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Borland gambles without developers

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The smart choice: opportunity from uncertainty

Analysis Anyone hoping Borland Software's decision to exit the integrated development environment (IDE) game will meet the same fate as its plan (subsequently dumped) to re-invent itself as Inprise in 1998, is likely to be sorely disappointed.

Under a new chief executive, ex-Microsoft luminary Tod Neilson, Borland has finally accepted the inevitable and decided it cannot make money from IDEs.

Open source, particularly Eclipse, has made it impossible for ISVs to sell and make money from IDEs. What's in question is the boldness of Borland's strategy.

Borland would have you believe this move is a continuation of its vision towards Application Lifecycle Management (ALM). The decision to exit the IDE market, combined with the $100m acquisition of Segue Software, means Borland has decided to focus its entire business growth on the performance and testing portion of ALM, instead of providing the tools to help people build applications in the first place.

Borland has been moving towards what it describes as "software delivery optimization (SDO)". Translated, that means helping non-IT staff tune applications to meet their businesses' needs. Under that strategy, Borland has made acquisitions in processes, services, and in IT project management, to help refine the way applications are built and give business managers tools that provide greater insight into how applications and whole ALM teams are performing in terms of budget, cost and deadlines.

Borland's decision to divest the IDE, though, adds a strong element of risk to SDO and removes a strategic differentiator. By selling off its IDEs, Borland is surrendering the tools' development roadmap and leaving the degree to which the IDEs will finally integrate with Borland's performance and testing portfolio open to question.

That's good if you want to be seen as "tools agnostic", but bad if you had any hopes of leveraging an existing customer base to drive business growth in future. The latter is a strategy Borland could have used: maximizing its presence in Java with JBuilder and its influential position behind Microsoft on Windows with Delphi to grow.

The opposite example is IBM/Rational. The company may have created Eclipse and decided to push into performance and management tools, but the company recognized the strategic importance of holding onto the actual IDE's development. Holding on means continued influence over IDE's roadmap - thereby shaping the features and taking the rough edges off Eclipse. It also ensures a seat at the industry negotiating table and continued leverage against the big platform bullies, like Microsoft.

Instead, Borland says it "fully expects" to work closely with the IDE buyer to continue maintaining and advancing integration with the company's remaining ALM tools.

Secondly, by pitching into application performance and testing, Borland is going up against companies like Mercury Interactive and, again, IBM. By holding back its IDEs, though, Borland could have played on a unique competitive advantage: it offered the ability to optimize code developed using its tools.

Borland could have worked from a unique position of power; by helping entire ALM teams turn out completely optimized stacks of Java and Windows code.

Borland's IDE spinout and acquisition of Segue is a stake in the ground. The company has decided to go all out on the performance and optimization of code generated by tools, not just those from Borland, while appealing to customers who are not inside Borland's traditional user base. That means individuals with more of a business or systems administration background rather than coders.

Borland was right to elevate its business beyond developing and charging for IDEs. However, the company has left a large and influential group of users hanging.

The future is now open for IBM/Rational, Oracle on Eclipse/Java, and for Microsoft on Windows to pick up those developers who'd loyaly stuck with Borland, while Borland seeks to make itself relevant to the market all over again. ®

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