My Delphi Q&A Sep 24, 2005 11:52
Recently, there has been some positive marketing collateral produced from Borland. DeXter is also due for release very soon, historically timed with BorCon. Despite these positive moves, the fate of Delphi continues to be a hot topic.
In an effort to provide the Delphi community with yet another voice on the topic, this Q&A serves to put recent events into perspective. Additionally it will provoke the usual non-tech suspects that disagree with me. :)
A: I appreciate that Borland has actually addressed the Delphi community directly, even if they could not do so without mentioning "Java". I also appreciate and recognize that it includes some positive aspects.
The problem is that it isn't enough. In this Q&A, Borland issued something stating that they are committed to Delphi and that they are doing exciting stuff to integrate BDS/Delphi into their ALM suite of products.
This does little to address the overall strategic issues facing Delphi. The problem here is that Borland has failed to say, in no uncertain terms, that Delphi/BDS is an integral component to their long-term ALM strategy. Nor did they take this opportunity to actually explain how and why it is an integral part of that strategy. This is what they needed to do.
A: There are two reasons why those questions are critical to understanding Delphi's future: 1) We must consider what a pure ALM strategy would look like without our personal attachment to Delphi; and 2) Borland must reconcile their previous statements regarding their ALM transformation with their commitment to Delphi.
The assumption that I'm operating under is that Borland really wants to be an ALM company. I think this is a reasonable assumption given this is exactly what they've said: "(ALM) is our growth focus and our primary area of investment." (conference call) Sure ALM includes the developer and the IDE, but that is only one aspect within the scope of ALM. So let's consider what a pure ALM strategy would look like.
In the market that purchases ALM, Delphi is even more of a niche player. Borland has admitted this themselves: "we recognize that the customer bases for ALM and Delphi are not identical." (Q&A) There may be a slight overlap there, but for the most part, there are only two IDE's that matter in any reasonable ALM strategy: Eclipse and VS.NET.
Regardless of what they do with Delphi/BDS those IDE's must be supported. Borland knows this and has moved in that direction. PrimeTime is the first casualty.
The argument for Delphi/BDS in the context of a pure ALM strategy goes as follows: Borland can provide better and deeper integration in the ALM stack using Delphi/BDS. Ok, although I cannot conceive of how, I am open to that possibility. That is why the "how" is such a critical question.
Finally, the reason why Borland needs to reconcile their previous statements with their statements regarding Delphi is simply one of credibility. I find people that talk out of both sides of their mouths to have little credibility. This is the message that I'm getting from Borland.
A: There are two reasons why they did not answer these questions: 1) They can't honestly answer it while keeping the Delphi community happy; and/or 2) There is internal conflict and disagreement about Borland's strategic direction.
If the first case is true, Borland doesn't honestly believe that Delphi/BDS is an integral part of their ALM strategy. They can't answer those questions directly because the answers would further damage their ability to milk their cash cow.
The second case is clearly a recipe for disaster. Borland is a relatively small company with many products and limited number of resources. Factions competing internally with different goals will exhaust too much effort to compete effectively externally. It's hard enough to compete against MS even when you've got the full support of your management, let alone when you don't.
The fact that guys like John Kaster and Tim Jarvis have to continually fight for a public statement addressing the Delphi community, and that the Delphi RoadMap finished back in June hasn't been published are two pieces of evidence to how counterproductive this can be.
A: It's important to make a distinction between "business and growth strategy" and "ALM strategy". As I've stated in non-tech, Delphi, as a nice little cash cow, is indeed an integral part of a "business and growth strategy", but Delphi's role in general is still ambiguous in the context of an "ALM strategy".
But if you think I'm splitting hairs here, remember that it was written by a lawyer and that if indeed Delphi were an integral part of their ALM strategy, answering the why and the how should be straightforward.
A: No. The main problem is that the terms "IDE" and "ALM" encompass a whole lot more than their TLA's conveys. The clearest distinction that I can make to express the difference between the two product lines is that one is based on technology whereas the other is based on process.
What I mean by this is the "IDE" business is one that is fundamentally rooted in technological prowess. The reason why developers buy an IDE is because it offers them better technology. Developing compilers and framework libraries is difficult and requires a deep understanding of technology.
In the case of the "ALM" business, what is fundamentally important here is the ability to leverage technology to support the software development process. The inherent value for the customer is derived from how well their process is understood and realized in these products. The technological underpinnings are less important here.
There is no doubt that both product lines require technical expertise; do not confuse what I'm saying here. The important thing to realize is that the value for their intended market is derived from different disciplines.
The synergy is certainly there, but I see no strategic reason why an ALM company should develop something like a native 64-bit compiler or the next generation of the VCL. These are elements that are strategically vital to an IDE company.
