Tod Nielsen abandons Borland for VMware

No amount of good execution could have made up for the flawed strategy at Borland

In what may go down as the best career salvage move of the century, CEO Tod Nielsen has left his post at Borland in order to take a COO position under Paul Maritz at VMware. Nielsen previously worked with Maritz back at Microsoft for more than 10 years running their developer program and ultimately managing the platform division.

Nielsen took on the CEO role at Borland in 2005 after a brief stint at Oracle and several years at BEA as part of the acquisition of Crossgain. The current situation at Borland leaves little doubt as to the reasons behind Nielsen's departure. The company's stock is trading under $1, reaching a five-year low from a peak of around $10 in 2005. Borland's market capitalization now lies at just over $50 million, far less than the company's annual revenue run rate of around $180 million. In mid-2008, Nielsen divested of Borland's once-great tools division for a paltry $23 million to Embarcadero, a move that left the company with a sharper focus, but relatively stagnant performance.

If leaving Borland is Nielsen's best career move of late, then no doubt joining Borland was his worst. Perhaps better execution might have improved Borland's fortunes, but I think this is likely a case where the strategy itself was broken. As I mentioned last week, no amount of good execution can fix a fundamentally flawed strategy. Perhaps with more runway, Borland's focus on ALM might have made more progress. But even that seems to be a bet that ignores bigger changes in the industry toward distributed Web development, cloud computing, and open source.

No doubt Nielsen is in a better position to leverage these trends at VMware.