Will Corel Become the Microsoft of Linux?

Just because Wall Street types think Linux is the future, doesn't mean it is. But nothing stirs faith like merger mania.

Corel Corp. (www.corel.com) and Inprise/Borland Corp. (www.inprise.com) unveiled a $2.44 billion merger plan that boils the cauldron of platform marketing.

By comparing Corel's recent moves with the early moves of Microsoft Corp. (www.microsoft.com), it seems as if the Canadians have gotten a hold of Microsoft's checklist for success.

Adding to its Linux operating platform and WordPerfect Office suite of tools, the union gives Corel the Visual Studio of Linux and plans to use it to bridge the migration from Windows to the rebel operating system, according to Dr. Michael Cowpland, president and CEO of Corel. "The most exciting part of this deal is it provides a single platform for Linux and Linux resources," Cowpland says. "We're eliminating all the reasons people thought it would be difficult to move [to Linux]."

Dale Fuller, CEO of Inprise/Borland, will become chairman of Corel's board of directors. Corel will remain headquartered in Ottawa, with Inprise/Borland operating as a wholly owned subsidiary out of its Silicon Valley locations.

The future, as far as the new combined company is concerned, is Linux. This merger is a direct course heading to that end, according to Cowpland. Ironically, it's the Windows business that Corel and Inprise/Borland both conduct that will be the cash cow for Linux development efforts.

The merger makes Corel the first company to be able to truly boast an end-to-end Linux solution. While its customer base is in Windows, Inprise/Borland has made numerous inroads into Linux since the platform became more mainstream. The company offers JBuilder 3 Foundation, a pure Java development environment for Linux, as a free download; Kylix, a rapid application development (RAD) tool for Linux, scheduled to be available mid-year; and a free download of the Linux Just-In-Time (JIT) compiler.

The products of the two companies do not overlap, but their experience in the market does. Both Corel and Inprise/Borland are software companies that have based their businesses on Windows, and have had countless disputes with Microsoft over technology sharing and employee stealing.

Each company also had its share of turmoil. Inprise/Borland ended an extremely chaotic year that saw the firing of CEO Delbert Yocam and CFO Kathleen Fisher, followed by announcements of dismal earnings reports, and regret over the change of its name from Borland to Inprise, which was later changed to Inprise/Borland to keep the Borland moniker.

Corel has fought valiantly throughout the ‘90s to maintain a steady market share with WordPerfect Office, while competing with front office software powerhouse Microsoft. Last year the company received resignations from both its chief financial officer and its head of sales and marketing. Corel spent 1999 moving quickly to port all of its Windows applications to Linux and packaging its own version of the operating system.

Both companies were quick to point out that not only will the new company maintain development efforts on Windows, but it will also work to find ways to integrate the two platforms. "It will be very easy to natively develop in Windows and Linux using virtually the same methods," Cowpland says.

Cowpland has no doubt about Linux's ability to penetrate the enterprise data center. He drew an eerie parallel between Corel's future strategy and Microsoft's present one with Windows 2000. "The sheer strength of the company will drive adoption by the enterprise. The valuation of Linux becomes more and more positive as we move forward," he says. "Because the [economic] benefits are so strong this well definitely break through the enterprise before long."

According to Leo Singh, president of the Arizona Delphi Users Group (AZDUG, www.azdug.org) and development consultancy In Think Corp. (www.inthink.com), Borland's Delphi programming language could be the best thing to happen to Linux in a long time. Delphi, formerly Turbo Pascal, is a mature programming environment that's been around 16 years. Developers use it as an alternative to C++ or Visual Basic for Windows development and it's reportedly easier to use. "Since there really isn't any competition right now, it will be fertile ground for Corel to set the stage and set the standards for Linux development in the future," he says.