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Tech Industry

Corel taps Web app hosting trend

Corel jumps on the Web application hosting bandwagon in its continuing effort to find new revenue sources.

Corel has jumped on the Web application hosting bandwagon in its continuing effort to find new revenue sources.

Canadian-based Corel is teaming with Channelware, a business unit of Nortel Networks, to rent its software applications to customers. The initiative also marks the first program involving distribution of Channelware's NetActive software through retail stores, the company said.

Starting in June, Corel Print House Magic 4 featuring NetActive will be available for customers to rent at select Blockbuster locations in Austin, Texas, and in Anchorage, Alaska.

Channelware's NetActive technology will be embedded in the Corel software, making it possible for customers to rent the software for 72 hours. Once the customer brings the CD-ROM home and launches the application, the software will connect to the Channelware Activation Server, the company said.

A one-time InstanceKey is then delivered over the Web, which enables the customer to start using the software. The NetActive system keeps track of how long the customer uses the software, and offers the customer options for extended use.

Based on CorelDRAW technology, with wizard-driven templates and ready-made samples, Corel Print House 4 is a graphic software suite which allows users to create anything from greeting cards and banners to business stationery and flyers.

Unlike standard video rentals, the customer will keep the software rental CD after the initial rental is over. After the rental period, the user has the option to rent the software again; buy the right to use the rented software on a perpetual basis; or buy retail versions of Corel Print House Magic online.

The application rental agreement is the latest example of Corel's efforts to generate revenue outside of its usual markets. Corel has been plagued by a number of low quarterly results marking a significant lag in sales of its software products.

"The dynamics of the computer world are changing rapidly, and we are keen to use this rental technology to allow our customers to access our products more easily - even without leaving their houses. This is an innovation in the software industry," Michael Cowpland, chief executive officer of Corel, said in a statement.

Reuters reported last month that Corel slipped into the red for the first quarter of fiscal 1999, something the company had expected.

The loss came on the heels of a profit in its fourth quarter, a rare feat of late. In the three month-period ended November 30, 1998, Corel reported net income of $6.8 million, or 10 cents a share.

The company is in a toe-to-toe battle with Lotus and Microsoft in the desktop applications market.

The 72-hour rental will be an approximate price of $5.99; rerenting costs will be $3.99. Customers can buy Corel Print House Magic 4 NetActive Version on a perpetual basis for $29.95. While online, the customer can also purchase the following retail versions of Corel Print House Magic 4 Premium Edition for $39.95.