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Embarcadero this released Delphi 2010 in August. They obliterated all low priced entry options and are going for a suicide “creaming” strategy with an entry level pricing of $600. "Suicide" may be a bit over the top, but expect an implosion in the Delphi user base. This is going to have major long term  ramifications on the Delphi development industry. To understand why this move is so important to the TurboCASH project, we need to go back 6 years and review our history.

The year 2003 was traumatic for me. The Y2K boom had receded, Dot Com had popped and a nuclear winter had descended on the software business. I found myself as the owner of TurboCASH, an accounting package, limited by the borders of South Africa, with 7000 users going - well er, nowhere.

Previous years had been good, but now I was spending my days grinding and picking the fillings out of my 7000 users, who given the smallest motivation, would have skipped to another package. I had taken my Y2K windfall, R 5 Million and invested it in developing TurboCASH 3. I took my last R 100K, spent it on a Sunday Times Advert for the lastest TurboCASH and the next day we got one solitary sales call! With all my money spent, new sales reduced to a trickle and with fickle users on the way out, things looked really grim. My only option looked to pick a few of my loyal customers and make them my staple diet, by razing my prices dramatically. It is Economics 101 and a spreadsheet. If the demand for your product is inelastic, raise the price, lose the marginal customers, but still make a greater profit. What saved me is that I started reading about Open Source …

After weeks of deliberation, we released TurboCASH free on the web and overnight the few people that has been paying us, stopped and became our first free downloaders. Revenue turned from a trickle to a dry well. I closed my office and retrenched my staff. I basically went home to die. Then after a few weeks something amazing started to happen. The demand for TurboCASH picked up and downloads spontaneously came in from all over the world. The retrenched staff started their own TurboCASH businesses, more consultants joined and and shortly a community was born. People that would never previously have dealt with us suddenly came in as our greatest supporters. This has continued growing and with no marketing this is now 100 000 users in 80 countries, growing at 40% in a world market that grows at 3%.

If todays situation did not effect me so much, I would find it amusing that this is precisely where Delphi finds itself. Delphi Pascal is the compiler that developers use to manage the core of the TurboCASH project. I started planning TurboCASH 3 in 1998, before Open Source was a mass market concept. Delphi seemed like a natural compiler to use. I had a 20 year history with these guys. The opening contract was the promise that with a $49 compiler called Turbo Pascal and the “Borland Non nonsense license agreement”, any developer could rule the world. As a developer living in the third world with nothing more than my intellectual assets, this sounded like a great deal. By the time 2003 rolled around I had invested R 5 Million in developing a Delphi accounting package. When we changed to the Open Source model, the Open Source “geeks” looked and me with their noses turned up saying it was not possible to run an open source project in a proprietary language. My argument was that all software, even Linux , reduces to Intel 32 bit code and that this code is itself proprietary. This decision has come back to haunt me.

The last 5 years have not gone well for the directors of Borland programming tools. The world has shifted around them and frightening images of a new era, that they do not understand, is crashing in around them. The custodians of Delphi have been caught like deer in the lights. Borland C, Borland Delphi and Borland Java have always been second position players to the market leaders. Despite this they have milked their one great asset, the VCL to create a cult following that includes ourselves and a diminishing number of others. To their horror, competitors like C Sharp, Java and GNU C are now released as free products and the rise of Free PHP has completely sidelined them. How do you play second position in a market in which the market leader has a price of zero?

What is it that we want from Delphi?

Stripped down, the Delphi program is actually a very simple project. What we, as developers, want is a RAD (Rapid Application Development) platform. We want this RAD to be a good representation of the Object Pascal paradym and we want an open architecture that allows us to add in whatever components we want. It is the programming equivalent of something like Joomla or TurboCASH. What we do want is for the developers to keep up with the moving trends in the market, for example if Alpha channel style buttons and form frames come up. The language definition of Pascal has not really changed much in the last 10 years, and the VCL does a fantastic job as a wrapper for all the Windows objects out there. When all is said and done there is a lot more said than done. Keeping this wrapper platform up to date is probably the work of no more than two full time developers. The rest fo it is just pastry and icing.

