Embarcadero Takes on the System: Industry Leader Q&A with Wayne Williams, CEO, Embarcadero Technologies

Embarcadero Technologies, a provider of multi-platform tools that companies use to design, develop and manage databases and the data they contain, was acquired by Thoma Cressey Bravo a little more than a year ago in a $200 million go-private transaction. One year later, Embarcadero completed the purchase of CodeGear from Borland Software Corp. for approximately $24.5 million. The process of integrating the CodeGear products - which include the JBuilder, Delphi and C++Builder lines, as well as products for the PHP and Ruby languages - with Embarcadero's own products is underway. Embarcadero's professional database tools will be marketed under the DatabaseGear brand, and its application developer tools will be marketed under the CodeGear name. DBTA talked with Wayne Williams, CEO of Embarcadero, about how the companies fit together to provide system-wide capabilities and also how in a larger sense the worlds of application and database development are converging.

DBTA: What drove the acquisition of CodeGear?
Williams: Obviously, Embarcadero wants to grow. Our new owners, Thoma Cressey Bravo, are very serious about growing the company and we've got a two-part plan to do that. The first part is organic growth. We have been specialized in database tools - multi-platform cross-platform database tools. We are investing in that area, adding new products - one of which was DB Optimizer [introduced in July] - so that's an example of organic growth in our sweet spot. But the second part of the strategy is to grow through acquisition and CodeGear made an especially good fit for growth through acquisition for a few reasons.

DBTA: What are they?
Williams: One is that they are really the mirror image of Embarcadero on the application code side. They are fully cross-platform. There are a lot of ways to think about cross-platform but one of the best ways is if you just think about languages - and ultimately all software is written with a language. On the database side, we support nine languages. If you look at the CodeGear product line, they have nine languages covered as well. They have a long history of building tools that help their customers leverage multiple platforms.

DBTA: Was that the key motivation?
Williams: From a market and a customer standpoint, that was the most important reason why it really made sense. Now, when we look at what we have, Embarcadero is a company that is focused on systems as a whole. We are not making a somewhat arbitrary or artificial divide between database and code. Ultimately, data and code are what a system is all about and we have coverage across that full scope. Now, we can talk about providing tools for development of systems - period.

DBTA: What else?
Williams: CodeGear has a very strong international footprint so there were some really strong synergies as far as geographic footprint goes. Embarcadero's revenue prior to this acquisition was 75 percent domestic. We have struggled in the international markets and CodeGear is really the exact opposite. They have a very strong international footprint - almost 75 percent of their revenue comes from international markets. Now, we have a company that is almost split 50-50 as far as revenue goes and a footprint in markets that would have taken us years to build out.

DBTA: Are there any similarities in terms of employees and their philosophies?
Williams: It is amazing. It is across the board. On the R&D side, the group in Scotts Valley is really the original Borland. This is the group that invented the IDE - Turbo Pascal in 1983 - of which I was a buyer and user. It really created the IDE market. And some of those people are still there. We feel that one of the pieces of value that we got was one of the best development tools-engineering teams on the planet and we certainly feel that on the database side we have one of the best teams as well. At the end of the day, we are building tools that help people build and support software systems and so there's a lot of like thinking there. We are very clear that we are focused on building tools - we are not focused on building large enterprise offerings with seven-figure price tags. If you look at the R&D teams at the combined company, everybody is passionate about building tools. And on the sales side, there is a similar view.

DBTA: Why was it the right time to make the acquisition?
Williams: We at Embarcadero were ready. Thoma Cressey Bravo has a methodology where they look for a platform company which is a company in a segment that they feel is going to be the foundation for that two-part approach - part of it organic, part of it through acquisition. And then they spend the first year really optimizing the business, working with management to get the company into a position where they can start acquisitions. We were just at that point.

DBTA: Embarcadero was acquired by Thoma Cressey Bravo in the summer of 2007.
Williams: Exactly. It was June. We started working on this acquisition quite awhile ago, but we timed it so that we would be basically at that 12-month point and if Thoma Cressey Bravo was happy and our management team was happy, then we were ready to pull the trigger.

DBTA: What else factored into the acquisition?
Williams: The other part is really just being opportunistic. The CodeGear opportunity came up really at the right time. It also came up at a time when, if you have cash, there are great assets to be bought for a very good price.

DBTA: In a larger sense, do you see the worlds of application and database development converging?
Williams: Absolutely. They have always been interwined but it's been more arm's-length in a lot of cases than it should be. I started my career as a database developer 20-some-odd years ago and the roles then were a lot more separated than they are today. The person that did modeling, the person who did database administration, and the person that wrote code - they were three totally separate roles and people that didn't even talk to each other. The end result was intertwined because we were producing a system, but the roles were much more separated than they are today. More and more, you have developers who have to understand a lot more about a database, that have to be able to produce efficient SQL, have to understand data architecture issues so that they can code efficiently and have impact on the database design. It's a trend, it's a direction that has been happening for some time.

DBTA: How is the first new product since the acquisition - DB Optimizer - directional?
Williams: CodeGear has the mirror image of this product for code. It used to be called Optimizeit. It is being renamed - but essentially it is optimization technology for application code, for Java. So we've done the same thing on the database side. It's very different technology in terms of how we go about it, but the end result is almost exactly the same. It really deals with finding the problem and then helping you fix it. You are going to see those kinds of system-wide capabilities, so with DB Optimizer and with the optimization product from CodeGear, we now have system-wide optimization. From one vendor, a customer can acquire technology which allows them to optimize the system. And ultimately, I think, that's what customers want. That's what I've always wanted - I don't want this artificial divide between the database and application.

DBTA: So what's next?
Williams: One important thing is this direction of providing system-wide capabilities. You are going to see more of that from us - things like system-wide debugging. Big on our list is providing more technology that allows customers to deal with the system as a whole - find the problem with the system as a whole. