August 17, 2007

A Letter to Tod Nielsen: Forget the Cash Cow

I'm writing a blog letter to Borland CEO, who keeps treating Delphi like a cash cow. Let CodeGear be free.

Borland has released financial results for its second quarter 2007 and CodeGear keeps making money, even if less than possibly expected. The IDE subsidiary has earned almost another 2 million dollars, with revenues around 13.6 millions, more or less like the first quarter 2007.

During the same period of time, Borland reduced its revenues considerably in the ALM area, and even with cost cutting measures, it kept loosing money: the 6.1 millions loss was only partially compensated by CodeGear earnings. Now what I find a little annoying is that Borland CEO claims "ALM revenue was solid" (forgetting it was much lower than the previous quarter) and blames CodeGear for the poor results: "CodeGear was sequentially flat, but well below our expectations". I can understand the expectations and the corporate style of blaming someone else. But when I read the press release (again quoting the CEO) saying Borland needs "reducing our reliance on CodeGear to achieve ongoing growth and profitability", I was outraged. So I wrote the following blog open letter:

"Dear Tod Nielsen,

your and Borland's attitude towards CodeGear is very confusing, to say the least. Borland used Delphi and the other IDE tools as cash cows for so many years, failing to invest the deserved money in the products in terms of R&D, documentation, and marketing. Depriving the product of its quality, by rushing out unstable versions, keeping it outside of the company strategies, trying to save resources by piggy-backing on Microsoft's .NET strategy, Borland kept damaging the loyal Delphi user base, still very active around the world. If Delphi revenues fell, it was mostly for failed updates of companies still using it. Most of the companies I consult for (several dozens) are still on Delphi 5 or 6, and now are (slowly) evaluating Delphi 2007 as the first viable upgrade after many years.

Spinning off CodeGear, making it independent, letting it use some of its resources for investing in the existing and in new products, looks like a positive strategy. But when I read you being quoted saying that "We are focused on stabilizing this business and reducing our reliance on CodeGear to achieve ongoing growth and profitability" I wonder if we are not back to the cash cow attitude. Reversing several years of low-quality products, with limited new value for existing customers (mostly focuses on Win32 development), and regaining the confidence of developers cannot be a 6-month effort, but requires time and a more than a single good quality release. As Dean Hill wrote in the non-tech newsgroup: "They stick Delphi on the back burner for 5 years and then expect a massive turn around and exceptional returns in less then a year."

Dear Tod, when did you rely on CodeGear for achieving growth? This is totally new to me. You, and other CEOs before you, took the Delphi money and ran away. It was in ALM that all of the "growth and profitability" where supposed to come from, which was the reason for not putting any money into the IDE tools and trying to sell them out. Blaming CodeGear for Borland failures (ALM is not profitable after many years) is very childish.

Let CodeGear keep investing for a couple of years most of what is earning, would you? ALM is doing worse than that... it keep draining your resources. Or even better let it sail freely by selling its asset for a reasonable price. Quote a price, maybe someone can raise the money! Actually I have even a better plan to offer: If the ALM tools cannot make Borland profitable, go ahead and sell them to HP, Oracle, or Microsoft. You'll make a lot of money for your stockholders, who will be quite happy. And as any big company won't care about the Borland brand, CodeGear will be able to get it back.

A loyal Delphi developer."





 

40 Comments

A Letter to Tod Nielsen Forget the Cash Cow 

You hit the nail. I agree 100%
Comment by Joe on August 17, 09:17

A Letter to Tod Nielsen Forget the Cash Cow 

 Nice try Marco, but you seem to have forgotten the
old adage:

"My mind is made up, please don't bother me with facts!"
Comment by Barney Drake on August 17, 09:57

A Letter to Tod Nielsen Forget the Cash Cow 

 The analst call was a bunch of spin.  ALM missed its 
numbers, ALM was flat year to year after an 
acquisition and without that acquisition was down. 

CodeGear is working to turn the business around, but 
is going nowhere if the Cupertino, now Austin 
executives don't quick treating it like an ugly steep 
child or whipping horse and let it go. 

