Open Source Popularity Forces Borland to Retrench

Borland's decision to acquire Segue Software and to bail out of the development tools business was inevitable because of the popularity of the Eclipse open source tools.

Borland Software Corp.s acquisition of Segue Software and divestment of its integrated development environment tools line is being viewed as the inevitable evolution of the tools space, with the force of the open-source movement and not owning the platform being key factors.

Borland, of Cupertino, Calif., announced its intent to acquire Segue Software, Lexington, Mass., and to divest of its IDE tools.

The company said it would enrich its ALM (application lifecycle management) tools.

Yet a key reason Borland left the tools space was the commoditization of that segment, led by the force of Eclipse, the open-source IDE spawned by IBM and spun into an independent entity in 2004.

"The IDE business has been a dying breed for about 10 years," said Anne Thomas Manes, an analyst with the Burton Group Inc., in Boston. "Its really hard to compete with free—especially when the free stuff is really good."

Theresa Lanowitz, an analyst with Gartner Inc., said, "I do think Borland was really caught off-guard with the success of Eclipse and what it did to their historically successful IDE market."

Zack Urlocker, vice president of marketing at MySQL and a former Borland developer, said, "I think it was a very bold move by [Tod Nielsen, Borlands CEO]. The tools business, like many infrastructure businesses, has been commoditized over time by open source.

"Its clear that Eclipse had a huge impact on the tools business and has taken the number one position. So it makes sense for Borland to get out of that battle and focus on areas where it can add value. Its a good move also to expand their portfolio with the Segue offerings, which are quite good, but perhaps not that well known."

Manes said Borland has a history of misguided attempts to reinvent itself, but this move looks promising.

/zimages/2/28571.gifRead more here about Borlands purchase of Segue.

"Starting with its acquisition of Visigenic and its misguided renaming adventure (Inprise) in the late 90s, Borland has been trying to reinvent itself into an enterprise software company. Borland now addresses management of the entire application life-cycle," Manes said.

"I think the Segue and Legadero acquisitions complement their growth pattern of the last decade and put them in a different category."

The new Borland will compete with companies such as Serena Software, Compuware and Mercury Interactive.

"Todays Borland news is indicative that Serenas Change Governance strategy is the right one and validates what we see as critical in addressing changing customer needs," said Mark Woodward, president and CEO of Serena Software, in a statement.

Added Woodward: "As this market evolves, tighter integration of life-cycle management is imperative to meet customer requirements. In addition, this adds muscle behind Serenas Eclipse/ALF [Application Lifecycle Framework] initiative and solidifies the direction we have charted.

"It is great to see that the category we are defining for our customers to succeed in effectively managing change is causing others to take notice and follow this charge."

Meanwhile, Borland is seeking a suitor for its tools business. The company has tapped investment bank Bear Sterns to help with that effort.

David Intersimone, vice president of developer relations at Borland, said he will be going with the new company.

"Im leaving with a tear in my eye and a smile on my face," he said. "The smile is bigger," he added.

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