SAN MATEO (02/07/2000) - LARGELY DRIVEN by the rich opportunities they see in the Linux market over the next few years, Corel and Inprise/Borland have merged in a deal company officials Monday said is worth $2.44 billion.
The blending of Corel's success in the budding Linux desktop operating systems and application markets, together with Inprise/Borland's increasing strength in Linux tools markets, figures to give both Red Hat and Microsoft more competition.
"To me the most exciting part of this deal is it offers a single source for Linux solutions. I think we have become the leader in Linux desktop OS sales since we shipped our product last year. On the Inprise side they have the development tools and enterprise-level middleware that should give us a very strong Linux lineup," said Michael Cowpland, who will serve as president and CEO of the new company, which will be called Corel, based in Ottawa, Canada.
"We have a long list of reasons for bringing together our two companies, but our shared vision is pretty straightforward: to lead the development of Linux and other open software technologies that will bridge and accelerate the value of the Internet," said Dale Fuller, currently Inprise/Borland's interim president and CEO, who will be chairman of Corel's board of directors.
Despite the reinforced commitment to Linux on both servers and desktop, Cowpland said his company is not backing away from its Windows development and that the Microsoft platform remains quite viable over the next few years.
"We see Windows as being the cash cow that is funding all this development and being quite strong for the decade ahead. However, we see a tremendous interest in Linux and it moving up as an equal competitor to Windows," Cowpland said.
"We think we have the ideal company to help people facilitate that," he said.
An important initiative for both companies is helping users either migrate from Windows to Linux and/or offer bridges that allow users to simultaneously run applications from both environments.
According to Cowpland the number of users interested in moving from Windows to Linux has doubled over the past year.
Company officials claim they have a total of 55 million users and developers between the two companies, the vast majority of which are Windows-based, presenting them with a lavish opportunity to sell them on a host of Linux products.
According to IDC, Corel has generated $3.2 million in revenue from its desktop version of Linux just in the time it was released last November through the end of 1999. The company released WordPerfect 8 for Linux in December 1998.
Most recently Scotts Valley, Calif.-based Inprise has shipped tools to create enterprise level tools for Linux including JBuilder 3 Foundation, which is a pure Java development environment; and Kvlix, a rapid application development tool for Linux. The company also has plans to offer a free download of its Just-In-Time compiler for Linux by the middle of this year.
Inprise/Borland has been shipping a version of its Interbase database for about two years and its VisiBroker tool for 18 months, according to Fuller.
Under the terms of the deal Corel will issue 0.747 of its common shares for each Inprise/Borland share, which represents $14.94 a share for Inprise/Borland stockholders. Corel will issue approximately 53.7 million shares in order to scoop up all if Inprise's outstanding stock.
The agreement was based on Corel's closing share price Friday of $20.
Users can obtain more information about the deal and the companies' products at the their Web sites.
Corel Corp., in Ottawa, Canada, is at http://www.corel.com. Inprise/Borland Corp., in Scotts Valley, Calif., is at http://www.inprise.com.
Ed Scannell is an InfoWorld editor at large.