Re: Wild speculations about the "other" factors
- From: "Michael Swindell \(Borland\)" <first_initial_lastname@xxxxxxxxxxx>
- Date: Tue, 17 Oct 2006 00:58:08 -0700
Simon, I'm not going to dismiss any of your suggestions or conclusions,
because based on the data you're using they're perfectly sensible. Actually
very reasonable and well thought out. However, the data is pretty far off in
most regards. That's not your fault, as the data is pretty much proprietary,
so you're doing better than I think 99% would in extrapolating from
speculation. But to help you get closer, or at least in some instances
insight into some of our current roadmaps, I'll at least go thru your
speculations that you've listed below and try to fill in some of the gaps to
the degree I'm able.
1.) Enterprise customers - maybe there are a few VERY
big enterprise customers that buy thousands worth of
Delphi copies through a direct channel at Borland.
There are thousands of Enterprise customers that buy Delphi, some of the
biggest companies in the world - particularly financial institutions,
automotive, manufacturing, and telecommunications companies. Enterprise
customers make up both the majority of the Delphi revenue and roughly half
the developers (copies). Individual pro developers, hobbyist, and students
are also very very very important parts of the Delphi family and business
but I'm just responding to your assertion, or speculation that there are
only a few Enterprise customers which is just flat backwards.
What's strange about this theory is, that those still
should show some sign. Let's assume that those
enterprise customers exist - if they'd use Delphi
to create programs they then sell to the public, we
should know about it - after all, we've got a list
Enterprise customers by definition create programs that you never see or
hear about. They create internal IT applications for their own company's
employees or processes, not applications that are sold to end users. More
and more however, they are building customer facing Web Applications, that's
a big change from the early days of Delphi, but Delphi's sweet spot is still
"rich-client connected to big database" - that's "native rich-client" btw
;o)
any real real big products by enterprise customers.
Say, Photoshop, Microsoft Office ;), Acrobat or
something of that size.
These are not Enterprise applications. They are ISV applications that are
sold to end users. Which is another important part of our business. The
products are used by employees of Enterprises, but they are not built by
Enterprise developers, which is what we are talking about. The other sizable
segments of the Delphi business are VARs and Consultants.
Maybe part of the confusion is the term Enterprise. By definition a business
of any size is an Enterprise, but that is not what we mean by Enterprise
customers or Enterprise development. When we say Enterprise development or
Enterprise customer we're referring to the type of application development a
customer is performing for thier organization. We characterize as
"Enterprise" if they are developing applications to run their company or
some of their company's processes, typically developed by the IT department
and not a products department, typically used internally and usually not
customer facing, though there are certainly exceptions to this, and are
almost always connected to a database server such as MSSQL, Oracle, IBM DB2,
or Interbase.
So, that would probably only leave in-house
and specialized development. Maybe there are big
enterprise customers using BDS with thousands of
developer seats to develop inhouse applications.
You just described the largest market in the software development industry
by far. Also the segment with the largest portion of Delphi sales and
revenue every release since v1 client/server edition.
What I also find strange about it is that we should
have seen "We are looking for 100s of Delphi developers"
job adverts somewhere by big companies. I have never
seen something like this, Delphi job adverts I come
accross usually are for mid-size businesses.
Delphi's sweet spot is the small to medium enterprise, up to 50 developers
or the department within a larger IT organiztion. Companies typically use
Delphi because they can bootstrap a working project very quickly with a
smaller number of developers than their fully built out VS or Java teams.
Delphi teams are typically the tactical "special ops" team in a
organization. The VS teams are like the Army. You won't find as many jobs,
and the team sizes are smaller, thats partly a result of Delphi's
"advantage". However I think we can do more from Borland's (DTG's) side to
improve the awareness and availability of jobs though. Anyhow it's good
point, in fact we keep tabs on Dice and Monster data as well.
There is another thing: While stock market stuff
isn't exactly my cup of tea, from what I've read the
IDE products in total right now make up about 7% of
Borland's 300M yearly revenue (attention, very rough
numbers, if anyone with better ones could please step in,
thanks). So probably the revenue generated per Delphi
version is under 20M, and as it includes Java, possibly
much smaller. That's not much. That's not much at
way way way off. From Borland 2005 Annual Report "Revenue from the IDE
products were approximately $84 million, or approximately 30%, of total
revenue in the year ended December 31, 2005". I can't say anything about our
2006 mix, but that your numbers are way way way off.
all. It probably means the number of BDS copies sold
world-wide probably is a small 5-digit number. Actually
the number is so small that I'm now confused and first
wish someone else who has followed those earning calls
etc to step in ;)
way way way off again. Seriously waaaay off. But then your revenue number
was so far off, it makes sense that your unit count would then be as well.
What happens when data is bad? All the data that extrapolates from it is
even worse. Accurate data and info is critical to analysis. BDS has sold
very well. This guess just isn't even in the ballpark at all.
Anyway. What I wanted to say is: The BDS sales numbers
are SO small that I absolutely don't see where the
enterprise customers fit in here. If there really
Enterprise customers make up the majority of the units and revenue for
Delphi. So they're pretty darn important. However, with Borland's pure focus
over the past years on ALM and Enterprise tools, we did start to see fewer
developers coming in at the entry and pro level which is one of the reasons
we have brought in the Turbo editions and will continue to going forward
after spun off. The entry level and new developers will be an important and
renewed focus for us as we become our own company.
I don't want to come off sounding like individuals and ISVs aren't
important - because they are critical to us and I think you've touched on
some of the areas that independent and Pro developers really really care
about. Most of which is on our roadmap, but that doesn't mean we can't or
won't adjust priorities as necessary.
2.) Warning, extremely unfunded wild thought without
any base whatsoever here:
What if it's an enterprise customer who is simply buying the
DTG right now so they can dictate their needs to them?
That indeed would be an "other" factor and a good reason
to no longer care about us customers.
Lol. Would be an interesting story... but way way off. Big points for
creative thinking though! :)
3.) Vision. Borland may think that all we customers
don't know what we really want and are wrong, and that
each and everyone of us will in a few years thank them
that they've dropped native code and forced us to got
to .NET.
Not at all. Our customers absolutely drive our strategy and roadmap and
native code is key to both. We're not dropping native code.
I just want to set some of the perception vs reality straight because you've
put a lot of time and thought into this. If fact with somewhat accurate data
I would love to see an alternate roadmap v2 :o) Though, one really
critical thing that is missing from your alternate roadmap is real
development costs and time estimates which are are as important or more so
than the requirements because they really determine your ability, capacity,
and timing. There are some things you mention that might seem trivial or on
equal footing from a development perspective but are actually many times
more costly (time and engineers) to develop and maintain. This can be the
difference between something making sound business sense or bankrupting a
product or company. Knowing what things cost and how long they take makes
all the difference.
Anyhow I do want to say thank you very much for the input and rest assured
it was time well spent and appreciated. Even if your data and assumptions
aren't always in the ballpark, some of your conclusions and ideas are really
good. Customer input is valuable and critical, but input such as what you
prepared is more than valuable and it shows just how incredibly special and
great Delphi developers are. Thank you. Looking forward to more input and
insight from you and others.
Thanks
Michael
"Simon Kissel" <kissel@xxxxxxxxxxxxxx> wrote in message
news:4533957b$1@xxxxxxxxxxxxxxxxxxxxxxxxx
I've chosen to create a new thread as this is about
wild speculation, unlike other current threads that
are based on facts and conclusions drawn out of those.
.
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