"The customer never bought the idea that the networking vendor would have better applications because they would be network-enabled," he said. "There was no real leverage there," he said.
Waxman said the Wordperfect products had not worked for Novell because they did not sell through Novell's traditional channel of so-called value-added resellers, or V.A.R.'s.
"We see this as more of a partnership than a selling of an asset," said Jeff Waxman, executive vice president of Novell's applications group. Through this transaction, Novell will acquire a 20 percent stake in Corel and a seat on Corel's board. "The Wordperfect products always win in reviews where they've lost out is against Microsoft's pre-installations" - the PC's that come bundled with Microsoft programs. "We've been pretty successful by competing aggressively, just like Microsoft, so we're confident," he said. "Wordperfect and Perfect Office are essentially being marked to market as the quality and viability of that franchise has eroded over the last two years," he said.īut Michael Cowpland, Corel's president and chief executive, said that the company could exploit the Wordperfect franchise by using the same kinds of marketing tactics and bundling deals as Microsoft. "Clearly for Novell, it frees them up to focus on the really tough problem, which is revitalizing Netware," said Peter Rogers, an analyst with Bear, Stearns, referring to Novell's core networking software program. Novell shares closed at $13.50, up $1, in Nasdaq trading, while Corel shares gained 81.25 cents to close at $11.375. The deal appeared to please both Novell and Corel shareholders. Corel plans to maintain Wordperfect's Orem, Utah, headquarters. It will license the Groupwise groupware application and the Envoy electronic publishing software from Novell. But Wordperfect and Novell proved a poor fit, and the products have lost market share to Microsoft.Ĭorel, which is best known for the Corel Draw graphics program and the Ventura desktop publishing software, is acquiring the Perfect Office application suite, Wordperfect word processing applications and Quattro Pro spreadsheet.
The aim at the time, by its former chief executive, Ray Noorda, was to create a company that could compete head on with the Microsoft Corporation. Novell acquired the Wordperfect Corporation in a stock swap ultimately worth about $885 million, then purchased the Quattro Pro spreadsheet program from Borland International Inc.
of Ottawa, Ontario, for cash and stock valued at about $115 million - far less than it paid for Wordperfect just 22 months ago.Ĭorel will also make royalty payments of at least $70 million to Novell during the next five years. said today that it had agreed to sell its struggling Wordperfect unit and related products to Corel Inc.
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