May 2005

As Adobe’s Shadow Grows,
Is Corel Better off or Worse?

You have no doubt heard the news by now: Adobe is making a bid for acquisition that will likely see Macromedia becoming the latest absorptee. That might not be an actual word, but in today’s every-smaller-fish-gets-eaten-by-a-bigger-fish society, it deserves to be added to the lexicon.

There is little doubt that this merger has Darth Vader-like undertones for anyone trying to do business in this space. To whatever extent Macromedia kept Adobe (choose one): in line, on its toes, at bay, the publishing world will now do without such checks and balances. And in a show of false modesty that would have made Bill Gates proud, Adobe officials insist that they needed this acquisition to avoid being further dominated by Microsoft.

So let’s see if we have this straight. One publishing giant swallows whole another publishing giant to create an even bigger publishing giant, and it is done in the name of defense against the office giant. And if my enemy’s enemy is my friend, does that mean that Corel and Microsoft are now friends? Oh yeah…WordPerfect.

To be sure, it is a complicated world in which we live. I was prepared to wax pessimistic for those in the Corel community. On the face of it, what good could be seen in the biggest fish in the pond becoming bigger? Does Corel have any realistic hope of competing with Adobe straight up in any of its arenas? Well, no, it doesn’t, and if there were any illusions to the contrary, they were snuffed out with this merger. Think about it: Adobe stands to own PostScript, Acrobat, and now Flash – that is the content creator’s trifecta. It’s game, set, and match in the professional publishing and graphics space, and Corel can only hope to play around the edges.

But in a conversation with Nick Davies, Corel’s General Manager for Graphics Software, he raised an interesting point in all this: Corel is now the No. 2 player in the game.

Are you laughing at the absurdity of that notion, as I initially did? What kind of perverse ignominy are we talking about here, taking satisfaction in moving up a peg because the two organizations before you became one? But let the man finish: "Retailers need to carry the market leader and they need to carry an alternative. Distributors that have turned to Freehand and Fireworks as the alternatives will now need to look elsewhere. And we think that they’ll look to us.”

It’s not so crazy, actually. In fact, Corel has scratched out a decent living the last several quarters playing the other guy. If the company can sharpen that focus as the other guy, and if that gets software a bit deeper into the sales channels, that can only help.

The other positive that could come out of this, speaking of focus, is to make it clear that Corel’s focus cannot be on the professional market, as the industry defines it. Many paragraphs have appeared in this space in the last 18 months about how Corel’s best destiny is as a supplier of quality graphics products to the business community. This move confirms and reinforces our position that Corel’s target cannot be the Illustrator user who should be using CorelDraw instead, or the Photoshop user who should have some ipephaneous moment of clarity and switch to PhotoPaint.

It should be the MS Word user who has no idea what a graphic is but has been told that she needs to have them. It should be the Excel user who is frustrated by the terrible charting that plagues that program. It should be the tens of millions who will buy their first or their second digital camera this year. And above all, it should be the PowerPoint user who needs a handy and affordable graphics tool for the estimated 30,000,000 presentations delivered every…single day.

You can make book on the fact that Adobe will consolidate and integrate some of its overlapping tools. And the likelihood is high that an all-in-one suite will be introduced that will have potential appeal to the business graphics user. And Adobe officials will probably take a stab at getting the attention of Office users; it would cost them little to try. The problem for Corel is one of proportion: What Adobe would define as a "stab” is not far removed from Corel’s entire annual marketing budget.

It will take about 18 months for this merger to be approved, structured, planned, and implemented. That window is Corel’s opportunity and never before has the time been so right to make a concerted and aggressive push into the business graphics space. Here are the things that Corel needs to do to accomplish this:

• Continue to offer a $249 upgrade. While this sounds condescending to those of us who use the product professionally, an Office user would view a graphics package as a "utility,” and the invisible water mark on the wall to spend on a utility is $250.

• Be everywhere that Office users are and be proactive about educating the masses. A lot of these users think that a graphics tool is the set of four built-in shapes that can be created from the Drawing toolbar, and they have no idea the difference between a vector and a bitmap.

• Have relevant demos on how PhotoPaint can touch up any photo and how Draw can create importable graphics for any purpose whatsoever.

• For the IT guys, show how graphic format issues can be a thing of the past. Show them how Draw can import even a PDF file and then re-export it as a metafile or a PNG file that flows seamlessly into a company’s workflow.

• Rename the program back to CorelDraw. Corel Graphics Suite is an air-puffed mouthful that says nothing.

• Leverage the popularity of Paint Shop Pro and create an entire sub-culture of chic around using it. These users have practically been an underground cult. It’s time to give them their day in the sun.

• And to that end, address the confusion around having three image-editing programs in one family. Painter is a hit with the Mac, understood. But does Corel really need two image editors under Windows? You can make a case for this logically, but practically, the risk is too high that users will be confused and just head for Photoshop.
  
  Should Corel decide to integrate PSP and Paint, the resulting product should be named Paint Shop Pro. There are just way too many users out there to make any other choice.

• And if Corel does that, its next move should be to turn PSP into a verb. Put this down in the pet-peeve category, but we’re tired of hearing it said, and indeed having to say it ourselves on occasion, that "you just need to photoshop the background.” We might not be able to get away with "photopainting an image,” but it’s conceivable that one day we might be able to "paint shop that dark photo.”

Corel has some breathing room. For the first time since it found itself in the short-lived Linux frenzy back in 1999, it has the modest luxury of being able to look past its next quarterly results. The time is now to think about which corner the company can turn to ensure long-term solvency and prosperity in a market niche in which it can make a significant contribution. The Graphics Suite is such a good set of tools for the unsuspecting business user that it is capable of literally improving the lives of the people who become introduced to it.

CorelDraw: it makes life better.

This could be a singular message from the company as it enters the post-Macromedia era.