But just before Christmas the company announced that the integrated development environment, IDE, business would not be sold, but spun off as an independent subsidiary called CodeGear. This despite the fact that in prior months Borland had said that the anticipated sale was proceeding as expected and that it hoped to be able to announce a buyer within a few months.
So was it simply the case that no buyer could be found?
Not at all, Nielsen said in an interview with Computer Business Review earlier this week. The difficulty was that although marketing and R&D were separate, sales was not so easy to separate. There were a number of large customers buying products from both [CodeGear and Borland’s core application lifecycle management, ALM, businesses] so for potential buyers the paper trail caused some confusion.
Nielsen also said certain prospective bidders would have sought to buy CodeGear with debt rather than cash. In that case I’m left carrying the debt, said Nielsen. So I said let me run it independently and clean it up myself, give it its own brand that they can add value to.
But isn’t there still the problem that Nielsen must divide at least some of his time between Borland’s ALM business and CodeGear? For the most part it is autonomous, and while I will add value here and there my focus is Borland’s ALM business, said Nielsen.
CodeGear does have its own CEO of course — Ben Smith, who joined Borland in 2005 after a stint in the venture community as co-founder and backer of a string of companies. CodeGear now occupies Borland’s original Scotts Valley offices, while Borland remains based in Cupertino.
Though CodeGear’s tools are highly regarded, the problem for the business in the past has been the intense competition from platform vendors who often give their tools away for free, competition from open source tools, and competition with Borland’s ALM business for resources.
CodeGear’s Smith has noted though that the population of developers continues to increase, and argues that it can now put all its energies into the IDE business without corporate distractions. He has pointed to the development of Peloton, a nine-month effort for developing the new Eclipse-based incarnation of JBuilder, as a glimpse of what’s possible when the mind is concentrated.
