Interview: Corel on Sun, Open Standards

BetaNews: That leads into our next question. Your company was one of the founding members of the committee. What happens if Corel sees a market for it? How long would it take to implement OpenDocument in WordPerfect?

Richard Carriere: Well, this is where I would like to have a crystal ball; I'm really not sure. At this point, this is one of the avenues where the market could go, but is it where it will go? I'd like to be the one who has this answer.

The biggest problem you have when you create new file formats is what do you do with all the legacy formats? What do you do with the fact that people -- whether its consumers, small businesses, or enterprises -- take a cycle of three to five years before changing their hardware and software? You can't just turn on a switch and turn off the other one. And our approach at Corel has always been to support whatever standards are relevant, and make sure we support people who are in a changing world.

So in that sense, we will welcome broader adoption of open standards, whether its ODF, XML, or other formats like PDF, but I don't want to predict when it will happen. The market has been dominated by Microsoft-dictated standards for quite a while, and we've been supporting these formats and our compatibility has been praised very often in the press as being the best alternative. I don't see why it would change when and if other formats become broad standards.

BN: But Massachusetts recently made an announcement to standardize on OpenDocument. Do you think that's the beginning of ODF becoming something bigger than it has been in the past - when it was a good idea, but no real practical application?

RC: We replied back to the CIO of Massachusetts when he asked for comments. We are supporting emerging standards, and we're supporting the state of Massachusetts' interest in going to open standards, because it levels the playing field for competitors. Then the users will judge on the sheer quality of the product.

But their announcement was just the beginning as far as I'm concerned. It was not an announcement that they would go with one open standard by "X" date, it was more: "Well, going forward we want to invest in software that supports open standards," with open standards yet to be defined. Is it ODF? Is it going to be exchanging documents in PDF? Is it going to be something else? Is it even going to be a proprietary format that is open and licensed for free to the various players? That is purely speculative at this point.

BN: Does Corel feel confident that you can compete with Microsoft Office, not only in business but on the consumer front as well?

RC: This is where we have to be careful in talking about "competing" with Microsoft. We are offering a choice to anyone in the market who wants an alternative to Microsoft Office. In recent years, we've held around 60 to 80 percent of that market for alternatives, and we expect that to continue in the consumer, small business and enterprise space - particularly in the government and legal verticals where we are very strong.

But you'd laugh at me if I pretended to go head-to-head, face-to-face against Microsoft, which has billions of dollars of revenue and profits in that market. We'll be there for anyone who wants an alternative, and I believe more and more people want alternatives, so that’s good news.

BN: Do you think OpenOffice.org is helpful to Corel or more of a competitor?

RC: Well, I would say it's helpful that there is press around a product like OpenOffice, because it certainly turns on the light on the availability of alternatives. It's a non-supported free product that has been around for many, many years and still does not have any meaningful user base. Is it a competitor? I'm not sure.

The vast majority of consumers, small business and enterprise customers want software that is supported by someone. If tomorrow HP, Dell or Sony started shipping their machines with OpenOffice, who would answer the support calls? The economics would not make sense.

If you look at the only publicly discussed deployment of OpenOffice, with the city of Munich in Germany as of today having OpenOffice through a contract with IBM, they signed it knowing it would be more expensive than just upgrading their entire Microsoft Office infrastructure. But they still decided to go ahead for other reasons, and now two years after they made that announcement, what I'm hearing is the costs are going up. They are years from having fully deployed that solution, and at the end of the day, the economics are not there.

In that sense, I would say OpenOffice is not a serious alternative that is used in the market today. It's used in the labs, and we have copies just like any other company that's watching what's out there, but it's not used by real people or by real businesses.

BN: So what you're saying is the main drawback of a program like OpenOffice.org is a lack of a support structure? Because it's open source and free, it's "buyer beware?"

RC: Well, I think that is what's happening. If you have a problem with a printer driver or anything, whom are you going to call? You could go on the Internet and contact some community of engineering students who develop drivers in their dorm room. I'm sure people who are really, really tech savvy have always done these things, and that’s fine. But for the average customer you're much better off paying a reasonable price to a well-established software vendor that develops a high quality product that would provide you support.

BN: What is the target market for WordPerfect? Are you going to try to move more into the consumer market?

RC: I would say we already have a strong base in the consumer market and the enterprise market -- especially in the government and legal segments -- and we continue to serve it and seek new growth opportunities there. This is how you see, for example, the Department of Justice last year renewed a 50,000-computer agreement for five years. You’re talking about an 8-digit deal overall, so we have some of these deals that won't go away because of the quality of our product, because of the value of our pricing, the flexibility of our licensing, and the quality of our support.

Where we've been successful recently to grow the business even faster is in the consumer and small business space. There are several reasons for that. One reason is consumers and value-conscious businesses are looking for PCs that are in the sub-$800 or sub-$500 price point, and when you pay that price for a PC, software cannot be 80-100% of the cost to build it.

If you want a value alternative to Microsoft, you can turn to us and you have a very high-quality and high-value alternative. So we've been very successful in doing that, both in the channel and with OEM. This is an area of growth. I would say we are competing in the value space, and we have a very strong position in the government vertical and also the enterprise space.

BN: Thank you for taking the time to speak with us today, Richard.