Borland to acquire Segue Software

Borland Software Wednesday announced plans to buy Segue Software in a cash deal worth about $100 million. At the same time, Borland shared plans to shed its integrated development environment product lines.

Borland’s IDE product set includes Delphi, C++Builder and JBuilder and has been the company’s mainstay over the years. Now Borland wants to move beyond software development and into the broader application lifecycle management (ALM) arena.

ALM suites from vendors such as Compuware, Mercury Interactive and IBM combine tools designed to make software delivery a more predictable and manageable process. Typical components tackle areas such as project and portfolio management, requirements management, modeling, and software configuration and change management.

This year Borland plans to roll out a series of packaged products aimed at IT management and governance; requirements definition and management; change management; and lifecycle quality management. Borland says Segue’s Silk line of software quality and testing tools will play a central role in its upcoming Lifecycle Quality Management Solution.

Meanwhile, Borland has hired Bear, Stearns & Co. to help find a buyer for its IDE assets. Borland wants its IDE business to get the attention it deserves, said Tod Nielsen, who took the helm at Borland as president and CEO in November.

“Developers will always play an important role in the application lifecycle, but the ALM and IDE markets are very different – requiring distinct business models, different operational and marketing structures and a focused R&D team,” Nielsen said in a statement. “Both markets are important, but Borland can no longer give both the resources and attention they require.”

The divestiture is a gamble, according to Bola Rotibi, a senior analyst at research firm Ovum. Borland wants to distance itself from its tool-making roots, but those roots have helped fund the company while it tries to establish itself in the broader ALM market.

“While we believe some shake up of their product set was to be expected, this sudden move is thwart with potential problems. With the steady revenue that they get from Delphi and the JBuilder product streams, there is a danger that divesting them now is a step too far and too early,” Rotibi said in a statement.

Borland expects to complete the Segue purchase in the second quarter.