Wednesday, August 03, 2005

Wake up and Smell the Coffee, Delphites

There's a lot of buzz lately about Borland, Delphi and the lack of future of the latter. Most recently, Lino from CodeFez has just posted a piece titled To Delphi or Not to Delphi about how Delphi should be split off into a separate company, because it's just not feasible for Borland to succeed with Delphi.

The reasoning is that, while Borland would of course love to please it's customers with high quality releases, you see, they just don't have the resources for it. 3-digit millions of dollar in the bank just don;t cut it. The Delphi community would be best served, Lino argues (as others have in the weeks before), by spinning off Delphi into a separate private company, with Borland owning most of the shares. That way Borland could "get some serious revenue back while still allowing all expenses to be paid for by the private Delphi company".

Hmm. Let's think about that for a moment. Right now Delphi is doing crappy, because Borland cannot afford to pour resources into it [what it can do, though, shrink down the team to half the size after each release, to make room for a $500k raise in the CEOs salary. That's no problem], and because on top of that, a lot of the profits made from Delphi sales (assuming such sales exist for Delphi 2005) are skimmed off off the Delphi unit into ALM, SDO and other TLAs that nobody, not even the Borland employees directly involved with them, can properly define in a way that another human being could comprehend. So to fix that, we're going to spin off Delphi into a separate company that not only will have to live (pay salaries, office space, hardware, marketing and what not) on what little profits Delphi drives in on its own, but will also send a good chunks of earnings back to mother Borland. Yeah. That sounds like fine plan to me.

Question: Assuming Delphi is actually quite the cash cow it is sometimes (when it pleases the person presenting the argument) made out to be, and only has too little resources because Borland skims the all off - why on earth would Borland be so stupid to spin it off and give up a considerable chunk of that revenue (and if they don't, what is going to improve)? On the other hand, if Delphi is not bringing enough return to actually make it's continued development feasible (as, again, it is often made out to be, sometimes even by the same people) - but instead needs injections from other Borland branches to live - how could it ever survive on it's own? Either way you look at it, it doesn't make sense; the onlt reason to spin off Delphi would be a "lose the worthless garbage" reaction.

But is spinning Delphi off or not really the important issue?

It's funny that for a society so bent on capitalism as the highest form of existence, it seems the majority of people seem to grasp so little about how that system works and how their involvement in it plays into the big picture. It seems that most people still think that Borland is that nice childhood friend that's only out to please them in equal relationship. After all, why else would Borland have those nice people with (Borland) tags in the newsgroups, chatting with them as their peers? Fact is, that mutual reationship is fiction. The only relationship between you and Borland is when you fork over your 3k for Delphi 200x and they hand over 4 disks of buggy software, sending you packing if you dare to complain.

Wake up and smell the coffee: Borland isn't worried pleasing the "Delphi Lovers" as Lino calls them. Borland, as a capitalist company (not to mention a public company) in a capitalist system couldn't care less about them.What Borland cares about (and as true capitalist entity should care about) is it's shareholders. Do not make the mistake of thinking that if dropping computing business altogether right now and going into selling canned fruits would mean a $.50 rise in share value and a few-hundred-k-a-year of bonus to the CEO Borland would even hesitate for a split-second and think Oh, but what about those poor Delphi users that depend on our products?. Of course switching to SDO - whatever that is - seems a lot more practical then switching to canned fruits, after all you can keep using your existing hardware and office buildings. But whatever pleases the stock market.

So does that mean Borland wouldn't spin off Delphi into a separate company? No, of course not. They might just do that. Actually the fact that here's so much talk about it lately might even mean it's in the plans and some of the talkers know more then they can admit. But make no mistake: If Delphi will be spun off into "The Delphi Company", it will not happen to please the Delphi Lovers - it will happen to generate the maximum revenue stream to Borland shareholders. The "Delphi Lover" will not have any part in the equation.

And why should it? That's what capitalism is all about. if you don't get it, you must have dozed off during your 12th grade American Economy course... get a copy of The Capital and catch up.


Anonymous Lino Tadros said...

Yes, I agree 100%
Maybe I did not explain my self well enough.
The point that you missed is that Delphi makes a lot of money for the amount of people involved with the product, all gains go to fund other prodcuts and ideas.
Of course, it is not about the Delphi Lovers, Borland is a public company, it is all about shareholders. Period.
Thanks for your reply and care.

10:18 PM  
Anonymous Kyle A. Miller said...

To say the problem with Borland and Delphi is the capitalist system is a red herring. I will agree that a public market comes with pros and cons. It's true that people who invest money in another party expect results. There is no such thing as free money, not in capitalism or otherwise.

11:09 PM  
Blogger Dwarfland said...

Lino: thanks for your comment. The main problem i see, i guess, is that whatever way you look a it, handing of Delphi is either not going to be in Borland's (financial) interest, OR if it is, it will be not feasible for "Delphi, Inc." to function on their own with "more resources" the Delphi gets now.

I agree with you that spinning off a profitable Delphi would be the best thing for Delphi users. But if Delphi is profitable, why would Borland spin it off? If it's not, then, well, then it won't necessarily become profitable just by being spun off.

Kyle: exactly.

12:39 PM  

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