The VCL is the jewel in the Delphi crown. It is a wrapper for operating systems procedures, a cross between a Java Bean and a trimmed down dot net. A wonderful piece of technology, that thrives years after its delivery. The double edged sward is that the VCL is such a powerful program component platform, that it unleashes the power of the third party programmer in such a way that in a very short time these programmers are producing code in access of the originators. The VCL is almost the perfect Open Source vehicle, but for the fact that it is owned by people who simply don't understand the Open Source concept.

So why not just take the simple option?

Unfortunately this simplicity does not sit well in the qaurterly profit meetings of Software company owners, who need big budget releases to get their bonus. The answer, bloat the system, add in tons of components and go out and take on our community, the component manufacturers. Borland are still in the Microsoft dream of build it and they will come, add some marketing and a slick sales talk and you will be sure to close them, take the revenue stream and list it on Nasdaq. The reality is that in 2009, Bill Gates has now retired and this old model is eroding daily. Downloaders balk at spending $ 29 dollars. The opportunity the old guys miss is that what has changed is that there are now Millions of us on the net and capturing a small part of this at $ 29 can lead to a great business. In fact Borland came so close to saving themselves, by releasing Interbase as a Firebird Open Source project. A community jumped to attention around the product. Borland quickly changed their mind, closed it down went back to Interbase 6 and effectively gave the market to MySQL. But the tablets had been broken. Firebird has gone on to be a model Open Source project. For the last 5 years not a word from Borland about Firebird – as if it didn't exist - a lost brother banished in purgatory. With Delphi 2010 the prodigal son miraculous returns.

In this time the stumbling Borland have tried to find themselves as an enterprise company, a Microsoft subsidiary, a project development systems provider and a multi tiered database company, changing their name three times in the process and producing Delphi 8 for Dot Net, a standout as the worst Borland product in 20 years. In all this time while Moses has led them around the dessert, the Delphi customers and component developers have been busy in Canaan. Such that, what we have today is that the code and components developed in Delphi far outweigh the value of the Delphi project itself, and I really mean FAR outweighs it. On the thin thread alone, that there are “hundreds of thousands of Delphi programmers out there, desperate for an upgrade, the Borland directors have lead us to Embarcadero and Delphi 2010. The promised land is a miraculous upgrade that will convert the Canaanites and deliver the golden calf.

Posted by Jeff Cogswell on November 26, 2007 2:18 PM

The twentieth century thinking goes like this: We patch up some of our old Delphi releases, keep a few of our faithful core developers, add some VCL modules and produce a new release. Get a budget from the board and develop a full on hard selling strategy, backed with a convincing web site. We whack out the offering starting at $ 600 and we put together a Microsoft style marketing launch and road show to to win em over. The early adopters give us a strategy to “cream” our most loyal customers. We put in a really high price, cut out any cheaper options and take what we can get. We have a high degree of vendor lock in and some of our key corporates are chaffing for maintenance fixes. The idea seems like a slam dunk even though it borders on greenmail. There are two problems with this strategy. “Creaming” we learned at MBA school in 1980 and this is now 30 years later. Modern software companies are community driven and worse the hundreds of thousands of Delphi developers are not screaming for an upgrade, they are voting with their feet. The fanfare of new features look almost trivial and even the marketing guys making the product promos can't get excited. It is as if they already know that the game is up.

Oh how different this could be.

The basic problem is that the old systems work just fine, but for a few small changes required. What developers want is small incremental advances delivered almost for free and not a massive jumped up reason to fork out for an upgrade developed by the marketing department. The VCL component manufacturers simply want a cheap platform to make it easier to spread their wares. High compiler prices hurt this and cut off the innovation of thousands of independent Delphi developers. In the TurboCASH project I had to force through the upgrade from using Delphi 6 to using Delphi 7. The process was so traumatic and brought so little in gain that when I suggested upgrading again I was met with the threat of a palace revolution. Thank goodness I lost. Those developers that did take on Delphi 8 were bitterly disappointed. The second problem is that as consumers we have changed. We have simply got used to getting compilers – great compilers for free. We demand our components in source form. When someone suggests you go out and buy a $ 600 compiler it is like asking us to sacrifice our first born.

