ZDNet UK / News and Analysis / Business of IT / IT Strategy

Corel targets Microsoft customers

By David Becker, CNET News, 2 August, 2002 09:58

Daily Newsletters

Sign up to ZDNet UK's daily newsletter.

Topics

Microsoft licensing, Corel, targeting customers

NEWS
Software maker Corel hopes business customers frustrated by Microsoft's controversial new licensing programmes will be ready for a change. The Canadian company, whose fortunes have zigzagged in recent years after a tough fight for financial survival, is offering businesses a free one-year trial of its WordPerfect word processing application. The hope is that a percentage that try the program will decide they can live without Microsoft's full Office package and switch to a la carte software, including WordPerfect. "It's designed to position Corel and take advantage of a great deal of frustration that has been building up in the Microsoft customer base over the enterprise licensing programme," said David Roberts, vice president of enterprise solutions for Corel. Microsoft last year announced a drastic revamping of the licensing programme under which businesses pay for multiple copies of the company's software. Under the new "Software Assurance" plan that went into effect on Wednesday, businesses must sign up for multi-year contracts with annual payments and guaranteed upgrades to continue receive volume discounts. Analysts have estimated the plan could increase software costs by as much as 100 percent for businesses that don't upgrade programs often. Businesses, under increasing pressure to trim IT budgets, have balked at the changes, with surveys by independent research firms showing that a majority of businesses had not signed up for the new licensing plans by this week's deadline. Microsoft chief executive Steve Ballmer has blamed complaints on flaws in the company's marketing efforts. "I think the fact that our customers probably didn't understand our licensing as well as they might have earlier makes the transition and makes the perceived pain actually higher than perhaps the real pain," he said at a meeting with financial analysts last month. Regardless, Corel sees an opportunity for WordPerfect, once the dominant word-processing application but now largely an afterthought. Gartner Dataquest estimates that Microsoft's Office package now accounts for more than 95 percent of the office productivity software market. Roberts said Corel doesn't expect to rattle Office's dominance, and he was careful not to disparage Microsoft, which helped pull Corel from the financial brink two years ago with a $135m investment, but he expects Corel can gain new customers by showing cost advantages significant enough to merit migration. "This is not a change in strategy for Corel to go out and compete directly with Microsoft," he said, "but it is a chance to go after companies that are frustrated with certain aspects of Microsoft's enterprise licensing...Microsoft is a very important partner to us; we have to work with them for our company to be successful. But with the brand equity in WordPerfect, we felt we'd be negligent not to address this opportunity." Paul DeGroot, an analyst for research firm Directions on Microsoft, said various surveys show that 15 to 30 percent of Microsoft business customers "are looking at lower-cost alternatives to Office as a result of changes to Microsoft's licensing." "The fact the opportunity is there doesn't necessarily mean the business is there," DeGroot added, "but this is as good a time as any for the few remaining contenders for office suites to point out their cost advantage over Microsoft products." A big part of Corel's argument centres on buying individual software programs rather than pre-packaged suites. Office customers have to buy a package that includes spreadsheet, database and presentation programs when all that most users need is word processing, Roberts said. "Part of the frustration companies are feeling is that they don't need a thousand copies of PowerPoint," Microsoft's presentation program bundled with Office, he said. Roberts acknowledged that it's become habitual for most companies to buy software in packaged suites. "This would be a massive strategy change for a company to do this, to look at componentised software where you buy what you need instead of what somebody is selling you," he said. "There's so much frustration out there, we think we can get some people to convert." Alvin Park, an analyst for research firm Gartner, agreed that the majority of office workers require only a word processing application. With aggressive marketing and solid technical support, he expects Corel and Sun Microsystems, which is pitching its StarOffice as a low-cost alternative to Microsoft Office, could carve a few points of market share from Microsoft. "I think this will put a little bit of pressure on Microsoft," Park said. "The differences that do exit between WordPerfect and Microsoft Word will have to be addressed, and people will have to decide how much migration pain they can handle." The one-year trial period should go over well with Microsoft customers who are holding out on Software Assurance, Park added, since such companies have a few years to decide how to replace aging software. "For the folks who didn't purchase Software Assurance...they can spend the next year or so doing an evaluation to see if they could move off Microsoft products," he said.
See the Software News Section for the latest headlines on everything from peer to peer clients to Office software and beyond. Have your say instantly, and see what others have said. Go to the ZDNet news forum. Let the editors know what you think in the Mailroom.

Related stories

Customers shun MS licensing plan

Q&A: Corel chief says deepwhite will mirror .Net

Heart of England NHS begins massive digitisation plan

Hard-drive woes hit PC shipments in fourth quarter

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

45283

I think WinRT is fantastic. I just wish it was an option for people that didn't want to go through Microsoft's App Store with its attendant...

3 hours ago by 45283 on Why Windows 8 needs architectural hygiene for WOA
Burn-IT

Nine people? £30m? Who's back pocket is that lot going in? And IF they say it is for new buildings, what about all the ones the government has...

4 hours ago by Burn-IT on Police set to launch three £30m e-crime hubs
ewallace

Just to be clear, nobody knows what is in the text of ACTA, here is a photograph of the text of ACTA http://twitpic.com/8h9iju as submitted to the...

