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 due largely to 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 $125m 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 quarterly earnings report, Borland said its second-quarter revenue grew to $59.7m from $56m as software licence revenue climbed 5 percent to $50.1m. 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," or build graphical representations of software, so programmers don't have to write all the code by hand. And clearly, Borland is banking on the population of software developers and information technology managers looking for an alternative to the software giant's products, which have angered some Microsoft customers with a 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. Borland has already made inroads in the Microsoft community with more than one 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."
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