java.
Corel's ability to provide the operating system and browser comes,
ironically, thanks to Microsoft. When Microsoft started giving its browser
away, Netscape responded by giving away its browser and the code for
building it. Corel is taking that Netscape code, as well as free operating
system code from a Unix derivative called Linux, and putting them into
jSuite.
''The Netscape and Linux code gave us 90% of what we need to offer
customers a complete solution for NCs,'' Cowpland said. ''We provide the
other 10%.''
Also in jSuite is Corel's new jBridge technology. It lets NCs connect to
servers to access full- sized office suites for PCs.
Ottawa-based Corel doesn't charge anything for jBridge, the browser or the
operating system. JSuite will be priced under $100, Cowpland says.
Corel has the task of competing against Microsoft's dominance in operating
systems and office suites. Nearly nine in 10 desktops run on Microsoft's
Windows. Microsoft's Office suite holds 88% of the market for PC
productivity software, says market researcher Dataquest Inc. of San Jose,
Calif.
''In the U.S., Office has become the de facto standard,'' said Dataquest
analyst Suzanne Snygg. Corel's WordPerfect suite has just 5% market
share, while IBM Corp.'s Lotus unit has 6%, she says.
Microsoft's strength is its high volume. That lets it charge lower prices than
rivals, IDC's Vellante says.
But one way to create even higher volume, he says, is to give something
away for free. ''Free is very competitive with the Microsoft model,''
Vellante said.
Freeware such as Linux and Netscape's browser are gaining in popularity.
Because the freeware source code is available to anyone, more developers
can test and improve the products. That can make those products faster and
more reliable than other software.
Netscape has lent new credibility to freeware, analysts say. Netscape also
has its own plans for Linux. That could increase the market for products
like jSuite.
The company is looking at ways to run its Internet browser and server
software on Linux as an alternative platform to Windows NT, a Netscape
spokesman said. Versions of Netscape's browser code already are available
for Linux.
''Freeware could have a big impact on the future of the software business,''
Vellante said. ''There's no reason to believe that (it) couldn't achieve a
critical mass.''
Also, PC growth is slowing, which could make Microsoft more susceptible
to low- cost alternatives like Corel's jSuite. Analysts, though, aren't sure
how fast NCs will sell, especially since PC prices are falling fast.
Outside the NC market, Corel has slashed the price of its WordPerfect suite
for PCs to better compete against Microsoft Office in the sub-$1,000 PC
market. ''We're expecting a big jump in volumes,'' Cowpland said.
''We're going to be one-third the price of Microsoft's software.''
JSuite will provide an alternative for people who want even lower costs, he
says. It's aimed at users who only need the basics.
Most people use only a small portion of the software that's available in
full-sized PC office suites anyway, according to Dataquest's Snygg.
''People just want to type, save and do basic edits,'' she said. ''But what
you end up with is a nuclear-powered toaster.''
The advantage to Java office suites like jSuite is that the software is in bite
sizes, Snygg says. Users can pick and choose what features they need
most.
Corel's jSuite was built using JavaBeans components, Cowpland says.
These are reusable software building blocks that can be ''glued'' together to
create applications.
In addition to selling jSuite, Corel is licensing its technology for gluing
together JavaBeans to software makers, he says. The company also is
selling the technology to companies for building customized programs to fit
specific corporate needs.
Corel hopes jSuite at some point accounts for half of its revenue, Cowpland
says.
But Corel isn't the only company taking on Microsoft in this field. Lotus
began selling its own Java-based eSuite software in February.
Corel lost its Java lead to Lotus in August. Then, it had to scrap its first
attempt at a Java office suite after it was found to be too slow and unwieldy
for NCs.
Now, Cowpland says that Lotus' entry into the Java office suite market
helps Corel.
''Lotus has a huge corporate presence with the IBM name,'' he said. ''Let
them do the work to establish the market. Then we can come in, be more
agile and deliver better performance.'' |
