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Corel moots Linux sell-off

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Corel will soon spill the beans on its plan for recovery - potentially including the sale of the company's Linux business - president and CEO Derek Burney has said. The announcement will be made in three weeks' time.

Interviewed by InfoWorld, Burney, who took the helm at Corel last summer following the abrupt departure of long-time incumbent Michael Cowpland, said the company is now seriously considering its options.

One is to ditch its Linux business, he admitted, or to buy in new technology. "To be successful in the Linux market, you need a wider product offering. There's got to be some kind of acquisition," he said. "It could go either way... there are no sacred cows."

It could indeed. Corel's Linux distro, along with the Linux version of WordPerfect Office, contribute around ten per cent of the company's revenue, so that's an important chunk of money that would be lost if Burney does indeed choose to abandon that market.

Of course, with Microsoft now owning 25 per cent of the company, primarily to prevent another competitor going to the wall - 'see, we do have competition' - and to kickstart support for MS' .NET strategy, Corel might well be persuaded that it doesn't need Linux after all. That the investment was vital to Corel's future, note Burney's comment: "Clearly the investment puts to rest any notion of the viability of the company."

With Linux now in one of Corel's four business operations - the others are graphics software, business apps and new ventures - it would be relatively easy to sell off one or more of those self-contained units. After all, Corel doesn't need a version of Linux to be able to develop and sell WordPerfect for Linux, and since apps are where the money is, it might make sense to concentrate on them.

If acquisitions are on the cards - and buying in software that's aimed at markets Microsoft doesn't dominate makes a lot of sense for Corel - it may need to sell in order to buy. Despite the $135 million from Microsoft, cash is still tight, though Burney's "it may be used in making acquisitions" description of the investment seems to point out what it will be used for. ®

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