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There is no use in crying big crocodile tears about Borlands decision to sell off its integrated development environment tools in favor of new business strategy focused on software lifecycle management and testing.
The cold, hard business facts are that if Borland wants to survive and keep growing it has to make this move, as unpalatable as it may appear.
Its impossible to keep the IDE business going when the technology has become so commoditized that competitors are practically giving them away for free like matchbooks with a pack of cigarettes.
Its plan to buy Segue Software makes sense even if it is accompanied by the more radical decision to get out of the development tools business.
It doesnt matter anymore that Borland was once a innovator in the field of IDE technology that made life easier for coders to learn the arcane conventions and practices of programming in the C, C++ and Java languages.
By now most programmers have a complete set of every IDE on the market. Or if they dont, they know they can find another one by just downloading it from the Web.
Its also no use blaming Eclipse or the open-source software industry for distributing for nearly nothing the development tools and IDEs that Borland used to charge several hundred dollars for.
That is just part of the natural process of commoditization that would have taken place, perhaps at a slower pace, whether or not Eclipse came into the market.
The only interesting question at this point is whether Borland can find a company that is willing to pay as much as $100 million for its IDE products that were built with so much care, cash and brainpower over the past 10 years. Delphi, C++ Builder, C# Building, JBuilder, and Kylix have been valuable franchises.
But their best revenue-generating years are behind them and it is questionable that they can be upgraded or extended in any way that will do more than let a new owner eke out a few more profitable years, like an oil company trying to coax the last few thousand barrels from a depleted well.
The industry has already begun the speculation game of what current competitor might even be willing to pay Borland for its IDE products.
BEA Systems quickly comes to mind as a likely candidate. Its in the same market and serves many of the same customers. A number of former Borland developers and executives have gone to work for BEA and vice versa.
Then again, perhaps one of its competitors in the ALM (application lifecycle management) field, such a Serena Software or even Mercury Interactive would be willing to pick it up.
Then again, OReilly Media, long a publisher of computer technology books and a sponsor of conferences on a variety of application development technologies, might consider adding the Borland IDEs to its product line.
It would be a good addition to its core constituency and would allow the company to acquire a valuable new revenue stream.
Next Page: Spinning out the tools.
Spinning Out the Tools
But more likely the best way to sustain the future of these products for the longest possible time is to simply spin out Borlands tools group and keep it in the hands of the people who have been most responsible to building and selling the products—some of whom have been working on them since their conception.
That may be the move that Borlands CEO Tod Nielsen might favor, although it might not be the option that would deliver the most immediate value for shareholders.
Whether such a venture makes sense depends on whether the prospective owners and managers are convinced there are good prospects for a sustainable revenue stream and even the potential for future growth.
Its most important that the Borland tools remain in the market in some fashion. They are too good and too valuable to just disappear all together. There has never been a good reason for any software technology to linger in the market if it isnt useful. A lot of technology has come and gone in the more than 20 years that Borland has been in the business.
But the fact that it has maintained a lucrative business model for two decades based on selling application development is in itself a remarkable achievement.
It survived, and even prospered, in the face of competition from Microsoft, which could always subsidize the development of its tools business with cash from its operating systems and applications businesses.
Borland can also take pride in knowing that it was able to do this because frequently Borland tools were superior to Microsofts tools for Microsofts own programming environments. Its the key reason why Borland has survived all these years.
Borlands decision to acquire Segue Software to focus on software testing and ALM is a bold one, considering how much competition there is in the market.
It will be competing with the likes of IBM, Serena Software, Microsofts Visual Studio Team System, Compuware and Mercury Interactive. But that is nothing new; its been competing with all of these companies for years anyway.
Its a logical progression from what the company has focused on since its founding. It also allows Borland to move into a space where there is still growth and high demand.
While development tools have become commoditized, there is still massive demand for systems that let developers test and fix the applications they have already built.
There is no indication that developers are going to become obsolete any time soon, even with the increasing use of modular, reusable code blocks to build applications.
There is also no indication that developers are going to produce code that is any less bug-ridden than it was 20 years ago.
John Pallatto is a veteran journalist in the field of enterprise software and Internet technology. He can be reached at john_pallatto@ziffdavis.com.
