Struggling Corel casts off Linux

Struggling Canadian software developer Corel has announced a corporate strategy which will see it sell its Linux division, fuelling speculation of intervention from its financial saviour, Microsoft.

The company issued a repositioning statement, announcing major changes it hopes will lead to future growth and a stronger balance sheet.

Corel's decision to sell off its Linux division has bemused some industry onlookers, following the solid commitment which Corel has shown for Linux in the past. Last October, Corel found itself in major financial strife, and the Redmond giant came to the rescue to the tune of £135m.

Despite this backing, Corel claimed its attitude to Linux had not and would not change.

This latest move has raised the question of whether or not Microsoft's influence had any part to play in the spin-off decision. Corel is adamant that it was based on decisions by its key executive management team in order to "prioritise, improve and prosper".

"Microsoft has no influence over the way Corel does business," said Derek Burney, Corel's president and chief executive.

Burney claims that Corel will remain committed to Linux, even after the spin-off, and would retain a stake in the division.

"Corel has been a huge proponent of the Linux movement for some time now, and we have a compelling Linux vision. We know that to offer an end-to-end solution, we need to spin off our Linux distribution to another company," added Burney.

Corel's move is intended to target new customers and market segments - particularly the web content and graphics arena. That market is expected to be worth $2.9bn by 2003, and Corel said it wants to capitalise on that financial potential.

Burney felt it was too early to comment if any jobs would be lost as a result of the spin-off, and could not say who was in the running to buy the division.

He claimed that overall, the company does not intend to cut any jobs, and will actually be adding to the headcount in order to effectively carry out its future strategy.

"Our employees are one of the most important parts of our new strategy, because they will be executing against our clearly set goals," Burney added.

Also published in Computing