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It was founded by Michael Cowpland in 1985, who intended it to be a research laboratory ("Corel" is an abbreviation of "COwpland REsearch Laboratory"). The company saw great success early in the high-tech boom of the nineties with the product CorelDraw, and became, for a time, 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 software in 1996, 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 WordMicrosoft Word is a word processor program from Microsoft. It was originally written by Richard Brodie for IBM PC computers running DOS in 1983. Later versions were created for the Apple Macintosh ( 1984), SCO UNIX and Microsoft Windows ( 1989). It became users to switch, and new users generally want to be compatible with existing users. Corel also failed to stop Microsoft from pushing pre-loaded copies of Word onto new computers, a strategy which eroded WordPerfect's higher market share.

An equally valid concern was that the WordPerfect acquisition fundamentally changed the nature of Corel itself. Whereas Adobe SystemsAdobe Systems is a computer software company, founded in December 1982 by John Warnock and Charles Geschke after they left Xerox PARC to further develop and commercialize the PostScript page description language, which Apple Computer subsequently licensed remained in the graphics and publishing software business, Corel was suddenly no longer solely within that sphere. A barrage of new projects, such as Corel Video, Barista (a JavaJava is an object-oriented programming language developed primarily by James Gosling and colleagues at Sun Microsystems. The language, initially called Oak (named after the oak trees outside Gosling's office), was intended to replace C++, although the fea-based office suite), Corel Computer, and Corel LinuxCorel Linux was a Debian-based Linux distribution made by Corel that was released in late 1999. Corel later discontinued the distribution, but did not remove the former Corel Open Source Development website until March 2002. Xandros later purchased the so, 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 in August 2000 and a new board of directors immediately sought to stabilize operations, promising a renewed focus on the firm's core competencies.

Unfortunately, an ambitious attempt to revitalize product branding under the new president Derek Burney (with the help of consultants from McKinsey & CompanyMcKinsey & Company is a privately owned management consulting firm. Known both internally and externally as simply "The Firm" , McKinsey was founded in Chicago during 1926 by James O. McKinsey, but the modern McKinsey was shaped by Marvin Bower, who belie) turned into a series of missteps. With great fanfare, Burney announced that the product line would be split into five brands. A few months later, it was to be three brands (DeepWhite, Procreate and Corel). And finally, after much delay and expense, it was decided that the company would go back to only using Corel.

In October 2000, Corel announced that it was forming what it called "a strategic alliance" with Microsoft and that Microsoft would be investing $135 million in Corel.

In August 2003, Corel was wholly acquired by Vector Capital , a venture capitalVenture capital is a general term to describe financing for startup and early stage businesses as well as businesses in "turn around" situations. Venture capital investments generally are relatively high risk investments, but may offer the potential for a investor, and was voluntarily delisted from the NASDAQNASDAQ originally an acronym for National Association of Securities Dealers Automated Quotations is a stock exchange run by the National Association of Securities Dealers. When it began trading on February 8, 1971, it was the world's first electronic stoc and Toronto stock exchanges. It is now a private company.