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Discord surfaces in wake of Inprise restructuring

Creator of award-winning JBuilder tool plans to divide itself into two separate entities, resulting in sizable layoffs

By James Niccolai and Ted Smalley Bowen, IDG News Service, 02/01/99

January 29, 1999 -- The latest shake-up at enterprise software and tools vendor Inprise has touched off criticism of the company management's long-term planning and dented employee morale, according to sources close to the company.

Inprise on Wednesday announced plans to restructure itself into two separate operating divisions, called Inprise and borland.com. The move will involve reducing by 20 percent its global workforce of about 950 employees, Inprise said.

The Inprise division will focus on selling enterprise software, while borland.com will be a Web destination providing software developers with tools and services -- including those from third parties -- said Inprise, which changed its name from Borland International in April 1998.

This restructuring is an "aggressive and logical step" in Inprise's effort to transform itself into a major enterprise software company, according to Del Yocam, Inprise chairman and CEO.

However, the move has prompted fears that the tools grouped under borland.com, including Delphi, C++Builder and InterBase, could be discontinued or jettisoned, according to the sources.

The Inprise operation will handle Inprise Application Server, JBuilder for AppServer, AppCenter, VisiBroker, ITS, and Entera, along with professional services.

"Since [Inprise's] Visigenic acquisition, there's been a new fervor about CORBA-based products. And Windows, or Microsoft-based technology, has been in disfavor," said one former Inprise executive. "There was the feeling that if we could sell or get rid of [Microsoft-oriented products], we should. A lot of people in those groups are scared, because they're not the focus."

According to one source, Inprise had looked for a buyer for its Delphi Windows-based development environment, reportedly seeking 0 million.

A company spokesperson refuted the rumored sale.

While crediting current management with good tactical ability, former Inprise insiders questioned the long-term strategic vision of Yocam and his team.

"They've put all the wood under the Java/CORBA fire. But, there's no reason to separate Delphi and C++Builder into borland.com, which should be a separate arm from the product groups. Instead, it appears they want the customers of those products, but just to keep them in the portal," a former Inprise manager said.

The Inprise spokesperson countered that research and development: funding for the tools grouped within borland.com will be unaffected by the reorganization, but that the move was designed to reduce the cost of selling those desktop and Windows-oriented tools, since the decline in that business has negated much of the growth in enterprise software sales.

Inprise will be hard pressed to differentiate its enterprise lineup from other vendors of Java/CORBA tools and application servers, according to the company's critics.

The upheaval comes as Inprise's long range fiscal prospects are once again in doubt.

The company announced Wednesday a rise in earnings for the fourth quarter and the 1998 fiscal year, ended December 31, 1998, which included one-time restructuring and acquisition-related charges and one-time gains from stock and land sales. Excluding those amounts, the company reported a fourth-quarter loss and an earnings gain for the fiscal year. Revenues for the fourth quarter and the year of 1998 were down slightly.

The IDG News Service is a Network World affiliate.