The creaming strategy is sure to fail

In looking through the selling features of the new Delphi 2010, besides an invitation to get closer to Microsoft all I could see was that “Firebird” had been welcomed back into the fold and now integrated with Datasnap. Did no one tell the Embarcadero managers that Zeoslib had done this 5 years ago and released the project as open source. Why would we possibly want to give up a free Open Source technology to buy into a proprietary one. Besides this, there is precious little to offer the Open Source community. I do not fully understand the corporate offering of Delphi 2010, but I would not be surprised if corporates also found them dispensable.

Why not a dual pricing strategy for Delphi?

This would seem simple enough, have a pro version cheaply with no corporate features and and enterprise system to catch all those rich corporates that don't mind paying. The sad part is that while the dessert march has been going on, the rich corporates that don't mind paying have all swapped to Dot Net and C#. All that is left is the scattered communites of component developers, upstreaming with each other. For five years in a row the folks at Delphi have produced dud releases. Embarcadero is the last chance. They can't separate the features, because the top end corporates would simply buy the entry level program and add their own or third party components. The opportunity to “cream” will have been lost. So in the name of rewarding the few – those that have released the five years of duds and still had the temerity to promised their new shareholders a windfall, - Delphi will be released at a price too expensive for low end developers, and at a price that will hamper the uptake of their components. Delphi is going to screw the very people that have actually made Delphi have value – the third party component developers.

This is going to get ugly.

Look into the future. In a few weeks time, the sales reports are going to start coming in that Delphi 2010 is not the runaway success that was foretold to the Embarcadero board. Fingers will point and someone will have to take the blame. My fear is that we will shut down and the coma that has existed for the last few years will recommence as they grind out the fillings from our teeth. All the time our technical advantage is being eroded. Expect a plague of frogs.

Shouldn't we just wait it out?

Surely this is the last throw of the dice? When Embarcadero finally gets it that they have been dupped and there is no “cream” to be got, they will put the finfos out to pasture and finally follow and Open Source or $29 formula. I would like to think it is possible, but the Delphi team may not be able to produce releases we rush for, but you can't deny that they are resourceful and have a massive survival instinct. The dBASE experience has shown that it is a long and weary path until the lights dim and finally go out. The commercial optimists, try to get the suits to spin one more time and when they finally can't it is too late to fix it. They are likely to blame this release failure on the Recession or the War in Afghanistan and ramp the Embarcadero board up for yet another development-release-flop cycle. Tehn we would have to gove Emarcadero about a year to try and move on the Delphi team and try to avoid ookign th loss in their fincancial statements. We could be watching the enemy traipse out VB Apps on The Cloud in Mono before we get any movement in Delphi. It could e a very long time.

This could be so much better.

Have no doubt that the intellectual diamonds have largely left the Delphi community for happier hunting grounds. We will never recover them. That there are still projects like TurboCASH that still thrive on Delphi 7, is simply a tribute to the original robustness of the VCL and the elegance of the Pascal language. But the real sin is that we lose the flower of our youth. How is it remotely possible that some pimply kid, sitting in his dorm room this summer could possibly be thinking . “Hell lets blow the college fund, go out and buy a copy of Delphi 2010 and write me a new social networking paradigm.” We will lose that next Facebook developer to Ruby, VB or CSharp. What possible chance have I, as the leader of the TurboCASH project got of some third world accountant storming out of an argument with his boss, downing his auditing career, investing $ 600 of his serverence pay in a Delphi 2010 licence and contributing to a new TurboCASH fork.

You may say it does not matter.

In the long run the outcome of this matter has the potential to effect everyone of the 100 000 users in the TurboCASH project. Yes it is true that right now TurboCASH, irrespective of is development in a 6 year old Delphi 7 compiler is actually leading the technical field in accounting systems. But I have been a software developer long enough to know that this will come back to bite us. While Borland trots out a slew of finfogenarians to display the Delphi 2010 release, the kids are off at some installfest, playing developer-developer on some other free environment. An old geek, like me that can see that if we do not change tack we will die with these guys. Delphi is still stuck in the outmoded belief that a few internal programmers in an office can have meetings with marketing departments and plan a world beater. The real Delphi innovation is in the independent component producers. The component developers will be severely hampered by high priced compilers, nay they will simply move onto C Sharp, PHP or VB.

