Borland keeps its developer tools after all

Nine months ago, Borland said it would “seek a buyer” for its developer tools, including Delphi and JBuilder. I blogged about it here. But it’s not happening. Instead, the company announced today the formation of CodeGear, a wholly-owned subsidiary. Why no sale? Here’s the official version (PDF):

The challenge came when we went about separating two operations that have been interlinked for over 23 years. We found we were not able to adequately separate the financials in a way that could demonstrate what we believe to be the true value of this business.

Not what I would call clear, but I think it translates to two things. First, nobody wanted to pay what Borland was asking. Second, there is actually some synergy between the IDE business and the ALM business, a benefit that would have disappeared had the sale gone ahead.

My hunch is that the former is a bigger factor than the latter. Embarrassing for Borland.

Still, a wholly-owned subsidiary is a significant separation. It may be sufficient to deal with the key problem which seemed to be expressed by those on the IDE side of the business: that the company had under-invested in the development tools, using the profits to invest in building up the ALM business.

Then again, IDE sales have been declining for some time, which would suggest that the cash-cow years had come to a natural end. It is not surprising that finding a buyer was hard.

Can CodeGear succeed? Delphi is a wonderful product, but wounded by the rise of Microsoft .NET versus native Win32 code in Enterprise development. On the Java side, CodeGear has “Peloton”, a new version of JBuilder built on Eclipse. I hope to report on Peloton next week. It is up against the free unadorned Eclipse, and Sun’s free NetBeans, both of which are formidable competition. Even so, there are opportunities. JetBrains has proved that an independent, commercial Java IDE can still find a market if there is high quality combined with distinctive features.

For Delphi and JBuilder developers, at least the formation of CodeGear is a better outcome than a sale to the wrong company would have been. So welcome to CodeGear.

One thought on “Borland keeps its developer tools after all”

  1. I think the former (nobody would pay the asking price) is a *FAR* bigger factor than the ALM/IDE synergy. The lack of a buyer means that Borland ends up with egg on its face yet again, just like with the Inprise debacle.

    It was obvious from the start (to everyone except Borland) that in an era of free development tools, nobody is going to pay millions of dollars for a development tool that has suffered from under-investment for years. Where’s the .NET 2.0 support? Where’s the 64-bit strategy?

    Is the wholly owned subsidiary thing significant? I don’t believe so – it’s just a ploy to minimize the amount of omelette on the corporate visage. Remember Microsoft’s division (years ago) into operating systems and applications arms? Nope? Move along folks, there’s nothing to see here. It’s just business as usual…


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