Michael Cowpland Tuesday resigned as president, chief executive officer (CEO) and chairman of the board of embattled Corel, to spend his time on "new startup opportunities," according to a statement from Corel.
The news had been expected, according to analysts, who pointed to the company's ongoing financial struggles as evidence that a change is needed at Corel's helm.
Derek J. Burney, the company's executive vice president, engineering and chief technology officer was appointed interim CEO and president. Burney has been with Corel since 1993. Cowpland, Corel's founder, will continue to serve as a director on the board and as a technology advisor, but will not be involved in the company's operations, the Corel statement said.
In recent months, Ottawa-based Corel has weathered a series of bad-news days, including financial losses, layoffs and a failed deal to merge with U.S. development tools vendor Inprise/Borland Corp.
The fear that Corel was coming close to running out of funds was one of the major reasons cited for the failed merger. Word that the merger had fallen through was followed by announcements that top executives had resigned, ironically along with some much-needed financing for Corel.
Late last year, Cowpland was charged with three counts of violating Ontario securities law, allegedly using insider information about a lower-than-expected quarterly financial report for the third quarter of 1997 to sell 2.43 million shares of company stock for some $US14 million. Cowpland disputed those charges.
A published report after Cowpland's departure from Corel was announced quoted a spokesman with the Ontario Securities Commission saying that the resignation is not related to the commission's investigation of the Corel founder.
Whatever spurred Cowpland's decision to leave, the company is in need of new leadership, analysts agreed.
"It had been expected. Corel had some relatively disappointing financial results for what was a long period of time," said Rob Enderle, senior industry analyst with Giga Information Group.
The news was, in fact, expected before now, Enderle said, adding that the securities business "put Mike under a rather substantial cloud."Even with Cowpland's departure, a turnaround in its financial fortunes could be a way off for the Canadian applications vendor and Linux distributor, Enderle suggested, because "Mike is only part of the problem at Corel." Getting the company back on track will depend on who replaces Cowpland, but finding a new CEO could prove a hard sell for the company.
"Who wants a job that could likely end their career. They'd risk being on a sinking ship. It's a precursor to what may happen at Oracle in the sense of the problems you have with a fairly visible and perhaps less restrained CEO," Enderle said, referring to Oracle chief Larry Ellison, who is known as much for his flamboyance as for his acumen as a CEO.
Speculation at LinuxWorld 2000 on Cowpland's permanent replacement at Corel cast up the name of Dale Fuller, Inprise/Borland's interim president and chief executive officer. In an interview with IDG News Service last month, Fuller said that strategywise, the merger between Corel and Inprise "was a very, very sound deal, it still is today." Trading of Corel shares was halted in Toronto about an hour before Cowpland's announcement because of the pending news.