Subject "DevCo" & Firebird
Author paulruizendaal
As we all know, Borland is spinning out the Delphi/Builder/Interbase
division, the "Develop" group in their annual report. Over the last
days some info has come out.

The new company, temporary name "DevCo", will have three product
lines, Delphi, JBuilder and Interbase. I guess C++Builder is out the
door and apparently Interbase includes tutti-frutti like JDataSTore
and NDataStore. Assuming that the entire "Develop" group is divested,
the new group will start with about $100 mln in revenues.

The new group will have 250..300 employees. The full cost per head in
Borland is currently $215K, so assuming that this figure is valid for
DevCo, the cost base will be about $65 mln. Taking 90% gross margin,
the operational profit will be (100 x 90%) - 65 = 15 mln.

Now, $215K in full cost is much too high. Red Hat, Sybase, MySQL,
etc. are all at around 160K - 180K per head. So, if DevCo learns to
be frugal, operational profit could get as high as $40 mln.

Conclusion, if DevCo can regenerate its product roadmap and come up
with exciting innovations, the investors could make good returns on
their money, even if they have to pay a $100 mln for it.

The biggest change that DevCo would need to make is that they are
currently making nearly all of their money from licenses, not from
services, add-ons and subscriptions. Making such a change is not
impossible, even for a closed source business: for example, Sybase
makes 35% of its money from licenses and 65% from related services --
they are more like Red Hat than you would think at first. Probably
DevCo are thinking along those lines, considering their comments that
they want to be like RH.

So, serious money is riding on the ability of DevCo to deliver
exciting innovations, and to evolve its business model. For the
Interbase side of the business, all the creativity and all the
engineering prowess would seem to be in the Firebird trunk, not in
the Interbase branch. We, as a community, have all the experience in
operating at low cost levels and with doing add-on + service stuff.

So, what should we, the community, do once DevCo is a fact? Wouldn't
it make sense to forget all the bad blood of the past and see if we
can hammer out a good way to help each other? "Cohabitation" as the
French would say.

Opinions, please.