To grow, Borland to cut off its roots

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In addition, large corporate customers are seeking so-called governance and portfolio management tools, which give managers a better understanding of how various IT projects are progressing and how to audit projects, analysts said. Market research firm IDC estimates that the IT project and portfolio management market grew to $403 million in 2004, a 16 percent increase over 2003.

Borland, in fact, acquired Legadero last October for IT project management. About a year ago, it bought a consulting company called TeraQuest Metrics, which employs the authors of the CMMI (Capability Maturity Model Integration), a model for evaluating how effective corporations are at software development.

Given the growing demand for lifecycle suites and portfolio management applications--with market revenues expected to grow around 15 percent in coming years--Borland's shift in focus makes sense, said Melinda Ballou, program manager for application lifecycle management at IDC.

However, Ballou sees some potential pitfalls for the company's new strategy, in part because of the competition: IBM, Microsoft, Mercury Interactive and CA.

"Now (Borland) has to stitch all these pieces together and do it extremely well in a very competitive space against the biggest vendors," said Ballou. "It has business resonance--it's attractive. But it's all in the execution."

Neither Borland nor Segue Software has resources of larger competitors and both have had problems maintaining consistent profitability, she noted.

Borland's former CEO Dale Fuller stepped down last July following a disappointing second quarter, which the company blamed in part on a drop in IDE sales. On Wednesday, company CFO Kenneth Hahn said 2006 will involve "a significant operational transition," but the company expects to be profitable in the fourth quarter of this year.

Fresh challenges

Borland's Rick Jackson, chief marketing officer and senior vice president of products, on Wednesday conceded that the company is taking on a lot at once with its planned divestment and a relatively large acquisition amid dropping revenue. But selling both high-end lifecycle suites and individual IDEs "created different operational models" within the same company, he said.

"As we're not a multi-billion dollar company, it's difficult to support two business models simultaneously and advance both," Jackson said.

Jackson said Borland does not have a buyer in mind for its development tools, but the company hopes to sell them as a single entity. Last year, Borland shareholder Robert Coates petitioned the company's board to spin off its developer tool product lines to "restore Borland's market value."

Thomas Manes at Burton Group said the company's success in the coming years "is very much dependent on the management team and whether they can make this transition."

Borland does have a history of dramatic, if not fully successful, turnarounds.

In 1998, the company changed its name to Inprise and said it will focus on back-end middleware software sales to large corporations. Two years later, it took back its original name of Borland because the new name hadn't caught on.

Also in 2000, Borland proposed a merger with desktop software company Corel, but the two companies nixed that plan. Analysts said the proposed merger, intended to give Borland added bulk in the face of growing competition from IBM and Microsoft, did not have clear benefits for Borland.

Borland is also well-known for its unsuccessful attempt to take on Microsoft directly in the productivity application suites in the '90s.

But despite its tumultuous past, Borland today maintains a good reputation and cachet, particularly with software developers, said analysts and industry executives.

"Borland is a perennial contender," said Cornelius Willis, vice president of marketing at open-source start-up SourceLabs and a former Microsoft employee who had competed against Borland. "It's a brand that tech people have a lot of respect for."

[just_some_guy]

Where do these "analysts" come from?

<Anne Thomas Manes, an analyst at the Burton Group. "They were not going to survive trying to be an IDE (integrated development environment) company because nobody pays for IDEs anymore.">


Really? I've bought the last 4 versions of Visual Studio. The companies I've worked at have also bought multiple copies, or site licenses, for Visual Studio.

Maybe Anne Thomas Manes meant to say that nobody pays for Borland's IDE anymore.

[Slylencer]

To paraphrase

Those who can't, analyze.

I've paid for several versions of IntelliJ IDEA out of my own pocket. And recently ponied up dough for TextMate on the Mac.

[fields24]

I also have purchased a few...

Delphi 1, 3P, 4P, 5P/5E, 7P, 8P,
Turbo C++, Borland C++ 4
and was going to purchase 2005 enterprise.

I think i will bail out now.

There is no telling who is going to support
later versions (than 2005 even). It does not
look like Borland is going to. I guess it is
going to be the Inprise fiasco all over again.

[rayl]

zip code

I am wondering whi my zip code is not taking in condideration if I want to by something from the net. They always tel me that I am missing few number in my zip code.

Real

[skarro]

It's a bit sad...

but it was fun while it lasted! I've been a user and admirer of Borland's tools for a long while. It's amazing how they were once always able to stay ahead of the curve. in the 90's they had hands down the best offering when it came to technology. Just compare Delphi (and C++ Builder) to Visual Basic or "Visual" C++ and MFC. To do better than Borland, Microsoft had basically to buy their chief architect and copy-cat their products. (toying with .NET's component library gives an old Delphi user a strange feeling of Dejavu...)
It would be extremly sad if they would end this by selling their great technology to some group which would then basically drop the ball. It would be sad and bad for all those who have remained loyal to their development tools.
I think that the best Borland could do for their developer community (and for the IT industry in whole) would be to take the bold step and Open-Source it all. It's bit ironic, since they are basically a victim of the OS movement, but as things stand that would definetly be the best/right thing to do.

[Trane Francks]

Story is somewhat misleading

Better to get it from the horse's mouth:

http://bdn.borland.com/article/0,1410,33439,00.html

The intention is for Borland to spin off the developer tools section _along with Borland developers_ to ensure that the products don't die.

For me, this could turn out to be better news. Kylix has been dead in the water and relegated to "classic IDE" status under Borland's control. A new owner might very well be convinced to breathe new life into that compiler.

[just_some_guy]

Good point!

That's a pretty significant detail for the Cnet author to leave out!

[fields24]

The horses mouth is not very consistent

See
http://bdn.borland.com/article/0,1410,33303,00.html
for their response to supporting Delphi

"Our goal is to earn their continued loyalty through investment in Delphi technology as well as through open communication."