Microsoft Buys into Corel

Geek Boy writes: "Yahoo is one of the many sites with the story that Microsoft has purchased 24 million non-voting shares of Corel!" So now Microsoft has Word, and a big stake in Word Perfect. Hedging your bets ain't bad, course what will this mean for the Corel Office for Linux suite? And while they are non-voting shares, this looks like a huge percentage of Corel.

Official Announcement:

The official Corel announcement can be found here [corel.com].

Re:Maybe this isn't so bad...

We shouldn't need a major share buyout to get interoperatability between major apps. If Microsfot stuck to open standards, or published details of new API's in the first place we wouldn't have a problem.

The only comfort I draw from this is that they are non-voting shares.

Microsoft investments and acquisitions

Here is a listing provided by Microsoft of Microsoft investments and acquisitions [microsoft.com]. It was last updated on 9/18/00 with the acquistion of Pacific Microsonics.

Re:".NET"

No doubt this will get moderated into oblivion...

.NET is Microsoft's answer to Java. Before dismissing it out of hand, just because it originated from MS, keep this in mind:

• It definitely has it's roots in Java, depite what MS marketing hype says. MS couldn't extend-and-embrace Java for legal reasons, so they dropped their efforts and created .NET out of the ashes.
• The most important part of .NET is the CLR (common language runtime). Unlike Java, where the VM is tailored to one language, the CLR is designed to support multiple languages, and to make interoperability between languages much less of a hassle than it is now.
• As far as I can tell from lurking on the .NET mailing list, MS has been very responsive to feedback from beta testers. It looks like the .NET team has made a commitment to delivering something developers want, not something marketing thinks they can sell.
• In true MS fashion, they've identified and are zeroing in on one of the key weakness of Java: it's not standardized. They're putting the primary .NET components (C# and the common language runtime) in the hands of a standards body.

All in all, it sounds like this is MS hedging their bets. Having a version of the .NET runtime available for *nix would mean that MS could start trying to lure shops using Java into the MS fold. If C#/.NET become formally standardized, given the number of open source developers out there, someone, somewhere, will do the hard work for them and make their environment available elsewhere (and everywhere...)

Meanwhile, while no *nix developer would think about corrupting their precious kernel to make .NET run any faster, MS has no such qualms. They will probably be tweaking Win2002 to get every last drop of performance from .NET, so they can point at Linux - and the open source supported versions of .NET - and say "See, you can even run your .NET solutions on these low-end systems; and when you're ready to step up to the big time, you can just move your apps over to a real enterprise OS..."

If Corel(WordPerfect) dies, M$ is a Word monopoly.

I'm surprised not to find any mention of the fact that M$ killed off WordPerfect by bundling Word (a proprietary and arguably inferior product,) and is once again in jeopardy of having evidently engaged in successful anti-competitive behavior.

If Corel dies, M$ find itself in deeper water with the anti-trust case back on again. If they don't play nice, like invest big in Corel, there'll be a courtroom full of Ottawans who will gladly make the trek to heckle the M$ lawyers.

Remember how Word '97 couldn't read some files from earlier Word versions? If you wanted to read '97 files you had to update. Whether you wanted to or not or needed to or not.

This coming on the heels of having to update to the previous version of Word, not bcause you wanted to but because they were bundling enough copies with big enough clients that you ended up needing to switch because you couldn't read the files.

If I tried M$s sales tactics, I'd be in jail. And deservedly so.

Irony for the WINE project anyone?

Doesn't this mean that Microsoft is now paying other people to reverse engineer its own API? What a bizarre world we live in...

Beat 'em, buy 'em and leave them on lifesupport

Do I see a pattern here? MS beats competition (_A_pple, _B_orland _C_orel etc.) to the ground before grabbing a stake in them, "settling legal issues" and leaving them on lifesupport so that everything looks fine and dandy to the gov't watchdogs. Was Corel's Office for Linux a real threat to MS, and what will become of Corel's Linux initiatives after this?

