Are you a Delphi developer? Are you a Delphi lover? Are you interested in Delphi’s future? If so, settle into your chair, fasten your seat belt, and read this article! Borland is having tough times financially, and that means Delphi will likely not get the funding and support it needs. As a result, I think it is time to split Delphi off as a separate company. That is the best way to protect the product itself, and the best way to protect the interests of the many developers who have invested so much time and money in Delphi technology.
A Tough Financial Picture
I listened to the Borland Earnings conference call yesterday, August 2nd, 2005. The results were not good. For the third quarter in a row, Borland lost money. Revenues were down thirteen percent, and the company faces a loss of $17.5 million, which includes a restructuring charge of $15.7 million. The next quarter is expected to reflect similar bad news, with earnings in the $60 to $66 million range, where a year ago the company made $77 million in the same quarter.
For Delphi developers, the bad news was not just financial. After listening to the earnings call, I now have a clear picture of where Borland is planning for the future, and what consequences those plans will have for Delphi and Delphi developers.
The Borland management team clearly believes that a company the size of Borland ought to transform itself into in ALM and SDO company. I also believe that is the right thing to do. The Borland management wants to be successful and bring everything they can to their shareholders. That is the number one priority of that team and they are doing everything in their power to make it happen. But they are in a very tough spot. They are getting a lot of heat from shareholders and product owners worldwide who are telling them that they ought to do better and who are questioning their performance and doubting their ability to succeed in the long term.
We all like to point fingers and we all think we can do better, but the truth of the matter is Borland is in a very tight spot in our software industry. They are a $300 to $400 million company. That is a very dangerous space to be. These days I see two spots doing well: the small $50 million company, and large companies with revenues over $3 Billion. Each has a niche to fill. But the very small number of companies that fit in the $300 to $400 million are left hanging somewhere in the middle. They are neither small enough to turn quickly like a small company, nor powerful enough to bull their way through tough times and the inevitable corporate challenges.
Not Enough Money for Delphi
For the Delphi lovers out there like me, what does all this mean?
The important question is whether or not Delphi can help Borland to achieve the radical growth it so desperately needs. The answer to this question is uncertain. With Java, C#, VB and C++ on the market, the once elegant and superior development tool now has serious competition that can not be ignored. Let’s say Delphi has 350,000 active users, if Borland decides to invest heavily in Delphi and the next release in 2006 is wonderful, how many Java, C++, C# or VB programmers could be expected to jump ship and come over to the superior Delphi development tool? Realists have to accept that fact that it is unlikely that Delphi will experience a large market growth in the next few years.
Does that mean Delphi is dead? Far far from it! Even without large growth in market share, Delphi still has a strong and secure future. There is so much code written in Delphi worldwide and such a strong community behind Delphi that it’s longevity is assurred. Plus the Delphi Development team is very strong and capable of competing at any level. It can cause serious damage to multi-billion dollar companies out there.
Lots of people have accused the Management team at Borland of abandoning Delphi, of not spending enough money on it, of taking its profit and rerouting it to ALM and SDO investments. Is this true? The answer, unfortunately, is yes, it is true.
Borland is a public company, and they are required by their shareholders to show growth in all aspects of their business. Borland is not at all like a small private company that can be happy with a nice comfortable revenue level. Borland cannot afford to lock down a relatively small profit margin and remain content with it forever. In short, Borland is not the right company to shepherd Delphi into the future.
Building the Delphi Company
So what needs to be done to make everyone happy?
I believe that spinning off Delphi as a separate private company will serve 3 major purposes:
- It will clear Borland from the fear of having to cover Delphi expenses. At the same time, it will allow Borland to remain a major shareholder in the Delphi company, and possibly get some serious revenue back while still allowing all expenses to be paid for by the private Delphi company.
- It will allow the Borland product portfolio to be more focused on the vision of ALM and SDO in order to penetrate the tough enterprise market more efficiently.
- The Delphi Company will be considered a small, VERY successful company in the range of ~$50 million a year revenue. It will have a small efficient team and a whopping ~350,000 to 500,000 active users that love the product and want to see it succeed.
If the Delphi company and product do well, they can funnel their profits back into the R&D team, the QA Team, support, consulting, training, sales, marketing, etc. There will be a real chance to grow the business, make serious money and achieve incredible results. Yes, I do sincerely believe that all this is possible.
The other aspect that has been brushed aside is the Delphi consulting and training business. Borland was never really keen on that because, again, the numbers did not make much sense in terms of the Borland bottom line. But with the Delphi company, I really do believe that consulting and training will play a significant roll in shaping up the company and bringing the community together. Much can be gained by involving people like Ray Konopka, Bob Swart, Brian Long, Jim Cooper, Charlie Calvert, Michael Li, Carey Jensen, Chad Hower, Nick Hodges, myself and others in a worldwide effort to form a strong family of Delphi lovers. A worldwide team can be formed to help companies train developers and complete projects. The Delphi Company would make money based on the filtering of these opportunity to their partners and community leaders.
Delphi is very strong in Europe, the Far East and Australia. The team has been blessed with people like Jason Vokes and Malcolm Groves that have been working extremely hard and are showing incredible results. These revenues can help the team back in the US grow and compete faster at a realistic levels instead of continuously be overworked and short staffed.
This is a tough time for both Delphi and Borland. It is at difficult times like these that the future is often decided. By forming the Delphi Company, Borland has a chance to do the best thing for shareholders, for Delphi developers, and for the Delphi team itself. Many wonderful people have made difficult sacrifices over the years to support Delphi. At last there is a plan that can offer promise for the future of Delphi, and that can reward those who have shown faith in both Borland, and Delphi technology. Do the right thing: support the formation of the Delphi Company!
I know the Delphi community is not shy! Many readers will understand and agree with what I am suggesting and others will not. I respect both opinions. I would love to hear from you, please log in an leave a comment or even leave it anonymously.
God Bless Delphi!