When Dale Fuller first walked into the palatial Scotts Valley headquarters of Borland in the spring of 1999, he had to answer one question – fast. Should he try and turnaround the struggling tools vendor or simply kill it and sell the carcass to the highest bidder?
After talking to customers and developers – something previous CEO Del Yocam had rarely done – Fuller decided to try and resuscitate the fading company, much to the surprise
of analysts who predicted that Borland would not make it into the new millennium.
They were wrong. Three years on and Borland is one of the few software vendors still able to post robust revenue growth every quarter. That growth has primarily been driven by the popularity of the JBuilder integrated development environment (IDE), which now has a 40% share of the booming Java IDE market.
JBuilder is popular because it compiles code fast, has an effective debugger and, above all, has a wide range of features that users say are straightforward to use. Borland is also quick to provide support for new Java standards as they emerge.
Borland has also augmented its core competency in Java with a number of minor acquisitions, such as the January 2002 $2 million purchase of Redline Software for its OptimizeIT Java testing tools suite.
But its entry into the Linux tools market has been mixed. Borland Kylix was the first rapid application development (RAD) tool for the open source operating system from a major tools vendor. But while the product has been well received, it has not generated substantial sales.
The reason, says vice president and general manager of software products Frank Slootman, is that Linux developers prefer to use lower level tools and languages. In addition, they also have a wide range of tools that are bundled free with their preferred Linux distribution.
But Slootman is expecting Kylix adoption to rise sharply as Linux becomes more and more popular. "We see financial institutions seriously adopting Linux, which is always a key leading indicator for the industry," says Slootman. When the rest of industry follows, RAD tools such as Kylix will be in strong demand, believes Slootman.
Perhaps more worrying is the faltering sales of its application servers and the Visibroker common object request broker architecture (Corba) server.
In the first quarter of 2001 alone, sales fell by a quarter as the application server market continued to consolidate around BEA Systems' WebLogic Server and IBM WebSphere, while interest in Corba technology continued to wane.
In addition, if Fuller is to ensure that Borland's turnaround endures, he will need to a robust strategy to deal with Microsoft's forthcoming .Net development environment.
Microsoft .Net is arguably the most far-reaching development environment ever put together by a single vendor and reflects the increasingly long shadow that Microsoft is casting over the companies that operate within its own 'eco-system'.
Nevertheless, Borland is already porting its tools to the .Net environment. These include a .Net enabled version of its popular Microsoft Windows-based Delphi RAD tool and a pure .Net development tool codenamed Galileo.
The success or failure of these products may ultimately dictate how enduring Borland's turnaround really is.