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.


  1. Allen,

    I know you can't comment on my comment but I am posting it for comments by others...<g>

    I started thinking that Apple would be an interesting buyer. They recently switched to Intel chips and IMNHO their development tools are no where in the same league as Borland's development tools. Plus Apple devs used to have experience in an Object Pascal.

    Still lots to think about but it would be interesting.

    -- Robert

  2. -Trolltech (Qt)

    -Novell (Suse)


    -Apple? (no Win32 expertise!)

  3. A good thing about Apple is that has Corbin working ! <g>

  4. >>> -Apple? (no Win32 expertise!)

    Isn't that what's suppose to come along with the purchase?????

    Plus, Kylix probably can be ported/update now to run on Mac much more easily now that it's running on Intel.

    I too think Apple is a good idea. I think the best hope for Delphi (the language, IDE etc) is to make it run on as many platforms as possible.

  5. Kalrl, that's what I thought Robert was trying to say. Apple could be interested <i>because</i> they would benefit from the purchase.

    "Venture buyout" looks pretty.

  6. Truely, venture capitalists would be the end of Delphi. We're talking about the type of people who would evaluate employee's worth by checking for gold fillings.

    The day I hear an announcement that Delphi is snatched up by a venture capitialist is the day I short list moving all my ongoing projects to C#.

    Yes, you could assume I have a poor opinion of venture capitalists...

  7. C Johnson,

    The fact of the matter is that a large amount of this industry is built using the funds from the venture capitalists. I also find it interesting that it seems that people think that the only ones with money to invest are the large monolithic corporations.

    Apple? Too niche, sorry. Sun? they have their own brand of problems and breaking into Windows development tools isn't likely for them. Microsoft? Interesting, sure... but I doubt it. Trolltech? Novell? C'mon.. they're too niche as well.

    Nope, my first choice *is* a "venture buyout" of some sort. If a venture capitalist were to invest, they'd be foolish to jeopordize its success by messing with the formula. Of course I don't care of some of those monoliths also toss a few bucks into the ring, but the idea here is autonomy. Mixing our agenda with some sorrounding corporate container is what got us here in the first place.


  8. Allen - If you think that venture capitalists don't have an agenda, you are sadly wrong. They are, at best, a neccisary evil in the industry, and if you ask around, you'll find that most people regret the control they've lost over their own companies as a result.

    VCs are all about getting in and figuring out the best way to wring a company dry of ever drop of profit. R&D departments can starve on what they leave behind. Their single driving goal is to return money to the investors.

    While it is true that they would be insane to kill a business totally, it is also true that they kill any real creativity and innovation due to its inherent risk. If you can't show exactly how something can increase profits, they won't hear of it.

    Not get caught in a "corporate container"? Hell, VCs BUILD those corporate containers with one single priority -> return maximum value to the shareholders. There is no room to be truely innovative for innovation's sake. You can't be "cool", you MUST be profitable.

    It is pretty questionable if Delphi itself would have ever seen the light of day under those circumstances. We would more likely all be using new revs of turbo pascal.

    True, most of the companies bandied about are absurd suggestions on their face, but at least MS's development tools section has the core mandidate of creating powerful tools for the Win32 platform. Cost recovery is secondary to building the platform. Indeed, development tools at Microsoft are ABOUT building the platform. The more people developing for windows, the more people who use windows (app availability is everything).

    For years, developers got more out of MS than the shareholders (who, until recently, didn't even get dividends) - Free lunch, free seminars, free training, cut rate tools.

    Frankly, that kind of home would let Delphi soar in a way that VCs never will.

    Will the VCs kill Delphi straight out? No, it will be the death of a thousand cuts.

    Developers who want true innovation will ultimately be driven to VS while Delphi languishes and the VCs eventually decide to cut it loose in a firesale to get that last drop of blood.

    Face it, VC and software do NOT have a good history together.

  9. Alan and C Johnson,

    I see truth in both viewpoints. I have experience with VC's and yes, they are bean counters to the core. From my experience, they are only interested in short term gains. Of course, it really depends on the VC group and what their history has been like. Before passing judgment in either direction, one would need to research the specific firm to see how they operate.

  10. My experience with VC's has not been great. I've worked in two VC funded startups and VC's do have an agenda: make money on their investment.

    I, with a company I'm a principal in, would never go that route because VC's do push their agenda on a company. They want a return faster than I believe is possible with building a software product.

