Borland: League Underdog

By Baselinemag  |  Posted 2005-08-04 Email Print this article Print
 
 
 
 
 
 
 

Borland Software has fans, but some customers say it hasn't outlined a road map well and has rushed products out the door.

If Borland were a baseball team, it would have a group of die-hard, paint-your-face fans. But some of those customers would have to admit that the company is not fielding a World Series contender anymore.

Borland's sales have slid lately—and a head has rolled. In July, CEO Dale Fuller, a former Apple Computer executive who had run the company since 1999, resigned after the company announced that revenue for the second quarter of 2005 would be as much as 11% lower than expected.

Some customers think one big problem is that Borland hasn't explained its strategy well. "They don't have a public road map," says Brion L. Webster, programmer analyst with the city of Fresno, Calif. "With Borland, you know they're going somewhere, but you don't know where."

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For example, Webster says, Borland hasn't provided news on the status of the next version of Kylix, a development tool for Linux applications, in several months. (A Borland spokeswoman says that while the company has historically kept product plans "close to the vest for competitive reasons," it will be more forthcoming in the future.)

Others say Borland has rushed out products before they were fully baked. The version of Delphi 2005 the company released in the fall of 2004 crashed frequently, says Mark McHenney, director of enterprise information systems at First Trust Portfolios, an investment management firm: "They should take the high road instead of putting their user base through the extra work of finding bugs and installing patches."

On the other hand, Borland's JBuilder Java development system has been "very robust," says Kelvin Burton, chief technology officer of health-care charity Mercy Ships. "We've never had to go to their technical support and say, 'This doesn't work.'"

Borland has tried to expand beyond its roots as primarily a programming-tools vendor with a suite of "software-delivery optimization" products for handling the entire life cycle of an application, from requirements gathering to code deployment.

But Borland is facing increasingly tough pitching from its two huge rivals, IBM and Microsoft. "I really get the feeling that Borland is getting squeezed by the direction Microsoft is going," says Ben Hull, senior programmer at Comtrak Logistics, a trucking firm that has used Delphi since 1998. Here's what should worry Borland: Hull says that if Comtrak had to start developing software from scratch today, it would probably pick Microsoft's .NET tools instead.

Application Development Management

Borland Software
20450 Stevens Creek Blvd.
Cupertino, Ca 95014
(831) 431-1000
www.Borland.Com

TICKER: BORL (NASDAQ)

EMPLOYEES: 1,361

Scott Arnold
Interim CEO
Joined in November 2003 as chief operating officer after 15 years with consulting firm McKinsey & Co.

Brian "Boz" Elloy
Senior VP, Software
Oversees R&D for all products. Joined Borland in 2002 from diCarta, a contract management software company.

PRODUCTS
JBuilder lets teams develop Java applications; Delphi is used for developing Windows applications. StarTeam provides change and configuration management for development teams. CaliberRM manages business requirements. Together provides application-modeling features.
Reference Checks

First Trust Portfolios
Mark McHenney
Dir., Enterprise I.S.
mmchenney@ftportfolios.com
Project: Investment management firm with 30 developers uses Delphi to maintain dozens of applications, including those for trading and pricing securities.

Mercy Ships
Kelvin Burton
CTO
burtonk@mercyships.org
Project: Non-profit group that provides medical care in poor countries is using JBuilder and Together to build a new version of its donor-tracking database.

NASA
Ron Mak
Senior Computer Scientist
rmak@mail.arc.nasa.gov
Project: Space agency is using JBuilder to develop a Web portal that aggregates diagnostic data from instruments aboard the International Space Station.

Arizona Dept. of Transportation
Doanh Bui
Mgr., Information Delivery Solutions
dbui@azdot.gov
Project: State transportation agency contracted consulting firm TeraQuest Metrics (acquired this year by Borland) to help improve software-development processes.
City of Fresno, Calif.
Brion L. Webster
Programmer Analyst
brion.webster@ci.fresno.ca.us
Project: California city government's public works group uses Delphi to maintain several database-access applications, including one for water-meter tracking.

Comtrak Logistics
Ben Hull
Senior Programmer
bhull@comtrakinc.com
Project: Trucking firm has used Delphi to write its operations applications, including those for dispatching and invoicing.

Executives listed here are all users of Borland's products. Their willingness to talk has been confirmed by Baseline.

Borland operating results*

2005YTD 2004 2003
Revenue $71.32M $309.55M $295.24M
Gross margin 79.4% 85.4% 80.5%
Operating income/loss -$1.46M $18.67M -$39.93M
Net income/loss $3.49M M $11.37M -$40.54
Net margin 4.9% 3.7% -13.7%
Earnings per share $0.04 $0.14 -$0.51
R&D expenditure $14.63M $68.09M

* Fiscal year ends Dec. 31; YTD reflects first three months

Source: Company reports

OTHER FINANCIALS**

Total assets - $513.34M

Stockholders' - equity $371.99M

Cash and equivalents - $78.28M

Short-term investments - $152.45M

Long-term debt - None

Shares outstanding - 81.59M

Market value, 7/25 - $497.26M

**As of March 31, 2005, except as noted



 
 
 
 
 
 
 
 
 
 

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