Event
Summary
November 1st, 1999 - Corel Corporation today announced its first major Linux
OEM alliance, which will see its Corel Linux operating system bundled with every
computer motherboard package shipped worldwide by the PC Chips group of companies.
PC
Chips will also ship Corel(r) WordPerfect(r) 8 for Linux and Corel WordPerfect
Suite 8 OEM (for Windows(r)) with its motherboards. In addition, the alliance
calls for a joint marketing campaign for a relationship on Corel's Web site
that will bring additional value and services to all users of Corel software
and PC Chips computer products.
PC
Chips shipped more than 15 million motherboards in 1998 for use in computers
of various brand names within its group of companies, or to third party manufacturers.
PC Chips also ships millions of CD-ROMs, floppy drives, modems, graphics boards,
monitors, cases, power supplies and other peripheral products. PC Chips estimates
that it will ship more than 20 million motherboards and white box units in the
year 2000.
Market
Impact
This alliance will help promulgate Linux even further into the desktop space,
eating into the area still dominated by Windows. Although Corel has recently
caused controversy by its methods of implementing Linux (i.e. complaints that
it has violated some of the terms of the Linux GPL), this announcement should
garner grudging praise from Linux enthusiasts. PC Chips's shipments of 15 million
motherboards last year translates to approximately 15%-20% of the PC marketplace,
so having their manufacturing "muscle" provides more credibility to Corel's
efforts.
This
will lead to diversification of the Linux market - Red Hat presently accounts
for more than 65% of the licenses shipped (See TEC News Analysis article: "Compaq
Partners with Red Hat in Linux Support Deal", October 20th, 1999), but Corel
should take away some of that, as well as from the smaller players.
In
general, this will be short-term good for Linux, since this will attract more
users. For the mid-to-long term, there will be more market uncertainty, especially
once the inevitable consolidation starts and the survivors focus more on each
other than on Microsoft.
User
Recommendations
Users who are committed to Windows or to MS Office will find little of interest
here, and their purchasing activity should not be modified as a result of this
announcement.
Users
willing to consider Linux, and especially those who use (or want to try) Corel's
various applications, will want to investigate this more thoroughly. However,
although there are many loyal WordPerfect users, and there is nothing inherently
wrong in WordPerfect Office, we do not believe that trumpeting Corel's applications
as a draw to Linux will gain sufficient notice throughout the PC-buying community.
One
final concern for potential users: who is selling these systems? Since the large
PC manufacturers - Dell, Compaq, Gateway, et al. - do not advertise that "our
motherboards our manufactured by Company XXX", it will be difficult to determine
which vendors actually use PC Chips' motherboards. The risk here is that a customer
may be forced to purchase these from a relatively unknown vendor, which brings
an issue of corporate viability into play. Users who want to take advantage
of this product should ask Corel to publicize the vendors from whom it is available.