“We’re not as extravagant as the Corel of the old days,” says Shawn Cadeau, the local software company’s senior vice-president of global marketing. “We’re more understated. But we’re quietly expanding and growing our revenue and profitability as a company.”
The much quieter firm – founded in 1985 by Michael Cowpland – made headlines last month with its purchase of video editing software from Avid Technology Inc., and earlier in January when it acquired Rovi Corp.’s Roxio digital media product line.
But Mr. Cadeau says that won’t be the end of Corel’s expansion – it plans to continue adding new companies and capabilities to its growing resumé, and it’s no coincidence that recent purchases have been in the digital media business.
“It’s everywhere these days,” he says. “It’s a growth market and a great opportunity for us, so we’ve been consolidating in that space.”
Corel is also looking to expand in its two other primary business streams: its graphics and productivity unit (including the well-known CorelDRAW graphics suite and WordPerfect Office), and its WinZip compression software line.
Although the company was purchased by San Francisco-based private equity firm Vector Capital in 2010 for $4 per share, Mr. Cadeau says decision-making power remains within the Ottawa office that has learned to make safe bets when it comes to acquisitions.
“We’re not highly speculative in what we do,” he says. “We’re not acquiring something that has no revenue in the hopes that it might someday. We acquire something we know we’re going to be profitable with.”
A LOOK TO THE PAST AND THE FUTURE
Corel headlines have not always been as positive as those surrounding its recent acquisitions.
In 2000, Corel announced that it had bought California-based Inprise Corp. (now Borland Software Corp.) to capitalize on both companies’ Linux development specialties, in a deal that media reports valued at just over $1 billion. But the merger fell through after only three months because of Corel’s steadily declining share price.
Mr. Cowpland, CEO at the time, said the deal was called off because of “significant market changes.” Corel’s shares on the Nasdaq dropped 73 per cent because of poor financial results around that time.
In order to stay afloat, the company announced it would need to cut costs by $40 million a year, and did so by firing 320 employees and restricting various expenditures.
The company managed to stay in business and began to evolve to remain viable.
When Mr. Cadeau joined Corel in 2006, it was a traditional company that did traditional marketing. Now, its marketing strategy has shifted entirely online where every dollar spent can be tracked and managed and the company can reach a larger audience – including the United States, Australia and Europe where the brand’s strengths are greater than in Canada, Mr. Cadeau says.
Despite the expansion of its brand, the Ottawa office continues to shrink. The company had around 350 local employees at the end of 2011 (according to Ottawa Technology magazine) but that’s currently down to 260, the result of “restructuring to better align our company around customers,” Mr. Cadeau says.
Although the company has struggled, Corel maintains it isn’t going anywhere.
“We will absolutely stay in Ottawa,” he says. “A lot of the core culture and capabilities of the company are here.”
WINDOWS OF OPPORTUNITY
Every Corel product runs on the Windows platform because at its roots, Corel is a Windows development company, Mr. Cadeau says.
Corel has developed a series of apps in preparation for the release of Windows 8 this October. One, titled Designs, is a collaboration platform for graphic designers to share and view pieces of work. Others have yet to be announced.
Corel worked closely with Microsoft throughout the development process to ensure its products would run smoothly on Windows 8.
Some have faulted the company for failing to make stronger inroads with the growing legions of Mac users. However, Corel’s products are increasingly available for Android and iOS platforms. Earlier this year, the company released a WinZip product for Apple and Android users to open and use zipped files on mobile devices. More than one million people have downloaded the app, Mr. Cadeau says, adding the cross-platform move will keep the company competitive.
And while the company’s largest rival, Adobe Systems Inc., focuses on enterprise and large corporate customers, Corel targets the individual consumer and maintains a lower price point than Adobe.
Meanwhile, the rise of microtransactions – downloadable apps that fix a simple problem such as photo red-eye – are a constant threat to the company, but Corel believes it can fend off such threats by offering full-featured software allowing users to have more control over their photos, videos and graphics.