Based on these profitability numbers, the deal should 
have been taken...then maybe the Borland shareholders 
would not have to put up with ALM hiding behind the 
blame of CodeGear.  Remember during this last couple 
of years alot of interesting things have happened in 
ALM..the Mercury Acquisition, the Niku acquisition 
and now the telelogic acquisition....all at alot 
higher value than Borland is now trading at..
Comment by TA on August 17, 11:11

A Letter to Tod Nielsen Forget the Cash Cow 

Hi Marco

I agree!!

Thank you very much for your support

Best Regards

Claudio Piffer
Comment by Claudio Piffer on August 17, 12:23

A Letter to Tod Nielsen Forget the Cash Cow 

Have to say that you get the point, Marco. Wish
someone could hear your voice and take actions soon.
Comment by Lex Mark [http://lextm.blogspot.com] on August 17, 12:52

A Letter to Tod Nielsen Forget the Cash Cow 

 Marco, 
I totally agree. 
It looks like most of our (developers) fears are 
true; that CodeGear is only partially free. 
When comes to money, Borland takes the most. 
Allow CodeGear to stand on its own (stay away from 
its cash), and start to worry about Borland ALM 
business which has been very “profitable” to date.

I see Delphi as one of the best tools on the market, 
and it is time to for Borland to leave CodeGear 
alone. 
 
Comment by Chris on August 17, 14:59

A Letter to Tod Nielsen Forget the Cash Cow 

Totally agree with you, Marco!
Comment by Carlos H. Cantu [http://www.firebase.com.br] on August 17, 15:10

A Letter to Tod Nielsen Forget the Cash Cow 

 This is just how i feel about Borland.

May Codegear put back Delphi on the road again...
Comment by Thomas Bergerot on August 17, 15:10

A Letter to Tod Nielsen Forget the Cash Cow 

Bravo Marco
You are a real Delphi lover!
Comment by Mohammad.Mnt on August 17, 15:24

A Letter to Tod Nielsen Forget the Cash Cow 

Well said Marco.  Like you, I simply do not understand
the arrogance behind the comments from Mr. Nielsen.  I
am beginning to think that the sooner CodeGear can
dump the Borland executive team and break away
completely, the better chance they have at survival. 
Good grief, Nielsen sounds like a complete idiot.  Its
really hard to believe.  The man should be thankful
for EARNINGS from CodeGear.  After throwing Delphi
under the ALM bus for years, he should thank God that
he still has any paying customers left.  His recent
comments are NOT helping give confidence to Delphi
customers in any way.

Keep up the good work Marco!
Comment by Tom Wilk [] on August 17, 15:53

Re my comment posted August 17th 

 Please cancel that post. Because I read your blog on 
the Delphi feeds site, I posted a comment to your 
blog thinking I was replying to Codegear. Sorry about 
that. I was just in a hurry and didn't notice that I 
was reading your blog and not Nick Hodges. I have at 
least 5 versions of your book and refer to them often.

Thanks.
Comment by Joe H on August 17, 16:02

A Letter to Tod Nielsen Forget the Cash Cow 

 Marco
Well said.
Comment by VT Venkatesh on August 17, 16:17

A Letter to Tod Nielsen Forget the Cash Cow 

If Borland do revert to type and cream off the 
profits to support the management toys of ALM without 
investing the required percentages back into CodeGear 
R&D then Mr Nielsen should be congratulated on being 
the only one in the room incapable of seeing the two 
ton elephant. 

Being a Micro ISV and just having upgraded this last 
week from D6 to D2007 (with studio SA to boot), I'm 
not too impressed with his style. It shows a lack of 
grace and a contempt that should not be present in 
someone occupying such a leadership position. 

I expect the CodeGear guys are quietly seething and 
having to publicly grin and bear this latest kick in 
the teeth. It's not Mr Nielsen that has revived the 
reputation of the IDE business, it's his staff at 
CodeGear. Yet again they will have to fend off the 
conspiracy theories.
Comment by Paul on August 17, 16:17

A Letter to Tod Nielsen Forget the Cash Cow 

Does this guy realises the impact of such a 
statement, while we are trying to convince our 
customers to trust CodeGear-Delphi, they are 
confirming business is going bad... Who would you 
believe?
Comment by TDaniel on August 17, 16:39

A Letter to Tod Nielsen Forget the Cash Cow 

My personal experience with Tod Nielsen at Demo '93 when he 
was the head of the Access team and I was doing the Pdoxwin 
demo was all I needed for a character evaluation.

