Evans Data recently published a report predicting the global developer population to grow 46% by 2009, creating a market of over 17 million developers globally. The emergence of web services and new development capabilities from Ruby to Python to Ajax provide an opportunity for even more substantial innovation. To tap this rich opportunity, Borland is positioning its Developer Tools Group into a wholly-owned subsidiary called CodeGear. This new unit will be responsible for advancing the four primary product lines formerly associated with Borland’s Integrated Development Environment (IDE) business. These include Developer Studio (Delphi, C++Builder and C#Builder), JBuilder (including the upcoming Eclipse-based “Peloton” offering), Turbo and Interbase.
Tod Nielsen, Borland president and chief executive officer, said the reasoning behind the spinning out of a separate group for the developer tools was to obtain the necessary focus and dedicated resources to serve two important, but distinct markets. "We will continue to partner and share a mutual view of customer success. However, going forward Borland will be completely focused on leading the Application Lifecycle Management (ALM) market, while CodeGear will be focused on the software developer", said Nielsen.
CodeGear will be led by Ben Smith, who was appointed today as its chief executive officer. Smith, who has been working with Borland and the Developer Tools Group for the past 12 months, will expand his role working closely with CodeGear’s existing leadership team to deliver on the business plan and product roadmaps created throughout the divestiture process. As a subsidiary of Borland, CodeGear will have a separate brand, management team, research and development organisation, sales and marketing strategy and global operating infrastructure.
"CodeGear has a strong product portfolio and a large and loyal developer base. I am confident that with the right attention and focus, we will continue to do great things that have a substantial and positive impact on the global developer community", said Smith.
Separating the Developer Tools Group into a separate subsidiary is expected to give Borland the ability to focus on leading the growing Application Lifecycle Management (ALM) market. The company says it is betting on ALM because it is a high-growth market and we feel that software delivery is the last area of IT that continues to be a chaotic, unmanaged business process. Forrester Research expects ALM to be a USD 3.3 billion by 2009 with a 9.2% Compound Annual Growth Rate (CAGR).
In Q3 2006, Borland's ALM revenue was USD 53 million, a 90% annual increase from Q3 last year. In addition, the company has seen strong sequential double digit growth in ALM license revenue each of the past 3 quarters.
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