Borland is shedding its legacy application-development tools and focusing on software designed to bring discipline to application delivery. An acquisition and a divestiture play key roles in this plan.
Borland is shedding its legacy application-development tools and focusing on software designed to bring discipline to its application delivery. An acquisition and a divestiture play key roles in this plan.
Borland is buying Segue Software, which makes software quality and testing tools, in a deal announced last week that is worth $100 million. In addition, Borland plans to shed its integrated development environment (IDE) product lines. The company’s IDE products include Delphi, C++Builder and JBuilder, and has been the company’s mainstay over the years.
The time has come to focus on other areas, according to company executives. Borland is divesting its IDE business so it can build out a suite of application life-cycle management products. Similar suites from vendors such as Compuware, IBM and Mercury Interactive combine tools designed to make software delivery more predictable and manageable.
Typical components of these suites tackle such areas as project management and governance, requirements definition, software testing and change management. The intent is to add structure to software projects and avoid common pitfalls – namely delays, overexpenditures and misaligned requirements.
Borland wants to keep its IDE business alive, but does not have the resources to pursue the application life-cycle management market and maintain its developer productivity tools, says Tod Nielsen, who became Borland’s president and CEO last November.
“Both markets are important, but Borland is not a multibillion-dollar company,” he says. “We can no longer give the resources and attention that these two distinct efforts require.”
Market demand also is driving Borland’s shift. There’s a lot of momentum around Eclipse, an open source IDE that originated inside IBM and today is managed by a consortium that includes Borland. Trying to sell a commercial Java IDE is getting tougher, as Eclipse continues to win over developers.
Nonetheless, the divestiture is a gamble, according to Bola Rotibi, a senior analyst at 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 application life-cycle management market.
“While we believe some shake-up of their product set was to be expected, this sudden move is fraught 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.
Revenue is a key concern for Borland, which is struggling to regain profitability. Last week the company reported its third consecutive quarterly loss, a $9.6 million shortfall for its fourth quarter.
