I talked with Denise Franklin at Inprise IR a few days ago. I thought I'd share some of the info she was able to give me.
Borland.com
The primary reason for creating this division was to better market the Borland tools. She admitted that Inprise was getting all of the attention over the past few quarters, to the detriment of continuing tool sales. They also announced plans to market complimentary products to market on the site, alongside the Borland products (on the web site). She mentioned they've had a lot of interest from third parties since making that announcement. They are also in the process of hiring a e-commerce/marketing company to revamp the selling end of the site.
The revenues from Borland.com were low in Q4 due to lack luster sales and the delay of C++ Builder. She felt that if C++ Builder would have been released on-time, they would have made estimates. She mentioned that revenues from Borland.com have bottomed at about 20% of the total revenues. They expect to see revenue growth as a result of increased marketing as well as future revenues from the site itself (commission from 3rd party product sales and advertising).
With the creation of the Borland.com division, we will get a better view of how both the programming tools and enterprise divisions contribute to the bottom line. When they announce Q1 earnings, we'll get to see the year over year results from both divisions and see where the growth is. From what IR told me, the enterprise business has yet to make a profit. That means that the profits from the Borland tools (again, about 20% of revenues) have been funding the growth of the enterprise business. Denise also mentioned that Del plans to have the enterprise business standing on its own two feet this year.
I also asked about the longer than expected turnaround. She mentioned Del had started in Dec '96 and that he mentioned 8-10 quarters. We are now in quarter 9, so she didn't think they were really that far behind, if at all.
The layoffs announced were across the board excluding professional services and sales (I assumed that meant they didn't reduce those numbers).
I also asked about the real estate they sold and she mentioned that the corporate headquarters was for sale as well. They are considering whether to be more aggressive at selling it (hiring a broker etc). She mentioned the building is very expensive for them to operate from. The sale of the building would free up a lot of capital and potentially save them a few million a year.
On the Inprise side, they are still looking for consultants. They were really excited that they were able to acquire Apogee last fall and have acquired many smaller firms around the country. Some of these smaller acquisitions were say 3 consultants in a partnership, which were just all hired by Inprise. She mentioned it was difficult to get these professional services people, but that Inprise was successfully finding them.
The AppServer has been well received, there is a lot of interest in the product..
Overall, I had a good conversation with her. I think it is too early to judge Inprise a failure, but I've mentioned that before. I've also mentioned that this is not the same company it was two years ago. This should be a very interesting year..
Dennis |
