January 30, 1995
Issue 512, page 20
The other shoe dropped in the shakeup at Borland International Inc., after the sudden resignation of the company's high-profile founder and CEO, Philippe Kahn. Borland will lay off 40% of its worldwide work force, or 650 people, and devote all its efforts to software development tools, according to a restructuring plan the company unveiled Jan. 17.
Borland is actively trying to sell its consumer-oriented Simplify division, including the popular Sidekick personal information manager, say sources close to the company. But
the sale of the Simplify division, which grossed less than $10 million in 1994, will provide little relief from the $225 million in losses Borland has racked up over the past three years.
Borland says it will cut costs by outsourcing marketing and manufacturing, and streamlining development and support efforts. The Scotts Valley, Calif., company won't discuss what specific products will be affected, but Borland officials sought to quell rumors about plans to sell its dBase or Paradox databases by pledging continuing support for those products.
Cutting Muscle
Industry analysts question whether Borland can restore profitability without selling at least one development tool. ''Until Borland dumps a major product line, it can't reduce costs significantly,'' says Carter Lusher, an analyst with the Gartner Group Inc., a consultancy in Stamford, Conn. ''It's beyond me that the company can cut out that many people and not cut into muscle.''
Analysts say logical sell-off choices are the Interbase workgroup database engine or dBase, both of which have failed to meet Borland's expectations in the marketplace.
But Borland claims it's developing an upgrade to dBase that will catapult it into the lead in the desktop database market. Borland is running to catch rival Microsoft Corp.'s Visual FoxPro 3.0, an object-oriented up- grade that focuses on visual programming and client-server connectivity. Visual FoxPro 3.0 is slated for a second-quarter release.
Borland may have a tough act to follow, considering reviews from early users of Visual FoxPro 3.0. ''With the object-oriented and enhanced client-server capability, this product will make a huge difference in the way people write code,'' says George Goley, senior partner at Micro Endeavors Inc., a database training and development company in Philadelphia.
''We're going after a good chunk of the people who haven't left dBase and are looking for a great development tool,'' says Cristine Wittress, product manager for Visual FoxPro. Adds Nicole Roth, a senior analyst at International Data Corp., a research firm in Framingham, Mass.: ''Be- cause of Borland's weakened financial position, Microsoft stands a better chance of reaching that goal.''
Borland also is making management changes that signify Kahn--who relinquished his CEO and president titles earlier this month but remains chairman--has been effectively relegated to the position of company spokesman, according to a source close to Borland. It's likely that Borland's new CEO and president, Gary Wetsel, is counting on Paul Gross as the new company visionary.
Gross, 33, who is heading this quarter's release of Borland's much-touted Delphi 95 visual development tool, was promoted from general manager of languages and development to the newly created position of VP of research and development.
Copyright 1995 by CMP Publications. All rights reserved.
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