IIRC some state attorney-generals were planning (in '97, '98?) to sue MS for using the Windows monopoly to kill competitors to MS-Office, but that suit was put on a backburner when the DOJ managed to pull the AGs together for the browser/anti-trust case instead. Perhaps Corel didn't have the money to pursue that suit and settled for MS Airsupply instead. How sad, how MS.

Anyway, now I almost hope that Corel the MS-subsidiary would get out of the Linux space and leave the arena to companies and communities not owned by Microsoft.

Re:Same trick new company.

The anti-trust case against them has nothing to do with whether there IS competition to Microsoft's products. It has to do with whether their business practices hindered competition and whether they used their monopoly status in one area, operating systems, to create a monopoly in another area, Browsers etc. IANAL and I'm far from being an expert in anti-trust law, but I do know that the issue has never been whether there IS competition, only whether they had hindered competition.

Lee Reynolds

It's just a payoff for Corel to port apps to .NET

MS needs competition on the .NET platform too. Without some competition their DoJ situation as well as public acceptance of .NET is at increased risk. Corel simply makes the next most competitive Office suite on Windows and MS needs it to be on .NET too.

IMHO, it has _nothing_ to do with Linux. (doesn't everything posted on /. have to have something to do with Linux? :)

Okay, seriously, in order for MS to sell .NET as a serious alternative to locally installed apps they also need stuff like a half decent drawing and painting programs. MS's own attempts at such programs haven't exactly been well received (understatement) - so who do they turn to?

Adobe? not a chance, it'll be a lond time before their heavy duty apps are .NETed.

Corel's got the goods. Half decent programs marketed at consumers and seriously in need for some cash infusion and positive PR.

It was probably a no-brainer on both sides.

OFF TOPIC QUESTION:
Does anyone else think that Corel may be rethinking their Linux committment anyway? -- Their distro, rejected by core Linux users, and the OS on the whole still not ready for Mom & Pop systems - has left them with a costly investment that isn't showing any signs of making money in the near future.

Perhaps Eazl/Helix will have more success as the OS will have had more time to mature and begin to approach some semblence of (consumer-level)hardware compatability parity with Win9x by the time they debut their consumer oriented offerings. (usb, ieee1394, "soft" printers, DVD...)

Remember MS / Inprise?

This is a VERY similar deal to the one MS cut with Borland/Inprise about a year and a half ago. Borland's legal claims were actually pretty strong (especially for unfair hiring practices: MS crippled whole teams by throwing multimillion-dollar offers at dozens of key developers), but Microsoft also took a fairly large (10%) stake in Inprise. This was the huge boost in that company's bankroll that enabled them to get back on their feet and become the competitive company that they are today. The deal included all the same "Borland agrees to support MS's API of the hour" stuff as well. Note that Borland started the Kylix project (Linux port of Delphi and C++Builder) only AFTER receiving this Microsoft infusion, so I think the conspiracy theorists should just relax. There are, however, much more compelling antitrust reasons for this deal. If WordPerfect Office completely disappeared (which was pretty unlikely, but not 100% impossible), there would be a whole new line of antitrust inquiries against future versions of Office. Their move to a subscription model could be seen as classic monopolistic behavior (now that they're locked in, we won't even have to come up with upgrades anymore). The real threat to Corel's Linux strategy is the fact that they're not making a lot of money from it (Corel Draw for Linux, anyone?). --JRZ

Re:What is MS after?

