Cashing Out the Cash Cow Feb 08, 2006 15:42
Today Borland announced that it is divesting its IDE business and going forward with ALM by purchasing Segue for about $100 million. I have previously discussed Borland's future in regards to its IDE business and how it relates to their ALM strategy; I also advocated the divestiture of the IDE business then and am looking forward to it now.
First, there is always fear of the unknown. I have some concern as well. It's not because I don't believe that divestiture isn't the right thing for both the ALM group and the IDE group, it is. My concern comes from the choices that have to be made in the process of the divestiture: finding the right buyer, retaining employees and keeping wall street happy. Although they've stated that they will seek a buyer who is best for their employees and customers its naive to believe that shareholders aren't the most influential voice in the room: they do own the company.
I've heard before that the antidote to fear is faith; and I believe that in this case that's all we really have until specific decisions are made and the events of the divestiture take place. I do have faith that the Borland team focused on development tools will make wise choices about how they proceed; I trust them. I just hope that they will have enough clout to influence the ultimate decision makers.
The other concern comes from the point of continued investment going forward. I have recently stated in the newsgroups that I believe that Borland should remain focused on making/keeping Delphi the best Windows development tool on the planet. My perspective changes a bit depending on the buyer. If the buyer is committed to a different platform, say MacOSX or Mono or something else, then Delphi will certainly branch out into those areas. They will actually *fund* those areas of development, where I believed that if Borland was to keep Delphi they wouldn't.
This also brings up the question of who the potential buyers could be. The way I see it there are many and more: Oracle, Google, Microsoft, IBM, Sun, Apple or Novell. There is also the possibility of a smaller company or group of private investors willing to run with a Delphi Inc. The companies I'd like to see buy it are: Google, Apple or Novell.
Google is somewhat obvious, but let me articulate some of the reasons. Google is still in their honeymoon stage and the press coverage and attention would be enormous. If Google comes out and endorses Delphi, it would mean instant credibility; that would be huge for the Delphi community. Developers and managers would approach Delphi with an open mind. Another reason is that I think they'd probably open source or make free almost all of it; they'd free the compiler for sure. I also believe they'd invest money in making it crossplatform.
Considering all those points, I'm not so sure that it's a really good fit for Google. I think it's a better fit for the Delphi community, but we can dare to dream. I'm not sure what Google gains from buying the IDE business or why they would really want the kind of dev tools Borland has. Google would be better off buying ActiveState tools since they mesh more with their philosophy of open source stuff. The problem there is that Sophos owns ActiveState, I assume Google has little/no interest in Sophos, but I digress.
What about Apple? Again the press value is quite high for an Apple acquisition. The Mac would get a really good set of dev tools by the time CLX and the compiler came over. The Delphi's team expertise would also dovetail nicely with Apple's Intel transition. Almost everyone likes Apple, even if they don't use their products. Good dev tools that support Windows and MacOSX could stimulate a lot of new applications for their platform.
But again, like Google, I don't think it's a really good fit for Apple. They already have a set of developer tools and Borland has exactly 0 products that support Apple. I suspect it would take quite a bit of work to transition them across to support MacOSX. Apple is primarily a hardware and entertainment/media vendor.
Finally there's Novell. I'm sure many people are scratching their heads at this suggestion, but endulge me for a little bit. Novell has acquired Suse and is funding Mono in a big way; essentially, they are making a go with Linux. Delphi gives them dev tools for Mono and Linux. Interbase might also be attractive to them since they don't have a database at all. I suspect they'd want to open source all of it. Also, a little known fact about Novell is that they have boatloads of cash: 1.65 Billion.
The downsides to this is that I suspect that the cultures might be at odds with the current Borland one. Novell has really bet on Linux/Open Source in a big way, Delphi is a closed source Windows development tool the common element between them is .NET. I'm not sure if .NET is enough to bind these two companies together. My personal concern here is that Novell won't push the Windows side of Delphi enough if they acquire them.
Oracle, Sun, IBM and MS all have reasons to buy Borland's IDE business. But I'm personally not keen on any of those possible owners. The other wildcard to consider is a smaller company or private investors. This might be the best approach but it might also relegate Delphi to the role of something like RealBasic, Eiffel Inc, etc. Who knows what's going to happen, but it certainly is an interesting time for Borland, the Delphi team and the Delphi community.
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