A: I think Borland's BoD rejected a pretty fair deal. If you look at Borland's current Enterprise Value of $257.65, $150M is a significant offer. I don't believe that Borland's rejection of the offer indicates that they are bringing Delphi forward within their ALM strategy.
I think the focus of many on Coates' personal motivations are misplaced. Coates' is not a Delphi visionary or a software guy, but neither is Mr. Arnold. It's important to put the terms of the business deal above the personalities involved.
This is a business proposition, he is an investor and just like any other investor he wants to maximize his return on that investment. From what he has been doing and what he has been saying, ISTM, that contrary to the existing Borland executive team, he believes there is more value in the Delphi/Deploy products than in the ALM suite.
All in all, I think Coates has the right idea. Borland's has too many products for its size. The ALM push has diluted the focus on the traditional IDE business. Borland's executive team has alienated its core customer base, developers, with their recent statements.
At the time of writing, Borland's current Cash per Share is $2.489; it's total share price is $5.92. The amount of confidence in Borland The Street is showing is minimal. They are ripe for acquisition. IMO, streamlining themselves for this acquisition is what makes sense.
I believe this is exactly what Mr. Arnold is going to do and one of the reasons why the BoD rejected Coates' offer is because they don't want to jeopardize their quarterly earnings numbers before they have a complete acquisition deal in hand.
A: There are several companies that could benefit from different parts of Borland. Companies like: HP, Oracle, EDS, CSC, Mercury Interactive, Novell, etc. The "Service oriented" companies would be interested in their ALM stuff. ISTM, they'd want a streamlined Borland to acquire without Delphi/Deploy products. The other companies would be interested in their technology.
Oracle, who had utilized VisiBroker technology in their DB, could spend a few hundred million dollars to acquire the "Deploy" products. Frankly, this would be an inexpensive insurance policy for Oracle and they could potentially get Interbase revenue or customers.
In the Oracle case, I'm not sure where this leaves Delphi exactly...probably no where. I'm not sure any company acquiring Borland's assets will continue developing Delphi. This is why I think Coates' idea of spinning off a Delphi Inc. is the Delphi community's best hope.
A: There are a bunch of reasons why the Delphi RoadMap has not been published. Borland might be pursuing acquisitions that might be of strategic importance to achieving the goals on the Delphi RoadMap. OTOH, if Borland desires to be acquired themselves, this is another "acquisition" reason to keep the RoadMap unpublished.
Another reason is long term liability, especially if they have plans on disposing of Delphi at some point in the future. Mr. Arnold has "contended that there are formidable barriers to exiting the Delphi business" (cbr online). I would agree and publishing a long term RoadMap would probably make that even more difficult.
Related to this, is my belief of internal tension as to the kind of company Borland wants to be: an ALM company or an IDE company. Perhaps a more accurate description of this is to ask: what kind of culture do they want to embrace? A process driven company or a technology driven company? An internal power struggle could be manifested within the contents of a Delphi RoadMap; hence it never sees the light of day.
The final reason I can think of is just plain incompetence. It is clear to me that Borland's new management have been a little too honest in their actual intent and has not managed the marketing message very well. Their recent press coverage and comments have caused damage to their credibility within the Delphi community.
A: Anything is possible, but the real question is to assess the likelihood of that. IMO, it's not very likely. I believe that the recent reporting of Borland has been very consistent with their last quarter conference call statements so I just don't buy some kind of media manipulation.
A guiding principle in software development is simplicity. I believe we should look for the simplist answer to this question.
What's the common element in all of these articles? Borland's executive team: Scott Arnold, Rick Jackson, Boz Elloy, etc. There have been many different journalists and media outlets who have spoken with them, but the coverage in terms of Delphi has been very consistent. In every ALM/SDO story, Delphi is not mentioned at all or when mentioned, it is far too easy to interpret what was said as negative.
This either reflects incompetence in delivering the actual positive Delphi marketing message to the press or a conspicuous reality of bad Delphi news.
It is far less likely that there is a coordinated media conspiracy out to poisen the loyalty of the Delphi community to Borland. The fact is that I've actually spoken to two of the authors of recent articles concerning Borland's future.
A: That's right, I contacted them myself. I had a good phone conversation with Tony Baer and another with Jennifer deJong. Tony Baer has his own OnStrategies.com media outlet and is the author of the infamous "nice little cash cow" article. Jennifer is the author of two recent SD Times articles covering Delphi "Borland: No Developer Left Behind" and Mr. Arnold.
I asked Tony directly about the "little cash cow" remark. He explained that it was not a direct quote from Mr. Arnold, but that he did not believe it was a mischaracterization of what Mr. Arnold did say. I also asked him about his impressions regarding how Mr. Arnold views Borland's Delphi/Deploy businesses. All in all, I'm quite convinced that he did not intentionally try to misguide anyone in regards to Delphi. He wrote exactly what he interpreted Mr. Arnold to say.
