Thursday, February 23, 2006

"DevCo" - 16 days after spin off announcement.

In case you've been on vacation on some tropical island or hiking in the arctic tundra without mobile phone or internet service, by now you have seen the latest information and news from Borland.  Some more information is here as well.

Rather than simply rehashing all the same old information, I'd like to provide some level of back-channel information.  Of course there's nothing in here that would be considered sensitive information.  All I hope to do is to let our customers and community know that the spin-out plans are proceeding at a very fast pace.  In other words, I'll try and provide a “fly on the wall“ view of what is happening, but I also will control what that “fly“ actually sees and hears.

For the sake of being clear, I will refer to the new developer tools entity as “DevCo,” whether or not we're spun-out as a private concern or part of a strategic investment from an existing company.  I have the priviledge to be involved with a lot of the high-level discussions that cover things like DevCo's corporate structure which include things like the R&D, QA, and Pubs organizations.  I've also been included in discussions about product management, sales, marketing, support and even HR, corporate counsel (the lawyers) and the finance folks.  It is exciting to be involved in what is best described as the genesis of a new company or entity... all from within the existing corporate shell.  These are all initial discussions and will begin to include more of the development organizations and others.  Since we're intending for DevCo to be a developer focused entity, we are now making plans with that in mind.

For example, we need to make sure we have an organization that is well suited to continue to deliver all the products that will be part of this new entity.  There is a lot of infrastructure needed to make sure we're successful.  The good thing is that we aren't quite getting down to the level of who's going to clean the restrooms :-).  We also have to make sure we have all the appropriate information and documents created and made available to potential suitors so they can begin their “due-diligence” process as well.  This is why Bear-Stearns was hired to help us out.  They have the expertise and tools in place to make sure everyone is on the same page and that both parties in a transaction of this caliber are pleased with the results.  For instance, one really interesting thing they've setup is a secure web-site that will be the virtual “data room” where all the documents and information are placed so that any prospective buyer can gain access to in order to do their own “due-diligence.”  This site very secure and all the documents are viewed through a special viewer application that makes sure the viewers cannot print or copy the documents.  Apparently in the past the way this was done was there was actually a physical room set aside containing rows and rows of filing cabinets.  A team of lawyers and/or finance wonks would show up at your door and you'd grant them access to this room.  Then you'd have a security guard standing by to ensure that no documents were allowed to leave the room.  Fascinating.

Earlier this week, DevCo's acting exec leadership team had the opportunity to share a dinner with Tod Nielsen and others.  While a lot of the discussion surrounded DevCo and its future plans, we also had time to just get acquainted and share old “war stories” from Borland and Microsoft.  It was great to compare perspectives.  We even discussed the latest in mobile phones as Michael Swindell and I showed Tod our latest cool new phones.  Both used Windows Mobile 5, of course :-)

I will tell you that these meetings are of the marathon variety.   They're tedious.  They're sometimes boring.  However, they are very, very nessesary.  I intend to remain highly involved since my team and I now have significant “skin in the game.”  I want to make sure that we remain on target with respect to the originally stated goals.  The good thing is that my colleagues and I are very much goal aligned and creating a developer focused company is our top goal.  While, Mr. Ballmer can only temporarily put on his “Developers! Developers! Developers!” hat... we plan on having it firmly and permamently sewn on!

From now until we close this deal, the DevCo exec team will conduct regular “stand up” meetings so that we can make sure we have the information we need and that we're providing the information needed for potential buyers.  We're also working on putting together the actual presentation that will be made physically in front a team of folks from the prospective buyers.  This is where we get to express our ideas and passion for the business along with future growth strategies and plans.

Some folks have really wondered why Borland management decided to go public with these plans before having a buyer nailed down.  Personally, the reasons why at this point are irrelevant because I now see an opportunity for me to share bits and pieces of this process with the customers and the community.  It can also serve as a springboard for DevCo toward a more open and honest dialog with the customers and community.  Once the deal closes, we can remove the Cluetraining wheels.

More press...

This interview of David Intersimone and Rob Cheng in ADT magazine further clarifies many of the questions and concerns of our customers and partners.  There are sure to be more interviews and articles in the coming weeks.

Friday, February 17, 2006

Monday, February 13, 2006

Information keeps rolling...

This article in “Computing” magazine out of the U.K. is interesting.  It quotes Chris Barbin, the Borland VP of Worldwide Services.  Here's the interesting quote:

Barbin said that Borland had already been approached by three firms regarding the IDE sale. He added that Borland expects a few more within the next six weeks, mainly from venture buyout groups and the more strategic independent software vendors. “It’s likely to be a combination of the two that would be interested [in a purchase],” he said.

