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CodeGear: still for sale

New strategic direction: Borland competes with itself

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Keeping up with Borland’s corporate plans is a challenge. In early 2006, it said it would sell its IDE tools business, including the Delphi and JBuilder products. Nine months later it formed CodeGear, but as a wholly-owned subsidiary, saying that nobody came up with a good enough offer. “It was obvious that the positive cash flow from the IDE business was much more attractive for us,” Borland’s Mike Hulme told Reg Dev here.

Now CodeGear’s recently appointed CEO Jim Douglas says his company is still for sale. “Borland went through the process of attempting to sell it. They had numerous offers. But it was so difficult, financially and operationally, to separate the two that it couldn’t get to the type of transaction that made sense.

So they decided to complete the operational task of separation, and then move forward and sell. The plan of record is still to do that.” Douglas says that Borland needs the capital to grow by acquisition in the ALM (Application Lifecycle Management) market. “It’s very difficult to compete being a $300m player.” Might some of the original buyers still be interested? “Yes. And I’m not making any commitment to timing. Our focus is optimization of the organisation.”

I asked Douglas how CodeGear can compete when many excellent tools are both free and open source, or heavily subsidised by platform vendors. “Our company had its head in the sands about open source, just hoping it was a fad and would go away,” he says. “A great example was JBuilder. We had the dominant product in the market, and we let open source usurp that market.”

The strategy now is to embrace open source, adding value through proprietary extensions and integration. Douglas says this began internally. “We scrapped our complete development environment and built a brand new one using only open source components. We used things like Bugzilla for bug tracking, Subversion for source control, XPlanner for project planning. We found that although individually these are very good solutions, there was zero integration. We ended up developing an infrastructure to integrate those capabilities around our IDE. We ship that whole stack with our product.” The same approach is being used for the forthcoming Ruby on Rails Eclipse-based IDE. “The team-oriented stack will also be moving into the second revision of our Rails product. Our biggest focus across our product line is team design.”

So is CodeGear, detached from an ALM company in order to sell tools, now itself becoming an ALM company and competing with its parent? “It’s a detente,” says Douglas. “Both companies are part of Borland, but both groups have to optimise for their market,” he explains. JBuilder ships with an open source ALM stack, but CodeGear has a parallel JBuilder line that integrates Borland’s ALM suite.

The Microsoft factor

The old Borland tried to market a suite of .NET tools, but failed to keep pace with Visual Studio, and the latest Delphi 2007 does not support .NET at all. Has CodeGear given up on .NET? “We’ve got to be more complementary rather than to duplicate what Microsoft do. We’ve got a game plan to do some things that are more complementary and additive.” Might that mean a Delphi plug-in for Visual Studio? “That’s one of many approaches. I’m not going to comment specifically, but thematically you are in the right direction,” says Douglas.

He is more upbeat about native code development. “Microsoft has effectively abandoned that side of the market, and that continues to be an extremely important part of software development. Microsoft’s OS group love us for that because their tools group doesn’t have an equivalent.”

So, somebody still loves CodeGear - that’s OK then. ®

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