Wednesday, January 7, 2009

Borland CEO Leaves for VMware Amid Layoffs

Application lifecycle management (ALM) tools maker Borland Software CEO Tod Nielsen has left the company to join VMware as chief operating officer.

Borland also said it will lay off about 130 workers as part of a cost-cutting move designed to save between $12 and $14 million annually.

Nielsen, who joined Borland in November 2005, will remain on Borland's board, the company said Tuesday. Borland has named Chief Financial Officer Erik Prusch acting president and CEO.

Prusch will have his work cut out for him, according to Jeffrey Hammond, principal analyst at Forrester. "It's challenging times for [Borland]," Hammond said. "I think the [Open ALM] vision is good and I think the strategy is sound. But I think they are kind of getting caught between commoditization on one hand and by larger competitors on the other."

Hammond said ALM vendors like IBM have been very aggressive, while Microsoft Team Foundation Server (TFS) has made significant in-roads based on its low per-developer cost. He also singled out dev tools like Subversion which are becoming increasingly attractive to cash-strapped shops trying to weather the recession.

"Increasingly in the SCM space, we are seeing different tools being used. There are other options that, for better or worse, people seem to be choosing." Hammond said.

At VMware, Nielsen will be reunited with CEO Paul Maritz. The two worked together at Microsoft, where Nielsen was an evangelist for Redmond's key developer initiatives as vice president of developer marketing.

Borland's stock dropped sharply on news of the layoffs and Nielsen's departure, falling from $1.07 per share on Tuesday to $0.92 per share at the close of trading on Wednesday.

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