Jennifer's response was similar in this respect. She was very clear that the context of their conversation was about Mr. Arnold as a candidate for permanent CEO, Borland's strategic move towards ALM and their CoreSDP implementation based on Eclipse rather than PrimeTime.
Delphi was only brought up to confirm that it isn't part of their CoreSDP initiative, but that it would integrate into CoreSDP. Certainly things can change and Borland can make Delphi part of their CoreSDP initiative, but that is not what they indicated to her at that time.
After these conversations I did not come away with the feeling that these journalists intentionally lessened Delphi's prominence in their articles. In fact, if you look at Jennifer's first article, it is very positive coverage of Delphi.
My assessment of their separate interviews with Borland's executives is that they were pretty much on target. The consistency between their articles and the conference call statements (which Borland had complete editorial control over) lends to their overall credibility.
A: Not really. What bothers me is that the message from Borland is inconsistent and not coherent. The ALM strategy is not sufficiently detailed to explain Delphi's role within it. Is Delphi a part of their CoreSDP initiative? In fact, their ALM strategy is weak on the .NET side in general.
Borland has had, and continues to have, the Delphi community's ear to answer the tough questions. They have yet to deliver any answers. Let's put it this way, I would welcome a 20 minute phone conversation with Mr. Arnold. :)
A: I'll do my best, but as a Delphi developer there is only a certain amount of synergy. ;)
From my perspective ALM is the overall market or category of products that address the software development process in a holistic way.
SDO is Borland's vision for optimizing and leveraging the process that ALM tools address.
CoreSDP is Borland's first product that attempts to build role-based interfaces on their existing ALM products (CaliberRM, StarTeam, Together, JBuilder) and realize the SDO vision.
My explanations could be horribly inaccurate, but I think this is part of the problem. IMO, these kinds of marketing messages do not resonate well with the Delphi community. Also, no where in Borland's current marketing collateral covering this trinity is Delphi promoted; .NET is notably absent as well.
A: I don't have any hard evidence to back up anything. The main thing that I have tried to do is to detach from my own personal feelings about Delphi and put myself in Mr. Arnold's shoes.
I think it's not likely that any evidence will be released before significant events take place. Those that do know something cannot disclose that information to anyone, and even if they do, they could not, in good conscience, publish them.
But it might be insightful to ask yourself why certain people have been very quiet on non-tech recently.
A: There are 2 additional things that I think are worth exploring: 1) Borland has a contractual obligation to MS to aggressively support their new technology; 2) BTGroup's case study uses C++Builder; I believe that last year's BT deal was the largest ALM deal in Borland's history.
I'm not privy to the details of either agreement, although I think both are worth mentioning.
In the case of Borland's contractual obligation to MS, I'm not sure how they would meet that obligation without continued investment in Delphi. They might not have any real choice but to continue funding Delphi to at least support .NET 2.0. It would truly be ironic if it were an agreement with MS that is keeping Delphi alive.
It is interesting to note that BTGroup uses C++ Builder. IMO, this is the only reason why it makes any sense to revive C++ Builder. Again, this action could be driven by contractual obligation rather than vision.
A: Honestly, I don't know. If things don't change and Borland proceeds, I expect Delphi to die a slow and painful death.
If Coates can manage to get Delphi/Deploy separated from Borland, it might have a fighting chance. Unfortunately this might be a day late and a dollar short of what's required to resurrect Delphi to its former technical dominance.
In any case, companies like RemObjects building Chrome and open source movements like Free Pascal are promising for Pascal's future. So even if Delphi does die, there may be others to carry the torch.
A: I imagine there will be a bunch of different responses. First and foremost if they are still reading this, probably exhaustion. ;)
There will be some that think this is more of the same "Delphi is Doomed" rhetoric that we've all been hearing ever since Delphi was released. I think Steve Teixeira's point about the Delphi community's desensitization to this kind of stuff is very relevant to keep this blog entry in perspective.
There will also be some that will challenge and present different interpretations than the ones I've provided. There are those that adamantly disagree with me. That's fine; many of them have good arguments supporting their point of view. Inevitably, a large non-tech discussion will ensue.
Hopefully, there will be some that will honestly reconsider their previous optimistic perspective on Delphi's future and ask Borland tougher questions going forward.
If I indulge my delusion of grandeur, the hope is that a significant number of shareholders are exposed to the concerns of the Delphi community and this might play a role in shaping their opinions.
Finally, I know for a fact there are a few readers that appreciate my efforts in lending a voice to the very real problems Delphi faces.
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