Do developers have an alternative?

Do we want to move to an alternative? In a word – No. I must say it is going to be tight. Like most of the other component developers, I am resigned to the fact that I cannot lead my development community into a life of slavery at the hands of an expensive proprietary system, no matter what their motivation is. So far we have been playing a waiting game, sticking with Delphi 7. The day is approaching when we will have to move. However leaving is not easy. If you think changing your accounting systems is difficult, try changing your compiler. It is easier for a camel to pass through the eye of a needle than for 250 000 lines of codes to pass through another compiler. Lazarus Pascal is our light at the end of the tunnel, an Open Source project determined to completely replace the Delphi environment. This is a truly open source project and it is making strides. Many Delphi components have already been ported to Lazarus. More and more component manufactures can see the same outcome as we can. They are porting their apps to open source. I expect a government or educational group to make a move to support the Lazarus project in the near future. This will not be easy, but it is preferable to watching the Delphi owners writhe in the injustice of the fact that self righteous developers simply refuse to pay for other developers work. We supply for free and if we can't demand for free we paint sheep blood on our doorways and we start preparing an exodus.

Does it have to be like this?

Is it inevitable that the inertia that has kept Delphi walking in circles for the last 60 months will keep tightening until we are all strangled? No! This could be fixed if Embarcadero simply Open Sourced the entire Delphi Pascal Suite. Suddenly an army of developers would take up arms. All the money earmarked for Delphi world tours and marketing campaigns can be shelved and paid out as Embarcadero dividends.. There is no need for marketing Open Source, the community does that for you. At a zero price, there will be many takers. Suddenly Delphi will grow again and we will be able to capture the energy of youth.

Does this spell calamity for Embarcadero and the Finfogenarians?

Yes it probably does. Either way Embarcadero is going to take a bath, but it is not Open Source that is that caused this. It was buying into the wrong decision to believe that the Canaanites would convert. Pursuing this dream will only make for even more losses and likely to get a whoel lot of horses drowned in the sea . Will the current developers be made redundant? – yep probably. But guys you have been doing very little for the past five years anyway! And hey there is life out here in the wide world. You will survive in the twenty first century. The hundreds of thousands of Delphi developers have manged it. There is a thriving community of Open Source Delphi developers that survive off components. You more than anyone should be able to turn a buck on this stuff. Its little secret that once freed of the constraints of the marketing suits, developers under the GPL that are free to fork and innovate, produce radically superior code.

Don't the Delphi guys have a right to a living?

I mean after all Embarcadero owns this code right? The Delphi Dev team may have been going nowhere fast for 5 years, but it is their livelihood and they can make of it as they wish. Why even worry about the rights of the community? You could construe this article as simply me not wanting to pay $600 for a new compiler. Sure this is economics 101 again, the profit maximizing producer does what is best for himself. However the software markets are not for the feint hearted. Only the vicious survive. The inescapable reality is that the end users are demanding free nor near free application software. Thise that work out a way to give it to them will thrive. Cash hungry supply side thinkers will simply get driven from the market. Projects like TurboCASH Accounting are just agents in the supply chain. Its not about giving into the greenmail, its about our long term survival. The price of Delphi can drop to zero simply by letting go of the marketing campaigns and by moving the development from an internal paid team back onto the community. By following a strategy that looks after the interest of the few (No matter how righteous they believe they are) we simply make ourselves uncompetitive. If we don't align oursleves with companies that will progress into the future we will also end up stuffed in the Twentieth century museum.

Here comes the kicker, with hundreds of thousands of NEW developers Embarcadero may actually make a profit out of this in the future. The traffic of a massive community brings with it prosperity. The current strategy of a diminishing community certainly won't. Instead of spending the money on old fashioned internal development, sponsor and promote the spontaneous impetuosity of youth that abounds out there in the bedrooms, garages and home offices of the Open Source community. Get those pimply youths working for us and not for the other guys.

Embarcadero I implore you, Free my people.