Microsoft Invests in Longtime Enemy Inprise

They say politics makes strange bedfellows, but the high-tech business world has its fair share of odd couples. In the latest strange union, Inprise a longtime and bitter competitor of Microsoft, is receiving financial input from Redmond in the form of a $25 million stock purchase.

They say politics makes strange bedfellows, but the high-tech business world has its fair share of odd couples. In the latest strange union, Inprise Corp. (www.inprise.com), a longtime and bitter competitor of Microsoft Corp., is receiving financial input from the Redmond, Wash.-based software giant in the form of a $25 million stock purchase.

As part of the deal, Inprise agreed to support the Microsoft Windows 2000 operating system, including COM+ and the Windows Distributed interNet Applications (Windows DNA) architecture. Inprise also will license the latest version of the Microsoft Foundation Classes (MFC), the standard C++ class library for developing applications for Windows. MFC will ship with Borland C++Builder. Microsoft’s nemesis will license the latest version of the Windows platform software development kit (SDK) through the Microsoft Open Tools licensing program as well. Elements of the Windows platform SDK will be incorporated into Inprise's Borland family of Windows-based development tools.

In return, Microsoft made a long-term commitment to provide Inprise with technologies related to the Windows platform and Internet technologies. Microsoft also paid Inprise $100 million for the rights to use Inprise-patented technology in Microsoft products and to settle a number of long-standing patent and technology licensing issues. This brings the total contribution to $125 million.

The deal with Microsoft comes at a turbulent time at Inprise, formerly named Borland. In April the company dropped CEO Delbert Yocam and CFO Kathleen Fisher, then it followed up with the announcement of a loss of $25.6 million for the first quarter of 1999. Shortly thereafter the board of directors brought in Dale Fuller as interim CEO.

Inprise and Microsoft vehemently compete over several development products. And its not a friendly competition: Many developers that use Inprise products hold a strong "Anything but Microsoft" philosophy, and Inprise has publicly accused Microsoft of stealing Inprise developers.

Brett Smith, a spokesman for Inprise, says this pact is more about technology and less about philosophy. "Windows is and will continue to be important, and we're working closely with Microsoft. This in no way, shape or form limits us to only develop for Windows," Smith explains.

Smith also explained the low earnings results reported in April had no effect on the investment. According to Smith, Inprise doesn't need such investments to stay afloat.

At Zona Research Inc. (www.zonaresearch.com), its analysts have come up with the reasons this deal was attractive to Microsoft. A recent report from the firm points to Inprise's VisiBroker ORB as a technology Redmond would like to get its hands on because of the CORBA access it provides developers. "Oracle, Netscape and Sun have already licensed the VisiBroker ORB, and Microsoft's licensing of it would give an underlying unity to application development tapping into CORBA objects," the report explains.

Zona also reports that the deal gives Microsoft access to voice-over-IP technology that Inprise has been working on with AT&T and to Inprise's JBuilder, which could become a potential augmentation to Microsoft's Visual Studio. Microsoft gained the rights not to JBuilder itself but to its underlying patents.