Borland is shedding its legacy application-development tools and focusing on software designed to bring discipline to the application delivery process.
To reach that goal, Borland is buying Segue Software, which makes software quality and testing tools, in a deal announced this week that is worth US$100 million (NZ$147 million). Borland also plans to shed its integrated development environment (IDE) product lines, which include Delphi, C++Builder and JBuilder.
Borland is divesting itseslf of IDE business so it can build out a suite of application lifecycle management products. Similar suites from vendors such as Compuware, IBM and Mercury Interactive combine tools designed to make software delivery a more predictable and manageable process.
Typical components of these suites tackle areas such as project management and governance, requirements definition, software testing and change management. The intention is to add structure to software projects and avoid common pitfalls such as delays, over-expenditure and misaligned requirements.
Borland wants to keep its IDE business alive but doesn’t have the resources to pursue the application lifecycle management market and maintain its developer productivity tools, says Borland chief exectuive Tod Nielsen.
“Both markets are important, but Borland is not a multibillion dollar company,” he says. “We can no longer give the resources and attention that these two distinct efforts require.”
Market demand, too, is driving Borland’s shift. There’s a lot of momentum around Eclipse, the open source IDE that originated inside IBM and today is managed by a consortium that includes Borland. Trying to sell a commercial Java IDE is getting tougher, as Eclipse continues to win over developers.
Nonetheless, the divestiture is a gamble, says Bola Rotibi, a senior analyst at Ovum. Borland wants to distance itself from its tool-making roots, but those roots have helped fund the company while it tries to establish itself in the broader application lifecycle management market.
“While we believe some shake-up of their product set was to be expected, this sudden move is fraught with potential problems. With the steady revenue that they get from Delphi and the JBuilder product streams, there is a danger that divesting them now is a step too far and too early,” Rotibi says.
Revenue is a key concern for Borland, which is struggling to regain profitability. This week the company reported its third consecutive quarterly loss.