He apparently hasn't changed for the better.

Randy
Comment by Randy Magruder [http://randymagruder.blogspot.com] on August 17, 17:35

A Letter to Tod Nielsen Forget the Cash Cow 

I believe CodeGear is doing a lot of good things for 
Delphi developers and wish them all the luck. Hey, I 
don't really care if it's called "CodeGear Delphi" 
instead of "Borland Delphi" as long as it is kept as 
a viable platform for us developers in the years, 
decades to come!
Comment by G St Ana on August 17, 17:36

A Letter to Tod Nielsen Forget the Cash Cow 

 I would go even further to describe this situation as
corporate misconduct.  To tell a bald-faced lie to the
investors, while CodeGear is prevented from producing
timely and useful roadmaps because of SarbOx, well,
that's just criminal in my estimation.  
  If it were not for the gigantic rope tied around the
ankle of CodeGear, I would advise Borland's ALM
ventures to consume defecation and expire.  If the
investors have any guts at all, they should force
Borland to cut the rope and allow ALM to float to it's
deserved resting place on the miry bottom.
  We've all known the score for years. The tip of the
spear is in the loops that do the work.  Give the
process another 30 years to bake, and maybe then
industry can pin down that "this is the right way to
do it".  Until that time ALM is simply a boondoggle
that is way beyond before it's time. 
Comment by Terry Kellum on August 17, 17:54

A Letter to Tod Nielsen Forget the Cash Cow 

Bravo Marco,
i agree 100 percent.
Robert
Comment by Robert [] on August 17, 18:27

A Letter to Tod Nielsen Forget the Cash Cow 

For a long time already, the cash cow is starving due
to Borland taking away its food. Tod finally needs to
realize that a dead cow is not of much use anymore.
Comment by Simon Kissel on August 17, 18:32

A Letter to Tod Nielsen Forget the Cash Cow 

I Agree 100 %.

I must add that french spoken people  can easily find 
product translated in french.

With MS we received lots of advertissement for visual 
studio products all translated in french. 

MS Books are mostly translated too

For Delphi NOTHING !

Thank to marco to support us all
Comment by Michel Galet on August 17, 18:35

A Letter to Tod Nielsen Forget the Cash Cow 

Well said, Marco.
At work, I'm using a big suite of Borland products 
in the ALM and I saw in the past a little support. 
Everyone can read public forums to see that they 
aren't so active and some questions are without 
answer for months.
The Borland's ALM vision could be right but it's, 
IMO, a lot expensive.
Delphi is now a good product and I like it very much.
I migrate all my old projects to 2007 and I'm 
waiting Highlander for .Net development at the same 
level of M$ ide.
Borland, forget the cash cow because we don't buy 
any more your products if we aren't sure of their 
quality.
Comment by clacke on August 17, 18:54

A Letter to Tod Nielsen Forget the Cash Cow 

Sadly, this nielsen person has been clueless from day
one. The whole mess & circus in 2006 on spinning off
CodeGear is unforgivable for someone wanting to call
himself CEO. Even the carpetcleaners in the company
would have handled it more professionally.
By getting the magical tree letters CEO associated
with his name, Nielsen thinks its normal to have a
behaviour that is utter arrogance, cluelessness and
absolutely shameless. At this time, he's probably more
occupied in the golf club and hoping to get some quick
money from buying a couple of Borland shares. 
I have zero respect for nielsen. I would be deeply
ashamed in his place to get so much money for screwing
up so much! 
Comment by Bruno Fierens [http://www.borlandcircus.com] on August 17, 20:06

A Letter to Tod Nielsen Forget the Cash Cow 

This'll come off a little like doom-saying.  It isn't
meant that way at all.  But it is based on personal
experience.  I wonder if anyone else witnessed this?

I worked for a company almost ten years ago in Austin.
 Our parent company made a lot of bad calls that
drained their revenue, but we were doing great.

The parent company kept siphoning our operating
revenue until we were barely functioning.  After a
year, you could clearly see the parent company was
about to tank.

