News

What's Next for Borland's CodeGear?

• By John K. Waters
• November 27, 2006

Earlier this month Borland Software Corp. announced plans to split off its developer tools group as a wholly owned subsidiary called CodeGear. The move comes nearly eight months after the Cupertino, Calif.-based company said it would sell the division and focus exclusively on its ALM products.

"We're still following through on separating the two operations," Borland's Chief Marketing Officer Rick Jackson told ADT, "given that the two have very different business models and target audiences. But instead of an independent third party financing the separate company, Borland will continue to do that."

The tools group attracted five serious bidders, according to Jackson (confidentiality agreements prevent him from disclosing their names). "But at the end of the day," he said, "it became very difficult to present the developer tools group as a separate entity. These were two completely intertwined companies--facilities, employees, administration--so we had a hard time showing definitive numbers that a banker would use to value the business. Consequently, the offers we received really didn't reflect the true value of this business."

Borland announced in February that it would be selling its developer tools business. The announcement came in the wake of a market-changing wave precipitated by the advent of the Eclipse tooling framework, which effectively commoditized the basic IDE functionality. Revenue from the company's dev tools business has been in decline since Eclipse moved in, Jackson admitted. However, Borland's ALM business has been growing, and currently accounts for 60 percent of the company's revenue.

CodeGear will be responsible for Borland's line of integrated development environments (IDEs), including JBuilder, Developer Studio, and the new Turbo line, as well as the Interbase embedded database. The newly named operation will be headquartered in Borland's original Scotts Valley, Calif., corporate campus with a staff of 300. Borland executive Ben Smith will lead the new operation. Smith has been working with Borland and the dev-tools group for the past 12 months. Several of the company's star employees will be staying on, including David Intersimone, Borland's VP of developer relations and chief evangelist.

"This is a company with strong customer loyalty," said Gartner analyst Thomas Murphy. "The fact that David Intersimone is still around is a very good thing. He's the touchstone for a lot of customers."

The new subsidiary won't be skipping a beat, said Michael Swindell, who now serves as CodeGear's VP of product strategy. In August, the tools group released its new "Turbo" product line, which comprises four rebranded, single-language versions of Borland Developer Studio 2006, the company's development environment for Microsoft Windows and .NET applications. CodeGear is poised to release the first Eclipse-based version of JBuilder, code-named "Peloton."

"When you think of Borland in the old days," said Murphy, "here was this company with some really smart people building efficient, effective development environments, and interesting things around them. It's kind of exciting to think that they will be out there doing it again with some of the same people. However, the market is very different now. Things like PHP, Perl, Ruby, and all the AJAX stuff—that's where the action is today."

Swindell said the CodeGear team is already working on "some things" for developers using AJAX, Python, Ruby and PHP.

"Overall, this is great news for the people who have known Borland, loved their tools, and stayed with them over the years," Murphy added. "The question is, can CodeGear build a new following? What about all the people who have never really used them before? That'll be the true test."

CodeGear