This seems to indicate that the interest is not from some huge monolith like Microsoft, Google, IBM, Oracle, or Sun.  But rather from “venture buyout” groups.  That's an interesting term... and a little “googling” revealed some little bits of information surrounding that term.

Friday, February 10, 2006

Exposing the "Cash Cow" Myth.

“Cash Cow.”  Wikipedia defines it like this: “In business, a cash cow is a product or a business unit that generates unusually high profit margins: so high that it is responsible for a large amount of a company's operating profit. This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes. The expression is a metaphor for a dairy cow, which after being acquired can be milked on an ongoing basis with little expense.”

When this unfortunate term was applied to Delphi by a former interim CEO, I've seen it being parroted extensively in newsgroup postings and blog content.  While having a cash cow business is usually a good thing for a company that is looking to diversify and move into other markets, it is also a very dangerous position to be in for that cash cow business.  According to the above definition, “This profit far exceeds the amount necessary to maintain the cash cow business, and the excess is used by the business for other purposes.”  Let us examine whether or not this applies to Delphi;  It has been no secret that Delphi 2005 was... ahem... a little less than what would be considered a quality release.  If you examine the events that lead up to that release, it was clear that the management at that time actually did come to the false conclusion that Borland's developer tools were a “cash cow” business.

If the business were truly a cash cow, then minimal investment and commitment would have been all that is needed to maintain that stead cash flow.  Instead the opposite happened.  The uproar among the community was felt throughout all facets of Borland.  This lead to a renewed commitment to making sure the team was given the appropriate attention and resources to ensure that Delphi 2006 would not be a repeat performance.  By all accounts, that change in how management funded the project had a profound affect on D2006.  Which tends to explode the cash-cow myth because as soon as focus was shifted away the effects were immediate.  Yet, the “cash cow” myth seemed to remain.

Enter Tod Nielsen.  One thing that truly excited me about Tod was that he really understood what kind of investment was needed to build a complete, end-to-end development tool.  If you think about it, Delphi and C++Builder start from essentially zero.  We control the compiler, tools, frameworks, IDE, debuggers, etc...  There isn't an established compiler and framework around which tooling is built.  It is built from the ground up.  Kind of like heading out to the iron ore mine with the intent to build a car.  Other tools merely need to visit the machine shop.  I discussed this difference in detail in this posting.

Now this is pure speculation, but from my vantage point this is what I think Tod encountered as he began to assess the current state of affairs here at Borland.  On one had he came in and saw a strong legacy of popular development tools with a strong, loyal customer base.  On the other he saw a strong suite of tools that support management of the application lifecycle.  He also saw a huge scism between the way these two sets of tools are marketed, delivered, and sold.  With the dev tools, there is a strong, what is called “channel presence.”  This is a more direct to the developer model.  That is clearly where the “IDE” products thrive.  Then there is all the other things which require a long-lead, C-Level, VP of AppDev, consultancy, schmoozing kind of sale.  This is where tools such as CaliberRM, StarTeam, Tempo, (and now Segue) live.

Rather than being blinded by the new bright shiny object that is ALM/SDO, he began to take a more holistic and pragmatic approach.  He knows that in order for both to survive they needed a high degree of focus, investment, and commitment.  The problem is that Borland is in this constant tug-of-war.  It is easy to be on one side or the other and simply say, “Well just invest in both!  How hard can that be?”  The problem is, and I've said this many times before, that Borland is simply too big to act small, and too small to act big.  Tod, knowing that Borland just cannot do both things at the same time and with the same focus, he and the executive team took this radical approach.

So that is where we are now;  On the cusp of a new era.  There's sure to be a bumpy road ahead, but it's going to exciting and I truly believe, will turn out to be the best thing that could have happened to Borland and whatever the new dev tools company ends up being.  As an aside, I remember many years ago sitting in Gary Whizin's office (the then long time Turbo Pascal/Delphi R&D manager), with Chuck Jazdzewki and Anders Hejlsberg, potificating and fantasizing about the prospect of spinning off the Delphi product into a private company.  So this is not really a new idea, merely an idea whose time has finally come.

I encourage you to reserve judgment until the dust settles and all the i's are dotted and t's are crossed.  In fact, things are moving full steam ahead with our current roadmap, a new Delphi 2006 trial edition is in the works as is some new product updates and some other things I'm sure the community will be excited about.  So for the Delphi/C++Builder team, it is business as usual.