    A typical gameplan is to infuse tons of money, spend it rapidly by hiring a bunch of people and putting stickers on bananas. Then expect a full product in a 1-2 years time with revenue that looks like a hockey stick.

    It's different in this case because Delphi is a shipped product that makes money. But the danger with VC's in this case is that they'll want to flip the company in a few years and cash out. And once they buy into the company, that's ultimately their choice. Make no mistake, they only care about money.

    OTOH, an established company with cash, sees it as a strategic asset: one to kill, pervert or cultivate. I'm hoping for cultivation, but what happens is dependent on the execution of the deal.

    My 2c: If you haven't dealt with VC's first hand I suggest that you listen to the war stories of a few people that have.

  11. Recently there came up a new term for "Venture buyout" firms in Germany:

    - Grasshoppers -

    They come, eat everything, and leave again.

  12. Robert Kozak wrote:

    [ Apple ] their development tools are no where in the same league as Borland's development tools. Plus Apple devs used to have experience in an Object Pascal.

    That's right. They are lightyears ahead with cocoa/webobjects.

  13. <snip>... dedicated to finding "broken and orphaned" businesses neglected by their parents... </snip>

    well, I think that's a fit...

    This rang true: "Wyse's management has been almost completely turned over and Neoware CEO Michael Kantrowitz claims that Wyse is going to be "challenged" since the guys who've taken over don't know the business and haven't retained the folks who do."

    - Roddy

  14. I'm with some of the others - a venture buyout would be a disaster. If the IDE group is to thrive, it needs to be bought buy someone with a 5, 10, and 20-year interest. It would be rare to see that in a VC. Good luck!

  15. Allen,

    See the following link for some thoughts on this very topic.

  16. The joelonsoftware link is pretty interesting, but it basically underscores the primary worry about VCs. They know a lot more about ruining companies and making them succeed.

    If you insist on being the first one to get paid out of the profits (indeed, the ONLY one to get paid out of the profits), research budgets are going to be seriously injured. On a business that depends on a research and development budget, that could be bad.

    An additional though, most of the time, when you hear VCs, you hear low numbers, sub 100 million dollars. Which is a problem, since the spin off will basically be broke with no sales force, no offices and a LOT of staff. Seriously large numbers are going to be required. To reduce VC risk, serious amounts of sales are going to be immediately redirected outside the company back to the investors. Now, this is not to slight the investors, but it isn't really clear how large a risk they are taking on a business that generates enough income to buy companies with 100 million dollars of pocket change lying around.

    It is sad that borland's board considers a business capable of funding such spending sprees as useless and only worth selling off. We can only hope that as they do it, they don't sell us all down the river too (but based on their past performace, I wouldn't bet on it)

  17. I'm currently working for a company that within the last year was bought out by VC's. In my and my peers opinions, it's the gonna sink us within another year if that.

    Where a Delphi and just finished a rewrite of our core product in may and now the C-level managemnt feel the need to rewrite the coire again in C++. We have gone from a very nimble company that could shift on a dime and where releasing new versions ever 6 months. Now we are expecting to move to yearly updates while our competition is still every 6-8 months!

    There screwing us bad and we all know it.

  18. Throughout the late 80's and throughout the nineties I was a large reseller of Borland products. I was amazed at the loyalty of the user group. Products like Turbo C and Turbo Pascal were always huge sellers for me. Can anyone tell me what has happened to Borland? Is the programming talent from those years gone? I am a suffering investor who wants to believe in a company which made me a lot of money as a reseller, however, it appears to be a company which is struggling to find its way. Is it a executive management issue or programming talent issue?

  19. Another reason the most likely buyer is MS instead of some VC group is the time table that board is apparently working to.

    There is, apparently, a desire to complete the deal quickly (completed by the end of the 2nd quarter this year).

    If there is anything VCs do not do quickly, it is actually come up with money. They will listen, they will talk, they will even make promises. But when the time comes to pony up the cash, they take their own sweet time to make sure every damn duck is in a row and re-run those projects a few hundred extra times just to make sure.

    Which isn't to say that they don't come up with the money if they want to, they just prefer you to be needy and dependant, and inheriently distrust anything that involves moving masses of cash in a large hurry.

    The VC business is about risk balanced with due diligence. Hard to do in a hurry.

    Could you imagine in they had rushed the Corel merger? <shudder> Does anyone remember Corel? They are still in business, honest, I swear.


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