Linux, running on ultracheap computers and modified by Corel to be more user friendly, will help Corel compete with Microsoft, Cowpland said. Corel is also working on Linux versions of its office suite.
"In the next 10 years, we think Linux can be as successful as Windows has been over the last 10 years," Cowpland said. "It's going to be just like Windows without the tax."
With $300 PCs now available, "Windows is 25 percent of the cost of materials, which is clearly too much," Cowpland said.
Linux needn't cost so much, he said. "We think that's going to be a compelling advantage, and why Linux is almost inevitable at this point."
But Corel, continually struggling to compete with Microsoft, previously advocated Sun Microsystems' Java technology, before changing its tune in favor of Linux last year. The latest wrinkle was the announcement of a new consumer-oriented version of Linux at the LinuxWorld Conference and Expo in March.
Corel's flagship WordPerfect office suite now claims 22 million U.S. users, up 10 percent in the last 12 months, compared with 44 million for Microsoft's rival product Word, the company said yesterday at its meeting.
But since 1995, the Canadian software maker's stock price has dropped from about 15 to its current level of 3.0625. The company had a return to profitability at the end of 1998, but in March reported a net loss of $21 million.
Cowpland said yesterday the company's comeback strategy hinges not only on Linux, but also increased sales of WordPerfect and other Corel software.
The company also hopes to make money with its Web portal, which will allow graphics designers to post their portfolio online. People who want to buy the artwork will be able to download it from Corel's site, and Corel will get a commission on each sale, Cowpland said.
Despite last quarter's "negative surprise," Corel is "very confident about the success of this quarter and the quarter ahead," Cowpland said.
Penguin Computing and The Linux Store, meanwhile, are trying to provide the hardware underpinnings for cheap Linux. The latter, a publicly traded company, yesterday announced a $495 Linux PC that includes an AMD K6-2 processor, 32MB of memory, a modem, and Red Hat Linux but no monitor.
Corel taking on Linux powerhouses
Corel faces stiff competition from those who already sell Linux, and the situation is complicated by the fact that anyone who wants can download Linux for free.
Red Hat, the dominant Linux distributor, sold 400,000 copies of Linux in 1998 and is working on new, smoother versions. Its next version, code-named "Starbuck," uses the Gnome graphical user interface and went into beta testing on March 28.
Corel will base a Linux product based on the version of Linux from Debian. Though Debian's Linux can be purchased at many sites, Debian is a non-profit organization.
The new Caldera version addresses several of the same areas of Linux improvement on which Corel hopes to capitalize, including an all-graphical environment, automatic hardware detection, and easy system configuration.
But Corel has something the other distributors don't: WordPerfect 8 and several other well-regarded programs. Corel lets people download a basic version of WordPerfect for Linux for free, and is planning to release most other software for Linux as well. Much of this effort will hinge on the Wine effort to write emulation software to allow native Windows programs to run within Linux, which Corel is helping.
Cowpland said all of WordPerfect Office will be available for Linux by the end of the year, including the Quattro Pro spreadsheet software and the Paradox database software as well as the WordPerfect word processor.
By early 2000, Corel also will have its graphics software available for Linux, including CorelDraw, PhotoPaint, and Ventura, he said.
Corel also will use the KDE graphical user interface, Cowpland said.