When our VP left, it was clear it was time to go. 
Everyone that was left, quietly trickled out the door
and three months later the entire enterprise closed
its doors.

CodeGear's a long way from that happening.  Still you
can see the same pattern over at Borland.  There must
be a school where these guys learn to execute the same
strategies instead of acting through common sense.

How about a show of hands for who's believes Borland's
explanation for its financial statements?
Comment by Cody Skidmore on August 17, 20:06

A Letter to Tod Nielsen Forget the Cash Cow 

Well said Marco.
Comment by Lee Grissom [] on August 17, 20:48

A Letter to Tod Nielsen Forget the Cash Cow 

 Just another dishonest idiot CEO.  

I just finished reading one of the many Warren Buffet
biographies, and Mr. Buffet will only invest in
companies that have honest CEOs that report the facts,
as miserable or damaging that they may be.  

Comment by JohnE on August 17, 21:45

A Letter to Tod Nielsen Forget the Cash Cow 

 Marco, you got it in one! Tod, either get a clue or
GET OUT and leave the CodeGear folks alone so they can
revive the Delphi business. As someone else said, it
would be MUCH better if you left the ALM management
toys (and toys they are - I don't know of ANY
developer that uses those things unless pressed into
it) to fade away or be bought by some other (stupid)
company. Let CodeGear get back to business and leave
'em alone!
Comment by Bruce on August 17, 22:56

Just Delphi Forever 

 Hi Marco
its a Good Idea and should Codegear put back Delphi 
on the road again

King Regards
Babak
Comment by Babak Ahadi [http://www.Delphi-Magic.com] on August 17, 23:34

A Letter to Tod Nielsen Forget the Cash Cow 

4 further comments:

1. some of the comments are a little harsh on Tod. I
appreciated some of his decision (ie, creating
CodeGear,  and guess he inherited an ALM disaster. I
approved them, but I disagree on the tone (and
personal attacks). Try to be let aggressive in the
comments, please.

2. There is a non-tech newsgroup thread (temporarily
quite short) referring to this post at (paste on a
single line):

http://dev.newswhat.com/amsg/
borland.public.delphi.non-technical/
46c5abd4@newsgroups.borland.com.html

3. I got an email from CodeGear's CEO regarding the
post (which I had forwarded him). I appreciated both
the speed and the content, which I asked permission to
share.

4. At the current rate, this might as well become the
single post with more comments.

- Marco
Comment by Marco Cantù [http://www.marcocantu.com] on August 18, 00:20

A Letter to Tod Nielsen Forget the Cash Cow 

I am very pleased to know that I am not the only 
person still using Delphi 5 and who is almost on the 
point of upgrading to Delphi 2007. Your letter 
highlights some of the reasons for still hesitating 
as although Codegear is a huge improvement on  
Borland I am not sure the leopard has really changed 
its spots. While most have understandably deserted 
the sinking ship it amazes me that Codegear still 
abuses the loyalty of the dwindling band of long-time 
Delphi users. What an opportunity missed !
Comment by John on August 18, 12:56

A Letter to Tod Nielsen Forget the Cash Cow 

 Good job, Marco. Very well said. I so wish it will 
be heard in Austin - I fear it will be ignored.

Comment by Holger Flick [http://flickdotnet.de] on August 18, 13:55

A Letter to Tod Nielsen Forget the Cash Cow 

 Well said.
Comment by Inoussa OUEDRAOGO [http://inoussa12.googlepages.com] on August 19, 19:34

A Letter to Tod Nielsen Forget the Cash Cow 

Not much to say: I agree 100% too.
Of course, it won't matter much, but maybe some
shareholders get to see it and finally think to
themselves: "hey, I too feel this whole behavior is
wrong! They're blaming the ONLY area that gave profits
for not giving enough profits to compensate for the
ALM failure..."
Comment by Fernando Madruga [http://memyselfanddelphi.blogspot.com] on August 20, 02:55

A Letter to Tod Nielsen Forget the Cash Cow 

Marco,

Excellent posting. I never fail to marvel at the 
deranged vision of Nielsen and his predecessors. 
Never mind that the market keeps speaking. Nielsen 
keeps telling us that the new "Borland" really has 
clothes. These chumps are all a bunch of "has been" 
managers living in a fantasy which will shortly come 
to an end. See ya "Borland". And see you Tod at the 
employment agency.
Comment by Stephen on August 20, 20:34

