Corel making noise in the suite market

In six months of selling its office application suite, Canadian company Corel is making measurable progress in the market.

It has been just a little over six months since Corel acquired Novell's applications business division. But already the Ottawa company is making some headway in the suites market.

Microsoft's Office product remains the dominant suite, with 76.5% of the market, according to Dataquest, a research firm in San Jose, California. Corel has just 3.4%. But Corel's aggressive campaign to forge bundling deals with hardware and software developers has sparked a surge in Corel Office sales at the retail level, which includes computer outlets, superstores and electronics stores. Corporate users typically establish an account with a software distributor rather than go to a mall to make a purchase.

In retail sales, Corel Office has 51% of the office suites market, ahead of Microsoft's 45%, according to recent figures from PC Data, a market research firm that specialises in the retail channel. Lotus's SmartSuite has 4% of retail suites sales.

"Corel has been pretty aggressive at retail and accomplished what they set out to do," says Jeff Silverstein, editor of Software Industry Bulletin, an industry newsletter in Stamford, Connecticut. "But it's unclear whether that will translate into an increase in overall market share." Silverstein attributes some of the spike in Corel's sales to the recent debut of a new version of WordPerfect Suite. "Plenty of WordPerfect customers held off upgrading to see who was going to buy the products," he says.

Trying to gain even more ground, Corel has announced a deal to bundle Netscape's Navigator browser with its Corel Office suite of productivity applications. The move is just one in a series aimed at combating rival Microsoft Office, which ships with Microsoft's Internet Explorer browser. Also, Corel has announced a deal with Compaq to bundle CorelDraw 5 with Compaq's Presario line of consumer PCs.

Microsoft, having noticed Corel's aggressive OEM moves, has started forging its own bundling agreements. It has announced that it will bundle the Macintosh version of Office on some Apple Power Macintosh models in Europe. That is Microsoft's first Office bundling deal with Apple, although the software giant has an agreement with Macintosh clone maker Power Computing to bundle Office for the Macintosh on high-end machines. To prevent further erosion of its dominant share, Microsoft will add WordArt, a drawing package, to Office 97, which is due by year's end.

Sources close to Microsoft say company officials were worried that Microsoft Office was losing sales to Corel Office because Corel's suite includes its best-selling CorelDraw drawing package.

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