Corel denies MS forced Linux shift

Corel's decision to spin off its Linux business was not influenced by its financial backer, Microsoft, and could actually spell bad news for the Windows giant, according to Corel's chief.

Speaking to vnunet.com, Corel's president and chief executive, Derek Burney, said that part of Corel's alliance with Microsoft, which saved it from bankruptcy last year, was about "porting [Microsoft's] technology to Linux. So they might be unhappy that some developers will be disappearing."

Burney stressed that at no time, "before, during or after", was Microsoft involved in Corel's decision to spin off the Linux operating system element of its business.

Last year Microsoft invested $135m in Corel, a rival in the personal productivity applications space, effectively saving it from bankruptcy.

Burney said that the spin-off decision was taken because while Corel's Linux was successful in the desktop environment, it had no presence in other markets, such as Linux server software.

"We needed to have an all-round Linux solution to be sound. We needed to acquire the missing components to add to those we already had, or spin off into a company that has the missing pieces. Linux is not just a desktop operating system," he said.

Comparing Corel's dilemma with Linux to that which 3Com faced with Palm, which was eventually spun off, Burney said: "3Com realised that Palm could grow but that it would be lost in the reshuffle of the company. I have always said that we are unleashing the power of Linux."

Burney said he agreed with comments from Gartner analyst George Weiss that IBM is poised to solely reap the profits of Linux: "The Linux companies need to get together. There need to be more mergers so there is a solution from one company that offers all the technology."

He added: "If you move to Linux, there needs to be the same single support call as there is with Sun or Microsoft."

Asked whether IBM is in the running to acquire the Linux spin-off, Burney said: "We do not rule that out."

He would not comment on a Reuters report that New York-based Linux Global Partners will purchase the Linux desktop operating system for $5m.

However, money is not the sole goal of the spin-off, according to Burney. "We have put our heart and soul into Linux, and we would desire to keep some type of stake."

Ultimately Burney is confident that the "single focused path" will reap dividends for the company. "We will tap into the creative element and focus on creative products," he said. "We want to be first in the web graphics arena."

This focus will form Corel's future acquisition strategy. "We know where the company is going, and having a single direction we are confident we can achieve 20 per cent annual growth."