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Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (7533)	11/19/1997 5:45:00 PM
From: David Miller	Respond to of 10836

Haven't noticed David Miller around here today Thanks for noticing, David, I spent the day in Queensland without email, and it rained all day... There are a couple of aspects of this deal that immediately strike me as significant. Long term, there is no doubt in my mind that Borland has acquired some good technology, and from all I have heard a great technologist in Roger Sippl. These two items alone would indicate that the acquisition is long-term positive. However, there are a couple of issues that have been briefly covered in recent posts that may be worth considering further. 1. If you need to include an ORB in your product, whether you are an Oracle or an SAP or a Sybase, there is a make/buy decision that has to be considered. As Visigenic has proven, many companies decided to OEM their ORB from a specialist source. Until the acquisition, Borland were one of these OEM customers. It was pointed out earlier on this thread that Sybase etc. have now become customers of Borland. The question must remain for a while whether these companies - who originally chose to license from an independent ORB supplier - will be equally happy buying from a competitor. Key to understanding this is the fact that because - by definition - all ORBs are CORBA compliant, there is surprisingly little differentiation. In other words, it would not be very painful for them to switch to a different, still independent ORB supplier. 2. There are some disturbing parallels in the acquisition process to the OPEN purchase last year. It will be interesting to see whether they did, in fact, learn anything from that activity, although there would be literally no-one in a senior management or finance position that was around at the time. The worst scenario would be the one that castrated the OPEN deal: the quarter the acquisition was announced, Borland's revenues headed south and the share price went with it. 3. Much has been made of the "150 new corporate customers". This is great, but care must still be taken when analysing their impact. I shall ignore the obvious question - why so many customers and so little profit - and look at the nature of ORB usage in corporates. The chances are that i) most of these have also a competitive product installed, and ii) the projects in which they are being used are "pilot" in nature. But I guess the key thing to remember here is that nature of the ORB business itself. Whereas in the past, a corporate commitment to a particular toolset was a big, expensive deal - not just in the product investment, or in limitations inherent in the proprietary nature of the resultant code, but training and skills acquisition as well - a commitment to a particular ORB is, at the lowest level, not a commitment to that particular company's strategy. So it cuts both ways. It is a great opportunity for Borland to confirm its enterprise strategy by confirming its commitment to CORBA. But it in no way creates, of itself, a unique selling proposition for Borland. Sorry for the ramble. This is actually a fascinating move from an industry perspective. david