The State of Corel Corporation

April 28, 2009

For the next few days, I’m going to do a series on where Corel Corporation stands today and then I’ll offer a few suggestions on things I feel would benefit the company and their sales.

In the last week, Corel mailed their annual report to stockholders. I’m definitely no stock analyst, but I’ll go over a few of the relevant numbers. Revenue has steadily increased from 2004 through 2008. Their profits have also steadily increased. Keep in mind that the timeframe includes purchases of some other companies. That means more products to sell and therefore revenue should have increased. The percentage of profits with relation to revenue was a bit lower. So while the numbers were good, there was nothing spectacular. There also wasn’t a disaster.

Since Corel’s stock went public a couple of years ago, its value has dropped dratically. $100 worth of stock in May 2006 was worth around $27 (US) by November 2008. Since then it has dropped to less than half of that value and was even lower before a rally in the last week or so. Clearly the stock market isn’t putting a lot of value in Corel’s numbers.

Of course, we also have to consider the amount of stock that gets traded. 69% of the company is owned by Vector Capital. That means over 2/3 of the stock never gets traded. Another large chunk is owned by institutional investors who are in the company for the long run. All in all, a very small percentage is in play. This means a few trades can have a big effect on the price. That still doesn’t diminish the fact that the price has dropped so much in three years. Yes, I own a few shares, but it certainly isn’t going to affect the price at all if I were to sell it.

Digging a little deeper into the annual report reveals the products Corel feels are important to their success. No surprises on the list. The only Corel product I noticed was missing was Corel Ventura. Not a surprise to me that it wasn’t mentioned since Corel’s management hasn’t had the guts to say anything publically about it in the last five years.

In the section talking about potential threats, Corel listed Microsoft and Adobe as their biggest threats. I don’t think that should surprise anyone either. All companies list threats so nothing bad should be read into the fact that Corel has threats. If we think a little harder about this, do you feel Corel will convert users from Microsoft Office to WordPerfect Office? Also consider there are powerful options like OpenOffice that have no cost. I certainly don’t think WordPerfect is going to be making any gain in the percentage of overall users. Similarly I don’t think CorelDRAW is going to make any significant gains in market share with relation to Adobe Illustrator or Photoshop. If they follow some of the marketing strategies I’ll propose in the next few days, they might gain a few percentage points. I just don’t think that will come by convincing users to switch from Adobe’s products to Corel’s. Those gains will probably come by developing new markets.

After reading through the report, I didn’t see a lot of encouraging news. I also didn’t see anything that told me Corel wouldn’t be around for quite a while. I really feel like Corel has done a very poor job of marketing in recent years and I will lay out a few ideas I have for improvement. They may not follow my ideas. In fact, some of you may disagree too. Please feel free to leave comments with your thoughts. It would be great if we could come up with a killer marketing plan together.

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4 Comments

  1. Anand

    Hi Foster
    I am really sorry to know the facts regarding my favourite CorelDRAW. I am curious to know you suggestions and your views on this issue.

    Anand

    Reply
  2. the 'dd'

    I too am looking forward to your ideas as well as Jeff Harrison’s and a few others that are the movers & shakers in the Corel World from what I can gather after participating on the CorelDRAW forum for the last year. For my part, for now, all I can do is detail a bit of how I use it in my everyday computing life, and maybe it will inspire somebody to come up with some marketing ideas. I do have one overall guiding principal in marketing that I relate to well. And that is, that whatever is done, it has to make it easier, not harder, for a potential client to buy from you instead of the competition. That’s the job of selling… not to sell, but to make it easy for somebody to deal with you, so they will willingly and happily part with their hard earned money.

    Yeah, I’ve used WordPerfect, but more importantly the Open Office Suite. It’s a huge hit in that Office Suite market. Even though I’ve used MOSuite stuff (mostly Excel and a bit of WORD) and still do I absolutely would not put out any more money on it knowing what the OOSuite is capable of. I’ve even had the odd occasion to work with Publisher files people bring me. Not a big favourite of mine. I’ve also used PageMaker a bit. Again, I wasn’t thrilled to use it. Never used Ventura, and probably at this stage, unless someone contracted me to do a major DTP job on their book or whatever for print, wouldn’t need it except as a curiosity for ease of use and compatibility with existing Corel software. For instance I’ve never been enamoured with the image handling capabilities in WORD for small DTP jobs I’ve done… never really used their Publisher program to any great extent. And PageMaker was a bit of a hassle to work with as well when I was doing a Newsletter with it a few years ago. So anyway, I use CorelDRAW daily in my SMALL BUSINESS SERVICES work for everything I’ve found I can use it for from form filling to signage to old CD version conversion to web work to whatever you can imagine it could be used for. It’s become virtually an indispensable part of my everyday computer life just as much as spreadsheet use has along with some other specialized programs.

    Reply
  3. Victor

    Having used Draw for ten or more years, (along with Pagemaker, Photoshop and god forgive me, even that evil Quark XPress), I was always amazed at the negative reputation Corel had with other designers. Even recent graphic arts grads had negative views. One reason was that all, or almost all, graphic arts programs prejudiced their students by a./ using Apple products exclusively and b./ inculcating the idea that CorelDraw was a toy program.
    I believe Corel could and should have done a better job with people most likely to use their products, most particularly at the student/instructor level.

    Reply
  4. Jeff Harrison

    I think many designers consider CorelDRAW a guilty pleasure.

    Corel – and often their users also – have a self esteem problem. We’re victims of a very successful marketing strategies from the competition.

    There is a basic truth that keeps us hanging on. CorelDRAW is a fantastic product, regardless of price. When price IS brought into the equation, the value is undeniable.

    So how can Draw users turn the tables? In 1998, no one was shy to say they liked CorelDRAW. Now we are mocked and demonized, becuase of fashion, not because of the capabilities of our preferred product.

    IMO, it’s easier to deal with this through a reverse campaign than to compete based on features/benefits of the software itself (esp for the price). Draw has already won that war.

    2 ways to go:

    One way is to ensure people understand that it is a viable alternative in 2009.

    I’m brazen and would go for the gold, since life is short. That means being ultra aggressive and declaring war.

    After my campaign Adobe users would be shaken and hopefully feel like Adobe has offered them poor software, at enormous cost, for a very long time. And, for their users? It’s time for a change.

    If Adobe is outraged, the forums are buzzing about this campaign, the campaign invokes great emotion and yet backs up the claims with facts? Now we are selling, not just existing.

    Reply

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Foster D. Coburn III

Foster D. Coburn III is author of 13 best-selling books on CorelDRAW and has been a contributor to numerous technology and graphics-related magazines. Foster has taken many projects, including this Web site, from the early design stage through to a finished piece. He has been a featured speaker at many graphics conferences. His first Web site was built in 1995 and he has been working exclusively in WordPress since 2013.

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