Borland to wield tools against Microsoft

After nearly being knocked out for good by Microsoft, software maker Borland is back on its feet and eager for a rematch.

Borland, in the midst of a turnaround after years of financial struggles and strategic missteps, is preparing to go head-to-head against Microsoft next year with new programming tools that allow developers to build software for Microsoft's Windows operating system and its overarching .Net software strategy.

Borland's suite of tools, code-named Galileo, will be positioned to compete against Microsoft's popular Visual Studio.Net tool suite, said Ted Shelton, Borland's chief strategy officer.

The Galileo bundle, set to debut early next year, will include a new version of Delphi, Borland's key development tool, and other languages that have yet to be announced, Shelton said.

As the largest independent toolmaker, Borland stands a good chance of establishing a successful business with Galileo, analysts said. Borland intends to be a sort of Switzerland of development tools, supporting the two major programming models, the Java and Microsoft.Net development camps.

Borland is hoping to position itself as an alternative for developers who want to target .Net, but who do not want to be locked into Microsoft's programming tools and technologies.

"They want to get to the developers who won't want to use Visual Studio to begin with," Gartner analyst Mark Driver said. "At best, it's 5 percent of the market, but 5 percent of 5 or 6 million developers is sizable. That's a good chunk of change, and they're not going to throw that away."

Driver said some developers fear that if they use Visual Studio.Net, they will eventually be locked into using Microsoft's SQL Server database, Exchange Server and other software from the company.

Galileo will work with Microsoft's .Net Framework, which simplifies and automates many software development tasks and helps software run across multiple servers and computers. It will also support Microsoft's Common Language Runtime, which allows software developers to use many types of programming languages to write applications that run on Windows and Windows-based server software.

The tool bundle will support several languages, Shelton said. "The (languages) we have been asked for are Visual Basic and C#," Shelton said. A Java language tool is not expected to be part of Galileo.

Visual Studio.Net--Borland's target--is central to Microsoft's .Net strategy to move computing to the Web. The .Net plan includes new versions of the Windows operating system and new server software. Visual Studio.Net supports more than 20 languages, including Visual Basic.Net, Visual C++, Visual C#, and Visual J#, and allows programmers to build software using Web services. Internal computer systems and systems residing in multiple companies are linked by Web services.

While Galileo may steal some tools business from Microsoft, ultimately the tool bundle could well benefit Microsoft's .Net strategy because it will help popularize that system and increase the pool of programmers who use and understand .Net.

"Anything Borland does will never be a threat (to Microsoft). The vast majority of .Net developers will use Microsoft's Visual Studio," Driver said. "Borland will play off the fears--and it's a real concern--that the developers will have continued lock-in to Microsoft products via .Net. If you are a shop with heavy investments in Oracle and Microsoft, you might be more attracted to Borland. Borland's interest is to be more well-rounded and to support more products (from a variety of software makers)."

Back to the future
Borland's decision to go head-to-head with Microsoft on the tools front may seem a fatal mistake, if history is any indicator. A software powerhouse in the '80s and early '90s, Borland saw its fortunes collapse, largely as a result of competition with Microsoft, which undercut Borland's pricing and hired away 34 of its key executives.

Fighting for its survival and desperate for cash, the company in 1999 even received a $125 million cash infusion from Microsoft. In return, Borland gave Microsoft the blueprints for much of its key technology at the time, and settled long-standing patent disputes.

Now, after nearly a decade of struggles, which included a name change and a failed attempt to focus on selling e-business software, the company has rebounded under the helm of Chief Executive Dale Fuller. The company is returning to its roots as a software tool maker and has changed its name back to Borland from Inprise.

The company is now the market share leader in Java tools, and is also building tools for the growing wireless, Linux and Web services markets.

In its latest financial report, Borland said its second-quarter revenue grew to $59.7 million from $56 million as software license revenue climbed 5 percent to $50.1 million.

Shelton said the company believes his company can compete with Visual Studio.Net--and grab its share of customers.

With its own .Net tool, Borland executives say they will target customers who don't want to get trapped in an all-Microsoft environment and want to use rival Java technology to build their computing systems.

Shelton said Galileo is important because Borland has "a big motivation to make non-Microsoft technology work well with the Microsoft environment. For customers who want to use a mixed stack, we will provide a better set of tools for them."

Borland has already cut deals with BEA Systems and IBM to broaden its reach in the market.

Shelton said Borland plans to offer features not currently available in Visual Studio.Net, such as the ability to "model" software--that is, build graphical representations of it--so programmers don't have to write all the code by hand.

And Borland clearly is banking on the population of software developers and information technology managers looking for an alternative to Microsoft, which has angered some of its customers with a new licensing plan. Analysts said that is one reason for the growing popularity of the Linux operating system, StarOffice productivity software and other alternatives to Microsoft products.

Borland has already made inroads in the Microsoft community with more than 1 million developers using Delphi, a tool that competes with Microsoft's Visual Basic language. Delphi allows programmers to develop software quickly with a type of product commonly referred to as a RAD (rapid application development) tool.

The move to build a tool for .Net is also one way for Borland to retain its loyal base of Delphi customers. "The Delphi RAD business unit is 25 percent of our revenue, and we want to keep it that way," Shelton said.

"We think we can offer a development environment that gives people everything they need with .Net, but also succeeds in mixed environments" of Linux, Unix and application servers. "We think we can grow that customer population."