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Corel compensated over unfair MS Office contract

But MS Office got the contract anyway, so who won?

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Here are some interesting numbers. Corel has won C$9.9 million compensation over a Revenue Canada contract, the bidding for which Corel successfully argued in court was skewed in Microsoft's favour. But Microsoft Office got the contract via GE Capital anyway - if all of the options are taken up, then the deal will be worth C$55 million. So Microsoft must be crying all the way to the bank, right? Well, up to a point, Lord Copper. The contract in question, which Revenue Canada put out to tender, is an interesting example of where integration blurs into immolation. Revenue Canada was already an MS Office shop, and had asked companies bidding for the deal with software other than MS Office to include estimated conversion costs in their bids. A series of Canadian courts ruled that this was unfair, and that Corel hadn't been given enough information to be able to submit a bid for WordPerfect. Revenue Canada was told either to reopen the competition or pay compensation. The deal certainly remains a win for Microsoft, but Corel's legal victory represents a shot across the bows for the Canadian government - its departments will be less likely to be quite so cavalier in 'open' tenders in the future. And of course you could view it as an awful warning for business in general - when you're getting into this integration thing, remember to figure out your likely exit costs first. Of course, as the majority of businesses are now already in there with Office, and standing on the old upgrade ratchet escalator, that's not a lot of help to them, is it? ®

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