CodeGear's white knight

By SD Times News Team

June 1, 2008 —

It’s the best thing that could happen to CodeGear, Borland’s developer tools division. The future of the tools business had been in doubt since February 2006, when the company began talking about selling it off. It’s been an on-again, off-again transition: Sometimes the tool group was for sale, sometimes it wasn’t. Borland’s top management changed its mind so often, frankly, that it lost nearly all credibility.

When Borland spun the tools business into a wholly owned subsidiary, CodeGear, in December 2006, many industry observers speculated that Borland was merely preparing it for a sale after all, with advisers at investment firm Bear Stearns reportedly setting a price of US$150 million. Despite protestations to the contrary, that turned out to be the case, but not in the way Borland had hoped.

What was surprising was the identity of the buyer: Embarcadero Technologies, a well-regarded maker of database tools. Embarcadero had flown under most analysts’ radar screens, even after being picked up by Thoma Cressey Equity Partners in late 2006. Equally surprising was the low, low sale price: $23 million.

This sale is good for both CodeGear customers and the industry. Thoma Cressey wants to grow its new developer tools business. That means customers will see investment evolutionary changes in products such as JBuilder, Delphi and C++Builder, as well as its PHP and Ruby tools. Unlike other potential buyers, Embarcadero has no hidden agenda. Management has little reason to kill profitable product lines or morph the CodeGear offerings into platform-specific tools that turn away loyal customers.

Consider the alternatives. Borland might have held onto CodeGear, making minimal investment while trying to make the numbers look attractive to buyers. The lack of investment and planning would have destroyed the business; at some point, Borland would have just shut it down.

Another alternative would have been the sale of CodeGear to a platform maker, like Oracle, SAP or Sun. Such a company would have little reason to maintain the breadth of CodeGear offerings and would have naturally bent the CodeGear tools to fit a broader platform objective. Given that CodeGear’s primary appeal was that it was a pure-play tool maker without platform dependencies, this also would have destroyed its value.

Given all the challenges facing CodeGear, we believe that Embarcadero represents the perfect buyer and is in a strong position to maintain the products and serve CodeGear’s long-suffering customer base. It’s truly the best exit strategy that any of us could have hoped for.

Raiders of the Lost Code

When you dig through the SD Times 100, you’ll see a lot of names you recognize. As you’d expect, many of the industry leaders and top innovators are household names. It would be surprising if they weren’t. After all, consistent leadership and innovation is one way that a market leader remains on top.

It wasn’t easy to determine the SD Times 100. In early January, the editors of SD Times, as well as our regular contributors and columnists, look back through the past year’s issues to see which companies, organizations and individuals were setting the trends. Who had the ideas? Who brought out products? Who championed issues that advanced the art of software development? Who invented technology that made applications better? Who had impact beyond their own customer base or narrow constituency, to influence discussions throughout our industry?

Indeed, it’s difficult, particularly when the list of companies is far longer than 100, and the difficult task of whittling it down begins. Passions flare, debates take many hours longer than expected. This year, our debate was unusual, in that we had 2007 editorial staff members who were migrating over to our new Systems Management News publication, as well as newcomers to our process. Together, we discussed, we learned, we studied, we laughed, we argued. Finally, we voted. Now, we present the 2008 SD Times 100. Kudos to the winners.

Related Search Term(s): CodeGear, Embarcadero

Share this link: http://www.sdtimes.com/link/32238

Embarcadero releases first post-CodeGear product A month after finishing its purchase of CodeGear, Embarcadero has released DB Optimizer, an SQL profiling and tuning tool that works with products already in Embarcadero's line of database utilities and with CodeGear's IDEs.

InterBase 2009 comes with multicore support Other changes include new security features, such as over-the-wire encryption and the inclusion of the AES encryption scheme. The security changes will not be available for existing open-source Firebird database users.

Embarcadero taps into SQL Azure beta DBArtisan 8.7.2 works with the SQL Azure beta, and it supports development and migration, so far

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