A Letter to Tod Nielsen Forget the Cash Cow 

 I just can't belive... How Tod could say something 
like that? Is he have any idea how big impact this 
will have for our future customers? 
Comment by Martin on August 21, 10:58

A Letter to Tod Nielsen Forget the Cash Cow 

Here's my thinking on why so many people are stuck on
D6: The upgrade cycle for Delphi is too short and
after D6 the main updates were on the periphery rather
than at the core.  I started with Delphi 1, moved on
to D2 quickly, skipped D3, went to D4, skipped D5,
went to D6, and pretty must stayed there.  Why? 
Because it typically takes two months to upgrade your
platform!  On a 12-month upgrade cycle, that's just
ludicrous.  (Not to mention that 3rd party component
vendors never seem to have updates ready when a new
version of Delphi ships.)  And this isn't just me --
it's actually a reflection of a number of places I've
worked over the years.

With many users skipping the D7 generation, D8 missed
the boat by focusing on .NET.  The next update was a
long-delayed D2005, which had more bugs than D4 when
it was released.  People lost trust in Borland. 
Third-party vendors were making more money on .NET
stuff than Delphi stuff, so they shifted their focus.

When Borland announced they were going to sell off the
IDE division, it seemed like an ideal excuse for a
bunch of 3rd party vendors to finally dump Delphi
support altogether.

So we're left with a huge installed customer base
literally STUCK using D6 because the critical
components that form the core of their applications
are no longer supported, or even available.  Their
owners folded up shop, never releasing copyrights even
though source was available (eg., Dream Company), and
leaving loyal Delphi users in the breech.

Borland's product philosophy created and nurtured
customer dependency on 3rd party vendors, and then cut
of the vendors at their knees.  Now they expect the
vendors to keep support the product in spite of an
imploding market, even as the corporate parent of
Delphi bleeds off revenues and refuses to invest in
proper product development and support.

Borland/CodeGear needs to face the fact that given the
choice of having to replace critical components like
Dream Components, it's a much safer bet to switch to
Microsoft's platform, if only because they KNOW that
MS will be around for a few years, as well as the 3rd
party component vendors.  Delphi has become a crapshoot.
Comment by David on August 21, 19:32

A Letter to Tod Nielsen Forget the Cash Cow 

" is very childish"
Comment by Thunya on August 22, 05:43

A Letter to Tod Nielsen Forget the Cash Cow 

 why does Borland have a history of hiring Idiots to 
run the company?

cheers
chrisC
Comment by chrisC on August 22, 08:08

A Letter to Tod Nielsen Forget the Cash Cow 

Hi chrisC,

The problem aren't CEO's the problem are people who 
hire them.

Regards,
Zenon
Comment by on August 22, 18:14

A Letter to Tod Nielsen Forget the Cash Cow 

Hi Marco



thanks for your effort marco , your delphi books is 
the main link between broland codegear and the 
users ,and we do not know where delphi would be with 
out you .

regards 
 
Comment by O.E.M on August 25, 01:56

A Letter to Tod Nielsen Forget the Cash Cow 

 Marcos,

First, I and all my developers in Eresoft Ltd, in the
Nigerian Niger Delta have enjoyed reading your
Mastering Delphi 6.We have 4 copies of the tome.  We
consider it the Bible for Delphi.

Now to Tod Nielsen's statement, I think the guy should
understand that Delphi as a product must survive
otherwise Borland will become a relic of the past.
ALM- according to one of my juniour developer- Borland
begging for alms from CodeGear. ALM will continue to
bleed and finally bring the entire Borland
infrastructure down.

In my opinion  CodeGear should become an independent
company with its CEO and Board of Directors.

As buggy and incomplete as Lazarus is we might be
forced to jump into that band wagon and slowly
translate all the internal components weve built since
delphi 1 into Lazarus components or may be even go the
way of Morfik and I hate to think VS

 
Comment by Ebikekeme 'The Chief Priest of Oginiza' Ere [http://eresoft.net] on September 5, 20:44


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