Last week, Microsoft bailed out ailing Corel to the tune of $135 million, a move that closely mirrors the deals Microsoft made in the past with Apple Computer and Inprise/Borland. In each case, Microsoft was propping up a former enemy in dire financial straits, an interesting way of doing business to say the least. The cynical among us might note that Microsoft, desperate to prove that it doesn't have any monopolies, is simply keeping former competitors alive to prove its point. And there could be little debate about that, to be honest. In addition to being former enemies, the companies all had legal cases pending or proceeding against Microsoft: Apple was threatening to sue Microsoft over patent violations; Borland had sued Microsoft because the software giant had stolen its best engineers; and Corel and Microsoft had "certain legal issues" that were alluded to in the press release announcing the most recent bailout. We're still waiting to find out what that was all about.

I wrote about the Corel/Microsoft deal last week in WinInfo Daily UPDATE, noting that money can heal all wounds. The companies are positioning the bailout as a strategic alliance, of course: Microsoft now owns almost 25 percent of Corel's outstanding common stock (Microsoft's shares are nonvoting). In return, Corel has promised to help develop Microsoft's .NET strategy. No offense to the fine programmers at Corel, but it seems odd that Microsoft would need assistance from the tiny Canadian company. So why did Microsoft make this move?

After he read the article about Corel and Microsoft, WinInfo Daily UPDATE reader Eric Bunsen sent me one of the most insightful email messages I've received all year. Eric makes four interesting points about Microsoft, .NET, and Corel, which are worth repeating here:

  1. Microsoft has submitted its new C# programming language to the European Computer Manufacturers Association (ECMA) for consideration as a standard. Microsoft says that standardization will let other vendors create new versions of C# that run on a variety of platforms. In contrast, Sun has consistently steered Java away from standardization.
  2. Microsoft has also submitted the .NET Framework to the same standards body. The .NET Framework will let the .NET Common Language Runtime—ironically, created by ex-Borland developer Anders Hejlsberg, the man who created Turbo Pascal and Delphi—be ported to non-Microsoft platforms, extending .NET's reach beyond Windows.
  3. Corel has been a vocal proponent of Java and Linux, two of Microsoft's biggest problems. If Corel were to adopt C#, which is a threat to Java, C# would become more credible—and potentially as widely available as Java. Corel could port C# to Linux, letting Microsoft continue its public facade of not supporting the open-source OS.
  4. And Corel could port the .NET Framework to its Linux distribution, opening the entire set of .NET technologies to the vast majority of server OSs out there. If Microsoft wants .NET to become the standard, .NET needs to run on non-Microsoft platforms. And nobody has more experience porting Windows applications to Linux than Corel (with the possible exception of Mainsoft, a vendor I discussed in Windows 2000 Magazine UPDATE earlier this year).

Suddenly, the Corel bailout makes a lot of sense. Corel has essentially promised to ".NET-isize" its applications and has said that we can expect to see products such as WordPerfect.NET by late 2001. Can a Corel Linux.NET be far behind? Thanks again to Eric Bunsen for providing the jumpstart I needed to grasp the importance of this deal. perhaps the phrase "strategic alliance" isn't so far-fetched after all.

In many ways, the Corel bailout makes a lot of sense. Corel has essentially promised to ".NET-isize" its applications and has said that we can expect to see products such as WordPerfect.NET by late 2001.