Wednesday, February 8, 2006

What are other Borlanders... er... uh -ers :-) saying

Here's just a few quick links to what some of my colleagues are saying about today's announcement:

Adam Markowitz - Sojourn of Delphi
David Lock - Delphi grows up, moves out
David Intersimone - Borland plans separate company...
John Kaster - Exciting times for Borland's developer tools
Anders Ohlsson - It's a fabulous day

What about the "Borland" Name? My opinion.

A very common question and comment that keeps recurring is “Why doesn't the new IDE company keep the Borland name and the surviving company rename around the ALM strategy?”  In principle, I agree that this would be an ideal thing to happen.  I, too, have an extreme attachment to “Borland.”  However, if we have to lose the Borland name in order to gain autonomy, focus, invesment and all the things we know is needed to keep Delphi on a forward track, I'll count it as a huge net gain.  Yes, let us mourn the loss of the Borland name attached to Delphi, but at the same time let us celebrate the opportunities and opened doors that are now ahead of us!

In the end, the Delphi and JBuilder names carry significant brand recognition all on their own.  They seemed to survive the “Inprise” debacle quite well.  I'm confident that whatever the “NewCo” name ends up being, it will be complementary and recognizable.  This assumes, of course, that the spin out winds up being an independent company (my personal preference).

BTW, you'll notice that I'll never use the term “divestiture” or “divest.”  Those are ugly and cold.  I prefer “spin-out” or “spin-off.”  They sound, at least to me, to be much more positive.

BDN Radio live chat.

Today, February 8th, 2006 at 3pm PST, there will be a live BDN Radio chat about the announcements made this morning.  Be sure to “tune in.”

Tuesday, February 7, 2006

Fly! Be free!

I don't think is has been too much of a secret that Borland, the developer tools company, and Borland, the enterprise software tool company have been on divergent paths for many years.  Some of you may recall all the brouhaha surrounding the tendered offer from Robert Coates and crew to purchase the Delphi and deployment product group(DPG) assets in order to form a separate private entity.  Much speculation and opinions quickly formed throughout the Delphi community.  Hopefully by now you've heard about the latest news from Borland outlining a very similar internally driven strategy to do just that.  If not, please take a moment to digest the information.  Go ahead, I'll wait.

Interesting, huh? Oh.. wait... that Segue thing?  That's not the part you and I are interested in.  I know what you're thinking...  I thought the same things when I first heard about this.  How will this be pulled off?  Will Delphi be able to survive?  What about this technical hurdle?  What about that hurdle?  Well, let me give you my take on all this, and hopefully some of your fears can be allayed.

First of all, I'm so totally STOKED about this!  Why?  Finally, Delphi (and the other related products) can now receive the focus and attention the've long deserved.  I can be involved with a team that can make descisions based on what is right for the product and the customers without worrying about how those descisiona align with the overarching corporate strategy.  I mean, our products will be the corporate strategy!  I applaude Tod, Rick, Matt and the other executives for their vision and care in seeing that there is still extreme value and life left in these products.  I'm excited about the possibilities to reinvest the stable revenue streams back into the products in order to better serve our customers.  Also, the potential to invest in new complimentary directions rather than orthogonal ones.  I'm sure by now your mind is reeling and spinning as fast as mine when faced all the possibilities that suddenly begin to open up!  Of course we can't do everything, but we will now have far greater control over deciding on what is the best course to take.

Tod Nielsen wasn't kidding when he came became the CEO with his tagline of “Go Big, or Go Home!”  I mean, this is capital “B“ Big, folks!  Is this a slam dunk for Delphi and the other products?  No.  Is this going to be a tough thing to pull off?  Of course!  But I certainly am excited to give it a good solid chance!  I hope that all of you, the loyal, rabid, Delphi customers, third parties, and fans will stick with us and see this through as well.  I have no doubt that you'll be pleased with how it will turn out.  Think about this folks, Delphi is no longer going to be the red-headed step child looking for it's place.

So I think I'll have to adopt Tod's tagline as well.  Go Big! or Go Home!  And Fly! Be free!  So strap yourself in tightly, cause it's going to be a fun and exciting ride!

UPDATE: Just to clarify, the spin-off of the IDE/Tools business is *not* being driven by Mr. Coates.  It is purely being driven by the executive team under the full blessing of the current Borland Board of Directors.  While the Coates proposal was interesting, it is far better that this kind of thing be driven by an internally committed and involved team. 

Thursday, February 2, 2006

Ok.. so there really are other pragmatists out there..

This posting by Jeff Atwood is a good description of the sometimes painful process of (to continue the airplane theme) bringing a product to a successful landing... on the proper runway... with no injuries...