Corel’s Dell, HP deal opens options for schools

In a surprise move, two of the world’s largest PC manufacturers—Hewlett-Packard Co. (HP) and Dell Computer Corp.—have opted to install Corel Corp.’s WordPerfect Office suite instead of Microsoft Works on some lower-end machines geared toward schools and consumers.

The move gives school technology buyers more options: They can save even more money on inexpensive computers or upgrade to various versions of Microsoft Office for an extra charge. It also gives new life to Corel, based in Ottawa, Ont. The Canadian software publisher has struggled in recent years.

According to Lionel Menchaca, who manages public relations for Dell’s Dimension unit, Dell plans to install WordPerfect on all of its Dimension 2300 computers, which Menchaca calls “the standard educational value machine.” Meanwhile, HP will install WordPerfect on only low-end Pavilion models sold throughout North America, the company said.

Menchaca said Dell decided on the switch after discovering that Corel’s product provided similar functionality for a better price than the typically more expensive Works offering.

“I think that they are pretty even when you talk about head-to-head tools,” he said.

Although WordPerfect does not include an integrated encyclopedia program, Dell said it plans to throw in copies of Encyclopedia Britannica for customers who purchase Dimension machines equipped with the Corel product suite.

Considering that the new arrangement allows Dell to sell its base Dimension model for under $600, the switch was made in the best interests of customers, Menchaca said.

“It’s a pretty robust set of tools for a value-based system,” he said. “Any time we can find any kind of savings, we like to try and pass [them] on to the customer.”

Of course, compatibility is another issue. Schools that already have Microsoft Office or Works installed on most machines might be leery of the havoc a switchover could create for swamped technology teams.

But that’s a problem Menchaca said schools needn’t worry about. He said Dell tested the Corel product extensively to make sure its applications were compatible with those offered by Microsoft.

Still, at least one educator says that’s a chance he’s not prepared to take.

“Our whole network operates on the Microsoft core platform, and there are too many potential interoperability issues for us to consider a change. It is one thing for the hardware vendors to say the systems will work together and quite another for our managers to believe it or for interoperability to be an actuality,” said Joe Kitchens, superintendent of the Western Heights School District in Oklahoma.

Microsoft Corp., which also sells the ubiquitous Windows operating system, has been attacked for using its Windows monopoly to pressure PC makers to adopt its other products. As part of its antitrust settlement with the Justice Department, Microsoft has agreed to halt such practices.

Paul DeGroot, an analyst at the independent research firm Directions on Microsoft, said the impact of Corel’s deals with HP and Dell on Microsoft is insignificant—and the software giant knows it. “The fact that [Microsoft executives] didn’t match [Corel’s price] suggests to me they’re not worried about [the deals],” he said. “This is what I would call a minor PR blow for Microsoft.”

Microsoft’s big money generator isn’t Works. It’s Microsoft Office, which sells in the $300 to $400 range for the standard edition and is targeted at businesses and power users. In fact, Microsoft’s share of the productivity-suite market exceeds 90 percent, according to Associated Press (AP).

“Success [in the market] will be dictated by what the Fortune 500 wants to buy,” said Robert Austrian, an analyst at Banc of America Securities. “It’s a tough choice to move away from Office.”

Corel, which has been struggling financially and strategically for years, AP reported, stands to gain more than Microsoft will lose. It expects to add nearly 5 million new customers as part of the deals.

WordPerfect, one of the first word processors, once dominated the industry. But amid ownership changes, its popularity dramatically dimmed in recent years, largely because of the Microsoft Office juggernaut.


Corel Corp.

Dell Computer Corp.

Hewlett-Packard Co.

Microsoft Corp.

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