Borland’s plans to reinvent itself yet again, by exiting the software development tools business, highlights its need to move into the corporate arena to generate more substantial revenue.
The announcement coincided with fourth-quarter reporting of revenue declining by 14% and losses growing to US$9.6 million (NZ$14.8 million).
The company has a long history of providing superior development tools but this market is being undercut by open source, most notably the Eclipse software.
So Borland has set itself to sell software lifecycle tools at the higher level. As part of the move, which was not unexpected, it has announced the US$100 million purchase of testing tool company Seque Software. It will divest itself of its low-margin IDE (integrated development environment) business.
Software delivery optimisation has been Borland’s mantra for some time. The company will now focus on customised solutions, targeting four areas: IT management and governance; requirements definition and management; lifecycle quality management and change management.
Borland’s New Zealand and regional executives are prevented from commenting at this stage about the effects of the IDE divestiture because of SEC regulations.
The company’s development tools business embraces such products as JBuilder, C#Builder and Delphi. The latter was quite revolutionary when it was launched in 1994, and it has a substantial presence in New Zealand, with maybe 2000 users. Around 90% of doctors’ surgery software is written in Delphi, along with a large amount of commercial accounting software.
The New Zealand Delphi User Group is hosted by 123 Internet. Director Gary Benner says everyone in the group has been watching with interest over the past year since a former Borland director made an offer for the IDE business. The group has 255 online members, but Benner says there are perhaps 2000 New Zealand developers, including corporates, using the Borland IDE.
“Developers are looking for a vendor to put dollars into their tools; they’re looking for perpetuity,” he says.
“Delphi hasn’t been at the forefront for the past few years, whereas it was so revolutionary when it came out in 1994. There has been a feeling that, since 2000, Borland has not put in the resources to keep Delphi at the leading edge.”
Benner is positive about the move to sell the IDE business so long as the purchaser is prepared to invest in the product. “If they have the same drive and passion, everyone will be happy.”
He says that in the early 1990s Borland had something unique but that IDE has now become a commodity.
“Most of the students I teach [he teaches part-time at the Wairakei Institute of Technology] see their world on the web. People now are writing in languages they can download.”
Borland has been around as a public company for nearly 23 years. It was actually founded in 1981, in Ireland, by three Danes. In 1998, it changed its name to Inprise and said it would focus on back-end middleware to large corporations. Two years later, it returned to its roots because the Inprise name didn’t catch on. It also proposed a merger with desktop software company Corel, but the two companies eventually decided not to proceed with the plan.