4 hours ago by ewallace on ACTA: Facts, misconceptions and questions
fgvrg56

Unfortunately main issue is that ASUS is refusing to accept that they make some mistake on this version of asus Transformer prime. 1 - GPS sensor...

5 hours ago by fgvrg56 on Asus Eee Pad Transformer Prime Wi-Fi & GPS problems?
Ben Woods

@Marcus A fair question. Just talked with Archos which said it was working on an announcement for next week....

6 hours ago by Ben Woods on Archos confirms G9 Ice Cream Sandwich update schedule
Marcus Karlsson

Any update on this, considering the claimed "first week of February"?

7 hours ago by Marcus Karlsson via Facebook on Archos confirms G9 Ice Cream Sandwich update schedule
apexwm

Bill Goodrich : Just as al_langevin pointed out, with Windows Server 2008 there is no Services for Macintosh anymore. It's gone, not available....

16 hours ago by apexwm on Windows Server 2008 drops the ball for Mac compatibility
txtrainguy

Replying to an old topic that I'm currently facing with my CEO (who is on a Mac). Our servers are primarily Windows Servers, office is about...

22 hours ago by txtrainguy on Windows Server 2008 drops the ball for Mac compatibility
k0tcs3

Sure, that makes perfect sense. Pay wrong-doers money and thank them for breaching your security and pointing out your flaws, that would surely...

23 hours ago by k0tcs3 on US indicts Romanian over NASA climate change hack
Random_Error

I think he's referring specifically to Android apps, as Apple do regulate their App Store, but Google seem to let any old crap onto the Android store!

23 hours ago by Random_Error on RIM: BlackBerry will keep 'garbage' apps out of store
Paul Fezziwig

Keep the crap apps out?! How will they compete with Android and Apple's claim to fame of having so many life changing apps? I wonder if the media...

1 day ago by Paul Fezziwig via Facebook on RIM: BlackBerry will keep 'garbage' apps out of store
Aigars Mahinovs

It has been shown time after time that if there is an author store that sells the songs at even 1$ per song and gives you a high-quality digital...

1 day ago by Aigars Mahinovs via Facebook on Copyright isn't working, says European Commission
awbMaven

""As a result of Butyka's alleged conduct, researchers were unable to use the computers for more than two months while NASA removed the malicious...

1 day ago by awbMaven on US indicts Romanian over NASA climate change hack
subhorup

It simultaneously worries me and uplifts me that a self-proclaimed group of internet activists name themselves after Indian mythical figures....

2 days ago by subhorup on Anonymous activists release PCAnywhere source code
naviathan

It's actually far easier to work anonymously on the internet than you think. With tools like Tor bouncing your traffic around the world before...

2 days ago by naviathan on Anonymous activists release PCAnywhere source code
Agnostic_OS

1000272134 and bluedalmatian with you both there but then I'm still in 10.04 land (and happy with it)

2 days ago by Agnostic_OS on Ten factors that make Ubuntu 11.10 a hit
apexwm

Interesting article and definitely see your points on the products mentioned. One of the top products for our Help Desk (approximately 20% of all...

2 days ago by apexwm on Ten flawed products that derail productivity
Paul Hutchinson

Absolutely - this should obviously not be handled my isp - but handled by their hosting operator. What's been suggested here is that my isp police...

2 days ago by Paul Hutchinson via Facebook on MPs urge ISPs to take down terrorist material
Techs UK

Looks like a great phone. I don't notice any deficiencies in WP7. used IOS before, that's pretty good. I don't spend much time in Apps, all i need...

2 days ago by Techs UK on Nokia pins US 're-entry' hopes on Lumia 900
Larry Bloggy

Now with the help of these apps you are always synced with MS outlook while on the move. Just download apps like xobni or outlookreflex and get...

2 days ago by Larry Bloggy via Facebook on Outlook Social Connector beta 2 and the LinkedIn connector

Latest in IT Strategy

Heart of England NHS begins massive digitisation plan

Hard-drive woes hit PC shipments in fourth quarter

Featured white papers

How cloud adds strategy to IT outsourcing

SAVVIS

How cloud adds strategy to IT outsourcing

Thanks to cloud computing, IT outsourcing is back, but this time it can help both in cutting costs and helping the business... Read more

Tech breakthroughs to watch in 2012

ZDNet UK

Tech breakthroughs to watch in 2012

From invisibility cloaks to virtual atom smashing, from Cern to Nasa, this ZDNet UK guide presents the discoveries to watch in... Read more

Key trends driving global business resilience and risk

IBM

Key trends driving global business resilience and risk

This IBM research paper looks at how businesses are thinking more about business resilience by improving the ability to adapt to a continuously changing business... Read more

Inside ZDNet UK

A tale of two distros: Ubuntu and Linux Mint

A tale of two distros: Ubuntu and Linux Mint

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

2012 Predictions: VCE FastPath, VI SAN Probe & Hadoop

BlackBerry Bold 9790

BlackBerry Bold 9790

Case study: How cloud enables growth

Case study: How cloud enables growth

Ten factors that make Ubuntu 11.10 a hit

Ten factors that make Ubuntu 11.10 a hit

Toshiba Portégé Z830-10P Review

Toshiba Portégé Z830-10P Review

BT's archive: Pictures from the vault

BT's archive: Pictures from the vault