It was founded by Michael Cowpland in 1985, who intended it to be a research laboratory ("Corel" is abbreviation of "COwpland REsearch Laboratory"). The company saw great success early in the high-tech boom of the nineties with the product CorelDraw, and ended up becoming the biggest software company in Canada. Corel made many early investors very wealthy, but its strong growth did not last. It attempted to compete with Microsoft after acquiring the WordPerfect corporation, but it failed badly. Corel was forced to lay-off large numbers of employees and Cowpland came under investigation by the Ontario Securities Commission for insider trading.
Concerning the WordPerfect acquisition, Cowpland believed that WordPerfect could be the "Pepsi to Microsoft's Coke". This was a classical marketing perspective, but fundamentally flawed, perhaps reflecting Cowpland's lack of expertise in the software industry. Unlike food items, software programs have strong compatibility dependencies, which make entrenched applications much harder to compete against. Even if WordPerfect were better and marketed strongly, there was simply no compelling reason for existing Microsoft Word users to switch, and new users generally want to be compatible with existing users.
An equally valid concern was that the WordPerfect acquisition fundamentally changed the nature of Corel itself. Whereas Adobe Systems remained in the graphics and publishing software business, Corel was suddenly no longer a true member of that sphere. Many other ongoing projects, such as Corel Video, Barista (a Java-based office suite), Corel Computer, and Corel Linux, also fueled speculation that Corel was trying to reinvent itself but wasn't sure how, or that they were "throwing stuff at the walls and looking to see what would stick."
Cowpland eventually left Corel around 2000 and a new board of directors immediately sought to stabilize operations, with a greater focus on the firm's core competencies.
In August 2003, Corel was wholly acquired by Vector Capital and has been delisted from the NASDAQ and Toronto stock exchanges. The intent is to continue operating Corel as a private company.