Columns

Corel’s unknown saviour

Ross Laver November 29 1999
Columns

Corel’s unknown saviour

Ross Laver November 29 1999

Corel’s unknown saviour

Ross Laver

He’s baaack!

Little more than a year after his company’s stock hit bottom, and five weeks after regulators charged him with insider trading, Corel Corp. CEO Michael Cowpland was strutting around the Comdex trade show in Las Vegas last week a happy man. Not long ago, the verdict on Bay Street was that Corel was as good as finished. Yet in the past eight months, its shares have staged an astonishing comeback, rising more than 600 per cent to last week’s high of $21.65.

Cowpland, Ottawa’s answer to the yo-yo, has bounced back many times in his career, most famously after he and Terry Matthews bailed out of Mitel Corp. in the early 1980s. Matthews went on to start Newbridge Networks, while Cowpland lost millions on a series of ill-fated start-ups. Corel, launched in 1985, itself almost went under before Cowpland spotted an opening in the graphics software market and set about filling it. That led to CorelDRAW, which debuted in 1989 and became a huge success.

Ever since, Corel has struggled to produce another hit. If the share price is any indication, the company may finally have done it—thanks in part to a gifted young programmer who no longer works at Corel but played a key role in shaping its strategy.

His name is San Mehat, the son of Indian immigrants who moved to Ottawa from Winnipeg when Mehat was 12. As a student at Sir Robert Borden High School, Mehat loved English and computer science but couldn’t stand sitting in a classroom. Most of what he knew about programming he learned at home, having acquired his first computer when he was 8.

In Grade 11, desperate for some real-world experience, Mehat enlisted in a co-op education program. He soon found himself working part time at nearby Northern Telecom. The senior engineers put him to work in the processor architecture group, programming software that simulated the next generation of phone switches.

One day at lunch, Mehat was lamenting the fact that his home computer—a PC running Microsoft Windows— wasn’t as versatile as the high-end machines at Nortel. One of the older engineers suggested he replace Windows with a new operating system, Linux, the source code for which was freely available on the Internet. Mehat did and was delighted by the result. For the first time, he could delve into the guts of the operating system and tweak it as he saw fit.

After high school, Mehat and a friend launched their own business, which evolved into Ottawa’s first commercial Internet service provider. From there he moved to a local defence contractor and then to Milkyway Networks, an Ottawa company that was doing leading-edge work in network security. He might have stayed there but for one thing: in 1997 Milkyway chose to focus its efforts on Windows NT computer systems. Mehat, unhappy with that decision, jumped to Corel, which was building its own network computer and was looking around for a suitable operating system.

At Corel, Mehat became a kind of Linux evangelist, working closely with a team of engineers and product managers. Unfortunately, the man who ran their division was far less supportive of his efforts. For months, Mehat worked surreptitiously, determined to prove that Linux was better suited to the company’s needs than the technology Corel had been pursuing. Finally, he showed his supervisors what he had done. They loved it, but the head of the division blew up when he realized what had been going on behind his back. “That was the fight to end all fights. He basically smothered what we were doing,” Mehat recalls.

Unbeknownst to Mehat, however, one of his supervisors had been keeping Cowpland informed of his work. Soon, Mehat and the CEO were chatting regularlyAs Cowpland’s interest in Linux grew, Mehat introduced him to one of the Linux world’s bestknown figures, Bob Young, the Canadian-born chairman of Red Hat Software Inc. Finally, in the early summer of 1998, Cowpland fired the head of Mehat s division and announced that Corel would henceforth focus much of its research and development on Linux-based software.

It was a risky move, but 18 months later Linux has emerged as one of the hottest trends in the software industry—which in turn has given new life to Corel. Mehat isn’t doing badly himself: at a conference in Silicon Valley last March, he was offered a top job at VA Linux Systems of Sunnyvale, Calif., a fast-growing designer of cheap, powerful computer servers. The company is now preparing to go public, at which point Mehat—who turned 25 in September—will almost certainly become a millionaire. “I’m just now starting to get setded here, but the life is absolutely incredible,” he says. Adds Mehat: “I owe everything I am to that high-school co-op program.” And whether they know it or not, Corel shareholders owe a lot to San Mehat.