Software development tool maker Borland International (BORL) sees its future as a supplier of distributed object technology. Today, the company went shopping for the technology it needs to make that happen.
Borland announced that it has signed an agreement to acquire Visigenic Software (VSGN), a developer of ORB (object request broker) software, the middleware needed to glue component applications and database software together into working business systems.
Under the terms of the deal, Visigenic shareholders will receive .81988 shares of Borland common stock for each outstanding share of Visigenic stock. Approximately 12.5 million shares of Borland stock, currently worth roughly $150 million, will be issued at the close of the transaction, slated for the first quarter of next year, according to Del Yocam, Borland's chairman and CEO.
"We are responding to an awful lot of CIOs and IT executives who say this makes sense. We would have never done this deal otherwise," said Yocam. "For Borland, this is a significant growth opportunity that will put [the company] at the forefront of the distributed technology market."
At a Comdex press conference held today to announce the deal, the companies also said they plan to build application server software that will combine Visigenic's VisiBroker ORB with Borland's JBuilder Java development tool. Application server software is an emerging category of middeware used to build business applications split into three tiers?-client presentation code, middle-tier business logic, and back-end database processing.
Many companies already have debuted application server software, including Oracle, Kiva Software, and others. Borland said its application server will stand out from the crowd through its ease of use. By twinning Visigenic's ORB with Borland's tools, the new product will make using hugely complex ORB software much simpler, according to executives.
"Distributed object computing is a huge paradigm shift," said Roger Sippl, founder, chairman, and CEO of Visigenic. "This is the way all new applications will be built. An application server needs to be a 4GL (fourth generation language)-style tool that is tightly integrated with [an ORB] server. The first company to do that will be a big winner," he said.
Sippl, who also founded Informix Software in 1980, will become Borland?s chief technology officer following the completion of the transaction. Borland?s current chief technology officer, Rick LeFaivre, will head research and development for the combined companies, according to Borland.
Analysts see the deal as positive for both companies. Visigenic gains a broader distribution channel and the tools to make its ORB superior to competitive offerings. "We need more feet on the street and a broader product line," said Sippl. "Just giving people middleware...and leaving the systems integration to the MIS shop...is not a good idea."
Sippl said the acquisition will not affect the company's existing licensing deals with Oracle, Netscape Communications and other software vendors. Oracle uses VisiBroker in its forthcoming Oracle 8.1 database server, in its Web Application Server, and as part of network computing software offered by its Network Computer subsidiary, said Mark Jarvis, vice president of system products marketing at Oracle.
The deal also should give Visigenic a leg up on other ORB vendors, such as Iona, said Nick Gall, an analyst with the Meta Group. "This makes Visigenic a stronger player. Iona has to find a tools partner. Ease of development is a crucial factor."
Another benefit of the deal is that Borland gains expertise in a hot technology, and, in Sippl, an industry veteran who can effectively articulate the company's strategy. But the company now has three distinct middleware product lines that could confuse customers, said Gall.
"This deal does quite a bit for Borland," he said. "But they have three distinct middleware platforms, in Entera, Midas, and now Visigenic."
Yocam did not rule out the possibility of layoffs as a result of the acquisition. "There are functions that overlap whenever you combine two companies. We will take whatever restructuring actions are required," he said.