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CodeGear Enters Crowded Waters

Borland's CodeGear hopes to thrive as a new dev tools company.

• By Michael Desmond
• 02/15/2007

When Borland Software Corp. announced in November of last year that it would spin off its developer tools group into a wholly-owned subsidiary called CodeGear, it ended a tense period of uncertainty for the longtime development tools provider. The company in February 2006 had revealed an aggressive strategy to grow its automated lifecycle management (ALM) business -- a plan that included divesting its developer tools arm. Borland executives at the time set a Q3 deadline for announcing a sale.

The package up for sale included the company's well-regarded Delphi programming language and IDE, as well as products like JBuilder, C# Builder and Interbase. But as the Q3 deadline came and went, concern about the future of the once-legendary tools group grew. On Dec. 5, Borland announced that it was not selling the tools group. Instead, the business was organized as a wholly-owned subsidiary bearing the name CodeGear.

The question, of course, is what took it so long?

Establishing Identity
"We made that announcement and got a lot of interest from the market. We boiled that down to five serious bids from outside vendors," says CodeGear CEO Ben Smith, who adds that none of those buyers met Borland's requirements. "There was a lot of value, actually, in first getting interest from the market. I think we got a much broader sense of interest than if we had gone behind the scenes and put out feelers through a banker, that sort of thing."

In fact, says Smith, the process has helped CodeGear establish its identity before hitting the open road: "Getting rid of your past is a long process and it's fairly difficult to shift people's minds from one thing to another."

"We're not driven by pulling people forward and delivering better and better platforms. We just want people to write great software." Ben Smith, CEO, CodeGear

That past includes the well-regarded Delphi programming language and IDE. Of course Borland, and now CodeGear, is best known for founding the first integrated development environment -- and being the place where industry legend Anders Heijlsberg, now lead architect of the C# programming language at Microsoft, made his name. Still, fond memories and rich history count for only so much in this market, and the executives at CodeGear know it.

"We're going to deliver on the vision of becoming a dominant development tools company," says Smith. "You'll see us bring some dynamic language capabilities directly to the Delphi base in the first quarter."

Borland Senior Director of Product Marketing Mike Hulme says the spun-off unit will have a better chance to achieve its goals now that it's no longer competing with Borland's ALM business for attention and funding.

"They can bring out new features at an accelerated rate and potentially more features than in the past because they aren't fighting for dollars [inside Borland]," says Hulme. "They'll be on the balance sheet. They'll be broken out as a separate organization -- a separate [profit and loss statement] -- so there will be a lot of visibility into how that organization is doing."

Dangerous Waters?
Peter O'Kelly, analyst with the technology research firm Burton Group, says CodeGear is navigating into dangerous waters.

"We talk to large organizations and they're probably doing a mix of Java development and Microsoft .NET development. Obviously, Visual Studio dominates the latter, and Eclipse dominates the Java development arena. So if you're not already starting with Borland tools, there are fewer and fewer reasons to do so now," O'Kelly says.

"Category by category, it's getting tougher to compete in things that are even adjacent [to these IDEs]," O'Kelly points out. "The reality is fewer is better. These IDEs have become platforms unto themselves."

Still, Smith believes a refocused CodeGear can do great things in the development tools market.

"We're not trying to sell a platform. We're not driven by pulling people forward and delivering better and better platforms. We just want people to write great software."