February 8, 2006 12:00 PM PST

To grow, Borland to cut off its roots

Once again, it's time for Silicon Valley stalwart Borland Software to reinvent itself.

The company on Tuesday said it intends to purchase testing tool company Segue Software for $100 million in cash and sell its highly regarded but low-margin developer tools business.

Executives said the acquisition and divestment is intended to accelerate an ongoing realignment at the company: rather than sell one-off developer tools to programmers, Borland has been trying to sell large suites of tools to high-level technology executives.

"It's remarkable that they've been able to hang on and remain a reasonably sized company," said 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."


What's new:
Borland is selling its development tools to focus on high-end lifecycle tool suites and will acquire testing company Segue Software for $100 million.

Bottom line:
Open-source and increased competition are forcing Borland to abandon its traditional business and focus on new areas of growth potential.

More stories on this topic

In fact, Borland announced Wednesday that fourth quarter revenue declined 14 percent and losses grew to $9.6 million. But exiting the development tools business, where the company sells JBuilder, Delphi, and C# Builder, is a dramatic--and potentially risky?move for a company with a rich history in software development and a strong following among programmers.

It's also another major shift in strategy at Borland, which has had to make over its 22-year history so that i could adjust to competitors and changing habits among its customers.

Today, Borland's traditional business is being undercut by open-source. In the past two years, the rise of freely available open-source IDEs, notably the Eclipse software, has cut the legs out from beneath the stand-alone tools market, said analysts.

Over the past three years, Borland has acquired a number of specialized tools providers and recast its product line around so-called application lifecycle management. These suites provide large software development organizations with tools tailored for different stages of the development process, including gathering application requirements, modeling and testing.

Segue Software, based in Lexington, Mass., has a line of products for testing application performance and spotting bugs before and after they go into production.

The big picture

Although the market for IDEs has become less profitable because of free open-source products, analysts said demand is growing for more complete development-related offerings.

Software development projects are more complicated today because corporations often outsource portions of development jobs and many are shifting to a modular, flexible application design, called a service-oriented architecture.

CONTINUED: Large scale competition…
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Borland Software Corp., Segue Software, software development, development tool, IDE


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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.
Posted by just_some_guy (231 comments )
Reply Link Flag
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.
Posted by Slylencer (11 comments )
Link Flag
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.
Posted by fields24 (2 comments )
Link Flag
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.

Posted by rayl (1 comment )
Reply Link Flag
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.
Posted by skarro (1 comment )
Reply Link Flag
Story is somewhat misleading
Better to get it from the horse's mouth:

<a class="jive-link-external" href="http://bdn.borland.com/article/0,1410,33439,00.html" target="_newWindow">http://bdn.borland.com/article/0,1410,33439,00.html</a>

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.
Posted by Trane Francks (936 comments )
Reply Link Flag
Good point!
That's a pretty significant detail for the Cnet author to leave out!
Posted by just_some_guy (231 comments )
Link Flag
The horses mouth is not very consistent
<a class="jive-link-external" href="http://bdn.borland.com/article/0,1410,33303,00.html" target="_newWindow">http://bdn.borland.com/article/0,1410,33303,00.html</a>
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."
Posted by fields24 (2 comments )
Reply Link Flag

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