Saturday, November 14, 2009

Q: What killed Delphi? A: Greed.

Your reviewer was looking at the Delphi economy and wondered what was wrong.

Delphi Economics 101
The idea was this, there are consumers (Delphi programmers), producers (Third-party vendors or "3rd party"), distributors (shops). The producers ("3rd party") provide products ("components", "libraries") and services ("programming services") to consumers. All of this ecosystem, is bound by Borland/DevCo/CodeGear/Embarcadero.

Delphi Market
The Delphi Market is unique that all the players produce code for Delphi/C++Builder. The market is dominated by few players who provide all-in-one libraries (e.g., TMS, LMD, DevExpress) and must-have libraries in specialized areas.

In an ideal market (so it goes) everyone should be earning money, the consumers should be making killer apps, making good database apps, the producers should be doing cutting-edge research and development to make the next generation of components, the shops should be selling plenty of products. Borland/DevCo/CodeGear/Embcarcadero should be earning millions, if not billions of dollars and reporting gains every year...

The cash cow?
It is interesting to note or seem that nobody is earning money...

- At the top, Borland was bleeding money and making millions of dollars of losses, the producers (3rd party) vendors were losing money.

- If you have access to, say, BS1 private forums, you can see BS/1 Trevor Davis total sales, or DevExpress private forums and see Julian Bucknall lament about poor sales, ditto for TurboPower private newsgroups before it crashed and burned.

- The shops say that Delphi stays on the shelf for many months before it is brought...

- The consumers complain about high costs, poor service, poorly made products.

Prices kept artificially high...
Since everyone make "losses", they justify that prices have to be kept high to prevent more losses from happening. Would you pay thousands for virtually worthless goods, or a subscription to nothing you can enjoy?

Dunn & Bradstreet Credit Reports, Equifax Credit Reports, and others
While Borland's, TurboPower's, Sybase (Advantage Database) balance sheet is available publicly, getting information about private companies is hard to get.

Your reviewer DelphiHater was shocked at what he found... Most companies were reporting profits year after year, companies that just sold components and no updates were earning average US$80,000 profits on US$200,0000 gross earnings (40%) (btw, very good profits for very little or no work), respected companies were doing US$500,000 to US$4,000,000 gross earnings a year with average 30%-60% profits. Your reviewer started to wonder...

Prices kept very high to report high profits
Your reviewer was surprised by those credit reports, the obscene profit margins - you cannot say you are losing money, when you make high profits.

Delphi the black hole cash cow
It is very evident that Delphi is starting to become the cash-cow to be milked to the last dollar... The consumers are already forced to buy additional copies of Delphi for no reason (yearly SAs), the producers would be changing sales tactics to get as much money as possible by changing models to annual subscriptions, the shops would be going by region (e.g., a seller who just sells to BElgium-(something)-NEtherlands area) to protect their turf.

In traditional economics, with high prices, big profits margins, such market would be bound for severe correction soon...

Greed, Excesses
The problem is, with all that additional money, there should be plenty of Research and Development (R&D) money, but there is very little to show. DevExpress VCL has no report writer (it was promised but...), TMS only new libraries are mostly bug-fixes and re-hash of older components, LMD Pack and ElPack have just be mostly bug-fixing... ModelMaker just mostly bug-fixes too...

Corrections
Sooner or later, the consumers will revolt and refuse to pay, this is evident in this week's newsgroup posting, when Daniel T., the owner of RealThinClient * discounted his product 90% and then nobody wants to pay for next year's Euro (whatever) subscription fees.

The consumers who pay for Delphi got really put-off with Delphi's registration model and shoddy on-line activation system.

The producers who make libraries suddenly get unhappy customers wanting not to pay by using non-legal products (you know...)

[*See: https://forums.embarcadero.com/thread.jspa?threadID=28054]

Conclusions
Is the glass half empty, or half-full? Maybe the best answer is, don't kill the cash cow by denying it grass to eat, and don't over-milk the cow that it dies...

But wait, maybe the cow is nearly dead because the cow is over-milked and even though there is new grass, nothing will stop it's demise.

There can be two places left to go:
- Either the Delphi Ecosystem will have to undergo severe correction with massive price discounts, or lower prices for attracting new blood,

- Everything remains the same... and ...

"I recently switched to 64-bit Windows and dumped TotalCommander for 64-bit alternative, used my own private PHP 64-bit web-based email client on my 64-bit web-server, I started to move everything to 64-bit native applications..."

"Delphi-based apps? There's no 64-bit Delphi, and nothing new. Just paying more and more unwanted bills every year"

"There's a big list of great (expensive) applications made with Delphi, but Websites made with Delphi? That would be mostly empty list"

If there was the day after the fall, it would be, Delphi has priced itself into oblivion, with C#, NET, Python, PHP and others, who cares?

Maybe your reviewer might, those who use Delphi might care, but you know what?

Maybe the grass is greener at the other side, that PHP jobs, Java Jobs, and VB jobs pay more money, and all the money for Delphi is gone before the first dime is made...

:)

Last notes
This article will be very hard to challenge without getting the Dunn & Bradstreet, Equifax and other credit report data. By the way, why not take the challenge? You'll be surprised at what you see.

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