Corel uses Y2K fears to beef up market share

By Adam Gifford

Corel is using a twin attack of compatibility and cost to win back customers - beefing up its flagship Draw and Word Perfect products into suites to take on rivals like Adobe Illustrator and Microsoft Office.

Since establishing a New Zealand office last year, the Canadian company has been busy getting its software back on to retail shelves, into schools and tertiary institutions and bundled with hardware.

Corel is hoping to take advantage of uncertainty surrounding Microsoft's Windows 2000. Few companies are expected to upgrade before the new year because of fears it could conflict with Y2K bug fixes.

By the time the market warms up next year, Corel wants to have won some mind share for its just-released Word Perfect Office 2000 suite and its Linux desktop, due for release in November.

A recent United States survey put Word Perfect's installed base there at 22 million seats, compared with 44 million for Microsoft Office.

Word Perfect Office 2000 includes Dragon Naturally Speaking voice recognition technology, the Excel-compatible Quattro Pro spreadsheet, presentation and organising software. Professional versions include the industrial strength Paradox database.

On the graphics side, the Corel Draw programme also includes Corel Photo Paint, which is winning support from some designers as a credible competitor to PhotoShop at a lower price.

Mr Grey said despite losing Word Perfect support in the channels as ownership of the company bounced from Borland to Novell to Corel, users stayed loyal, especially those in the legal profession.

It's in the licence costs that Corel hopes to win long-term. While there has been limited uptake of corporate licences so far, four of the seven universities have bought academic licences, along with three polytechnics and 18 secondary schools.

A tertiary institution with more than 5000 students can buy a Licence for Learning for $4900 a year, giving it the right to run any version of any Corel product on any platform.

It must buy at least one copy of whatever software it runs at the discounted academic price, to get the manuals. The price goes down for smaller institutions, with primary schools charged $490 a year.

That compares with Microsoft's academic licensing programme, based on the number of equivalent full-time staff positions, which is costing some New Zealand universities and polytechnics more than $100,000 a year each.

Auckland University alone pays more than $250,000 at $86 a seat, according to Microsoft education manager Todd Hunter. Auckland Institute of Technology pays about $100,000 at $96 a staff member. A new schools licence will require schools to pay Microsoft $89 per computer on which the software is installed.

Mr Grey said Corel's licence pricing isn't a loss leader, but "a way of being different".

Corel sells copies of its software, without manuals, to students at institutions which have academic licences. Draw will cost them $99 instead of up to more than $1100 retail, while the Word Perfect suite costs $49 instead of $800.

"We are the only vendor to extend our academic pricing to hospitals, libraries, museums and other non profit groups." Mr Grey said, an attempt to make Corel the first choice of "budget strapped" organisations.

Corel has also work to reestablish OEM (original equipment manufacturer) relationships. Word Perfect is shipped with Gateway laptops and PCs for home-buyers, and almost 200 buyers of new Apple computers have taken the opportunity to get a copy of Draw at the same time for $99.

The company is signing worldwide licences with a number of major manufacturers, including Hewlett Packard, Lexmark, Epson and Agfa.