Struggling to understand Borland

02 October 2006

Frankly, my dear, although we give a damn, the news (and even the non-news) coming out of Scotts Valley is getting more and more confusing.

First off, we have the DevCo débâcle. The story so far is this: back in February of this year, on the 8th to be precise, we were told that Borland had had the brilliant idea of spinning off its IDE business (Delphi, C++Builder, JBuilder, et al) so that they could concentrate on their core business of waterfall methodology tools and were actively looking for white knights to take it over. Given that the IDE business was making $60M a year in revenues (although the exact figure seemed to drift in and out of focus according to whom you talked), it seemed like it should be a pretty quick sale.

Admittedly, once you started looking into the business and its future, you started to worry about what exactly that future looked like. For Delphi for Win32, it certainly looked rosy; after all, the main competitors were VB6 (stop laughing there at the back!) and Visual C++. But for Delphi for .NET, the equation no longer seemed as easy to understand, and for JBuilder, positively unsolvable. Nevertheless, we were assured by David Intersimone and Alan Bauer et al that suitors were lining up around the block. (Mark Miller used to tell me that he offered $1 for DevCo, but I've never seen him offer $1 for anything so I dismiss that.)

So time went by. The news that made it past the "we can't talk about it for legal reasons" screen seemed to be entirely positive. The division that was slated to become DevCo was allowed to recruit whereas the rest of Borland were cutting back. Nick Hodges joined in June as Delphi Product Manager (a more positive evangelist for Delphi, I cannot imagine) and other ex-Borlanders were re-joining, if not in droves, at least in number. (Funnily enough, Danny Thorpe wasn't one of them.) The Turbo versions were released. Both Nick and Alan were making good noises about DevCo, usually with the admonishment that they were in a "quiet period" so they couldn't talk in detail, but, boy, you'll be amazed and delighted at what happens.

Finally David I. said at the beginning of September (a full seven months after the first announcement, mind) that "Borland is on schedule to announce a buyer in the third quarter of this year. “We have been assured [of that time frame],” he said." Well, the third quarter is over, it's now eight months since the initial statement about the spin-off, and ... nothing. The assurance David I. spoke of was obviously vapor of the thinnest material.

I'm sorry, but to this sanguine -- perhaps, cynical -- blogger, this non-news says

  • Borland are asking too much
  • Borland are not selling what the suitors thought they were getting with DevCo
  • Borland are not selling everything the suitors wanted for DevCo
  • The DevCo business isn't as attractive as it was eight months ago (sales down? future not as bright?)

The second bit of news is that although Borland's revenues are increasing, it is making losses. Second quarter figures indicated that it lost $19M on revenues of $76.9M, but Tod Nielsen was confident at the time that Borland would be back to profitability by the fourth quarter (on the back of what, I'm not too sure). The third quarter has only just finished: it'll be a little while before we get the financial news about it.

And the third bit of news to hit us is the news from last Friday that Borland are giving up on Core SDP, its plan (now two years old) of producing a Software Development Platform. Bizarre news indeed, since as far as I understand it (and to be honest, I haven't spent that long trying to understand what Borland are trying to do with their waterfall-methodology-supporting toolset because I feel it's antiquated and passé in the Agile world I've lived in for the last few years) this was a core part of their strategy for moving forward.

So, since Core SDP is no longer part of their core strategy, just what the heck is?

Maybe they feel that the intellectual property that is DevCo should remain part of Borland? Maybe the revenue stream that is DevCo is much too important for the continuing survival of Borland to be sold for a quick buck (or a quick several million)? Maybe the SDO, er ALM, stuff isn't as attractive as it used to be and Visual Studio Team System is making too many inroads?

Who knows? Certainly not this writer. But, nevertheless, speaking as an outsider, Borland have some real image problems to sort out and stories to straighten. Today's announcement about Borland Lifecycle Quality Management (LQM) offers yet another confusing acronym to go along with ALM and SDO and yet another set of products that aren't quite available yet. I just don't know what they are trying to achieve, what their goals are, what they want to do with DevCo. Certainly Borland themselves aren't helping me to understand, and looking at the share price today, I'm in a boat with many others.

And remember, I'm Chief Technology Officer for Developer Express, one of the primary third-party library vendors for Delphi. If I don't understand what the heck is going on, if I'm not invited to look inside the kimono under NDA for reassurance, Borland and DevCo are in more dire straits than can be imagined.

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