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Corel Unveils New Corporate Strategy

Corel Corporation (TSE: COR) on Tuesday (Jan 23) unveiled a blueprint for the future that includes a new logo, new emphasis on creativity and a new vision: to Illuminate the Creative Soul.

Designed to reposition the struggling software vendor for long-term growth and profitability, Corel's strategy was outlined today by Derek J. Burney, president and CEO of Corel Corporation. The initiative includes selling off its Linux distribution while retaining its Linux versions of its WordPerfect and graphics software, paring down its WordPerfect offering from 30 international flavors to 4 English-language versions that will also incorporate elements of Microsoft's .NET framework, and placing a renewed emphasis on its graphics software, especially in the Macintosh market.

"This strategy represents the start of an important new chapter in Corel's history," Burney said. "It is a long-term program based on three key principles that will form the basis of Corel's business philosophy for the future: Dynamic Technology, Dedication to the Customer and Disciplined Financial Management."

This blueprint for the future includes a solid foundation, a clear plan, and space for growth through strategic investments and acquisitions, resulting in Corel's return to profitability by the third quarter of this fiscal year, he said. Revenues are predicted to grow at a compounded annual growth rate of at least 20 percent over the next three years, Burney added.

These targets are based on the objectives that have been established for each of Corel's product groups -- Linux, WordPerfect and Creative Products -- over a three-phased plan.

Pursuing Opportunities to Spin Off Linux
The company's expanding vision for Linux includes providing customers with a bundled solution that minimizes the total cost of ownership and eliminates integration issues. To realize its Linux vision and to increase the value of its Linux equity for both customers and shareholders, Corel is actively pursuing opportunities to allow it to spin off the Linux Distribution element of its Linux division while retaining an interest in the new prospective company. Corel will continue to develop brand name applications for the Linux operating system including WordPerfect Office for Linux and CorelDRAW for Linux.

"We're firmly committed to the success of Linux, but our new focus is entirely on creative products." Burney said. "Keeping it inside Corel as a whole could hinder its potential growth."

Making Smart Decisions About WordPerfect
Corel's flagship office suite will generate significant revenues and contribution for the company. Corel recognizes that there are untapped opportunities within its existing user base of dedicated WordPerfect customers and that there is a strong business in satisfying this community.

Corel is reducing the number of WordPerfect versions from the 30 international flavors to 4 English-language versions, with a French Canadian version for Canadian government use. This will allow Corel to gain efficiencies and increase marketing effectiveness for each version, Burney said.

Corel will further enhance its relationship with its WordPerfect customers to ensure that their priorities are addressed with each release and update to the product. Over 70 percent of the new features and enhancements planned for WordPerfect Office 2002 -- scheduled for a second-quarter 2001 release -- are based directly on client feedback. Corel's commitment to its WordPerfect customers will be reflected in targeted sales and marketing programs that will reward customer loyalty through preferred pricing and licensing options. In addition, the company will leverage premium sales channels to service its professional customers in the small-to-medium sized corporate market.

Corel acknowledges Microsoft's dominance with Word, and rather than attempting to fight head-to-head, Corel has chosen