I am suspcious about .NET, because it looks like another way to make proprietary MS technologies defacto standards

Yes, this is the standard MS way. As I pointed out elsewhere, though, one of the real business weaknesses of Java is the fact that Sun has refused to submit it to a standards body. Proving that they will do the right thing, if only for the wrong reasons (to kill Java), MS is planning on handing C# and the .NET CLR over to the EMCA. You might be interested in reading The Microsoft.NET Strategy: Risky, Brilliant, or Both? [ddj.com] in Dr. Dobbs:

Now here comes the real shine in .NET. When repeatedly asked what prevents C# and CLR being ported to any operating system (say Unix or Linux), often with wry smiles Microsoft officials, often with wry smiles, said "nothing." This means the .NET Framework of C# and CLR makes Microsoft software not only highly interoperable but also portable. So if Linux takes off, Microsoft software will be there. If some .NET appliance software/hardware combination skyrockets -- Microsoft software can quickly move there. And if the DOJ splits up Microsoft, C# and some portions of CLR are already pledged to be standardized through the European organization, ECMA.

Same trick new company.

Jan 98. Steve Jobs is about to step on stage and announce a slew of new products, including OS X. During his speech, Bill Gates himself is invited on the stage to annouce that MS is investing in $250 million in Apple (non-voting stock) and the MS was releasing Office 98 for the Mac (which still has features Office 2000 doesn't have).

What did MS get out of this? IE on Mac desktops everywhere and MORE importantly the validation of Apple Inc in the eyes of consumers. This meant that Apple could continue to offer it's products in the same exact stores as MS does. MS makes IE standard (which it is even on Macs), and maintains the view that MS is not alone.

Move forward to Oct 00. MS invests in Corel. Why? Easy, MS NEEDS Linux and more speficially, Corel, which makes an Office suit which it BUNDLES with a Linux, to continue to exist. If Corel die and it's Office Suite divested, it adds to the arguement that MS needs to be broken up. If Corel thives and lives in the consumer space, just as Apple has, MS can point to them and say, "Hey, they bundle Office, and a share of the desktop space...".

MS investment in Apple justified Apple in the consumer world at a time when they were down. MS investment in Corel will do the same.

They can't let Corel die. It's makes bad business sense.

WordPerfect.NET

WordPerfect.NET -- Now *there's* a scary idea....

Double-Reverse-Engineering...

If they want "Windows everywhere," and they will get called upon to support desktop applications on WINE, they could want to ensure that WINE is in fact able to run.

This is embrace, extend and extinguish: if Office 2002 runs out-of-the-box on Linux+WINE, trouble free, and your company has sold its soul to Office subscriptions anyway, why fight the headaches of StarOffice or other half-compatible solutions?

What about the Debian angle?

MS now owns considerable stock, albeit non-voting, in a company that vends Debian commercially. For some reason I find that amusing.

Bruce

Ironic Investments

It might be amusing, but it's a very old joke. MS has quite a few investments like this. For example, Microsoft's stake in Inprise/Borland is helping finance Kylix -- which is being marketed as "VB for Linux." What many of these investments have in common is that they're in companies that have settled lawsuits with MS. It's an open secret that these stakes are part of the settlement -- by making it capital instead of a cash payment, MS gets a tax break.

I don't know offhand if there's any Corel-MS litigation recently. But it wouldn't be suprising if the new Corel management used MS's current troubles to extract a little greenmail. After all, they own WordPerfect, Paradox, and Quatro Pro -- all products which MS succeeded in burying, whether by fair means or foul. If this is true, neither company will ever, ever admit it.

__________

Worse, much worse, than "irony"

I see something much more sinister for the WINE project that Microsoft simply killing off Corel's involvement in WINE.

Microsoft signs a special deal so Corel gets access to Windows source code "to help build .NET." M$ sits still for six months. M$ then sues the WINE project, claiming that some of Corel's contributions are covered under NDA. Of course, M$ won't have a leg to stand on, but its ability to draw out court cases will kill off WINE.

I believe the WINE leaders should thank Corel profusely for their contributions in the past -- and immediately cease to accept any further contributions from Corel.

Maybe this isn't so bad...

I mean, think about the benefits that it will spawn. Better D3D support in Bryce and Poser. Secret optimizations for Draw. Full .DOC compatibility for WordPerfect.

It's time to start thinking outside the Linux box.