Fierce competitors Microsoft Corp. and Borland International, Inc. have moved their battle from the networked desktop to the courtroom.
Borland last week filed suit against Microsoft, alleging that the Redmond, Wash., giant has been systematically recruiting Borland developers in an attempt to eliminate the company as a competitor. Microsoft and Borland are rivals in the budding Java and Internet tools markets.
While the Borland complaint, seeking unspecified damages, points to a recruiting campaign that started in August 1994, the roots of the dispute go back much farther.
It all started in late 1992. Microsoft was anxious to crack the PC database market and offered its Access database for an astounding (at least for then) promotional price of $99. Customers snapped up the product, despite its numerous bugs, with many figuring they could just upgrade to the fixed version later.
Borland, which owned the market with Paradox, was busy fine-tuning its Paradox for Windows, which did not ship until months later. By that time it was too late. A buggy Access had decimated most of the potential market for Paradox.
With Borland on the ropes, its employees became easy prey for Microsoft, which began to target the best and the brightest that Borland, with a reputation for software artistry and meeting deadlines, had to offer.
According to Borland officials and an unfair competition lawsuit filed last week that reads more like a press release at times, Microsoft never stopped sucking the best brains out of Borland, a plan aimed at destroying Borland.
Dead Borlanders Society
In fact, the influx of Borland employees into Microsoft led to the formation of the informal Dead Borlanders Society, a group that stayed together via E-mail and kept in touch with those still at Borland. But Borland officials claimed the group did more. They said it gave Microsoft information about Borland plans and names of Borland employees to raid. Borland attorneys asked Microsoft sometime ago to disband the informal group and this reporter was asked discreetly by a member to stop referring to the society in print.
Borland lays most of the blame at the hands of Brad Silverberg, who left Borland to join Microsoft in 1989 and was largely responsible for the launch of Windows 95. The suit contends that Silverberg targeted handpicked Borland employees. To prove its point, the suit contends that Silverberg picked up Paul Gross, the head developer of Borland's tools division, in a limousine and squired him off to an expensive restaurant in an attempt to recruit him. When that failed, they offered Gross a million-dollar signing bonus, real estate in Washington, stock options and an immediate three-month sabbatical so he could get married.
The suit alleges that Microsoft's Bill Gates himself sweetened the pot. Gross eventually accepted the offer, which included an additional half-million dollar bonus, last September.
A noticeably angry Borland CEO Del Yocam complained about the nerve of Microsoft. "How flagrant, driving limos up to the front of the company. That is what riles you," Yocam complained. Yocam said his No. 1 goal is to get Microsoft to stop recruiting.
Over the past 30 months, Borland alleges that Microsoft recruited 34 employees in all, placing many in positions nearly identical to those they held at Borland.
"We don't believe their claims have any merit whatsoever. Recruiting is a fact of life in the software industry," said Mark Murray, a Microsoft spokesperson. Murray pointed out that Microsoft has hired 6,793 people in the past three years, and that Borland's head count has declined from 1,900 to 900 over the past three years.
Who's to blame?
Although Microsoft has been an aggressive recruiter, Borland must share the blame. In 1994, a new management team, inspired by turnaround specialist and Chief Financial Officer Keith Maib, laid out a three-year grand plan that developers claimed was thrust upon them, without proper consult.The plan also called for smaller, more monitored development teams, which would crank out products in two-thirds the normal time.
The final straw for some was when managers announced that any employees not onboard with the plan should simply leave.
