“This strategy represents the start of an important new chapter in Corel’s history,” Derek Burney, president and CEO of Corel, told a Ottawa press conference. “Our blueprint for the future includes a solid foundation, a clear plan, and space for growth through strategic investments and acquisitions. We are committed to success and we believe that this plan, properly executed, will result in Corel’s return to profitability by the third quarter of this fiscal year.”
Burney said the goal is ambitious to turn the company around, but that the revenue goal of a 20 percent compounded annual growth rate over the next three years and a return to profitability by the third quarter of this fiscal year is realistic. The company is looking to bring 30 percent annual growth from its creative products, such as CorelDRAW.
Burney said the company will not be laying off more employees, but will not be adding additional staff any time soon.
Corel said it is “actively pursuing opportunities” to spin off the Linux Distribution element of its Linux division while retaining an interest in the new prospective company. Burney said Corel will continue to develop applications for the Linux operating system including WordPerfect for Linux and CorelDRAW for Linux. The Distribution division focuses on development of the Linux OS, being as it is an open standard.
Saying WordPerfect “will generate significant revenues and contribution for the company,” Burney told reporters that the company will not sell WordPerfect as rumored, but will focus on improving the product and developing solutions based on client feedback. Burney admitted that Microsoft Word is the “de facto industry standard in large corporation,” and as a result, Corel will not go head-to-head with Microsoft.
“We are changing the rules of the game,” he said. “We do not want to be head-to-head against any of the competition and we’re going to come around and create opportunities with WordPerfect users that only WordPerfect can answer to.”
Burney said Corel will give the 22 million WordPerfect users an incentive to buy another Corel product and will also target small to medium businesses. To streamline operations, the company will no longer localize versions of WordPerfect for languages, reducing the number of versions from 30 to four.
“The company is committed to supporting profitable business practices,” a company statement read. “Corel will invest heavily in campaigns to support English versions of WordPerfect, both in North America and in International markets since these are products for which there is a demonstrated customer demand. This strategic investment is consistent with the company’s vision for future profitability.”
Burney said creative products will be “the primary engine for revenue growth,” and will include the launch of CorelDRAW 10 Graphics Suite for Macintosh this summer for both Mac OS 9 and OS X. The company plans on releasing new versions of Corel KnockOut masking software, Corel Painter, Bryce and KPT over the next 12 months.
“Another element of…opportunities, is a total expanded commitment to the Mac community,” Burney commented. “We are already receiving more positive Mac press, and our presence at MacWorld (Expo in early January) was amazing.” Burney said he has no plans to re-release WordPerfect for Mac and no plans to sell off the product to another third-party.
“Over the next one to two years, Corel will expand the scope and reach of its current suite of creative products through strategic investments in infrastructure and new growth opportunities,” the company said. Corel said it is taking steps to transform its current graphics suite to deliver creative solutions to customers who work primarily on the Web. In the next two to three years, Corel’s New Ventures division will investigate acquisition opportunities and new market segments such as handheld and wireless devices where Corel can leverage its graphics software assets to generate new revenue streams.
To reflect the company’s changes in allowing customers to be more creative, Corel has redesigned its logo (see above), emphasizing and italicizing the “R” in Corel to signify “Results”.
Corel has undergone a major reorganization over the past year with a $135 million
financial shot in the arm
from software giant
last October. The investment and Microsoft’s endorsement came at just the right time for Corel, which was running short of operating cash after reporting a $46.7 million loss for the nine months ended August 31.
At the same time, Corel reiterated its commitment to the Macintosh platform, saying it would
continue developing new Mac-ready products. “Corel is very committed to our Mac products,” said Ian LeGrow, Corel’s vice president of development, marketing and creative products.