Microsoft is to pump $135 million into its (suddenly former) deadly rival Corel. The injection is approximately equivalent to 25 per cent of the cash-strapped Canadian company, and is intended, according to a joint announcement released after the markets closed last night, to provide a foundation for an alliance over Microsoft's .NET strategy. Apart from that, it's all pretty murky.
Following the example of Apple, which buried the hatchet in Navigator a couple of years back, Corel is now a fully bribed-up supporter of .NET, but Microsoft and Corel are both being coy about what this involves, and skate around the issue of which products Corel might .NET-enable. Some analysts suspect a Microsoft cunning plan to keep a rival applications vendor alive as an antitrust figleaf, but as practically every Microsoft announcement for the past year has included a virtual poke in the eye for Judge Jackson, this can be discounted.
Corel, in deep financial doo, can be bought cheap, so maybe that's the sum of it, and Microsoft will figure out what to do with/to the company later.
As part of the deal the two will "settle certain legal issues," but exquisitely, the execs explaining the deal seemed entirely uncertain as to what those legal issues were. Crueler commentators than us might observe that the legal issues tend to become more certain after you ally with Microsoft.
They will "work together to support the development, testing and marketing of new products related to the .NET platform." What products? They're not telling, but Yuval Neeman, VP of Microsoft's Developer Division, mentions Corel's "expertise in online-service delivery, graphics and interface design," so that might be a hint.
Corel interim president and CEO Derek Burney managed to magic up something Corel had in common with the .NET strategy: "Corel has long recognised the potential of the Internet to speed up the delivery of applications and services to our customers worldwide," and then elaborated, finally getting the L-word in: "Our most recent work has focused on strategies to move our applications, including Corel Draw and WordPerfect as well as our Linux distribution - Corel Linux OS, onto the Web. By leveraging Corel's development expertise and popular product line with Microsoft's .NET platform, we believe we have found a great combination to accelerate this process. .NET promises to be a robust platform that we can use to build innovative, easy-to-use and reliable Web applications and services that will benefit our customers."
A substantial and somewhat turgid passage that will have been severely lawyered before it was allowed out, but even so, you begin to get a message, of sorts. As far as Microsoft is concerned, .NET is a strategy intended to build on open Internet standards in order to string Microsoft products, from low footprint cellular clients up to Win2k server farms, into one big end-to-end services-based system. Microsoft itself has no intention to produce the technology that allows other platforms in on the deal, but partner companies are free, so it says, to do so. And as the system is standards-based, theoretically at least this is feasible, although Redmond licensing deals will always make it more complicated than that.
So Burney is in part grabbing an available lifebelt, and in part grooming itself to fulfil that third party role. How far it can go, and how far Microsoft will let it go, remains murky. From Microsoft's point of view the real action and money from .NET will be at the server and services end, so allowing Corel to .NET-enable its client apps simply means chucking the company a few crumbs. For long-term survival Corel would need to play with servers and services itself, but here the L-word would surely intervene, and again, one must doubt whether Microsoft would let it. ®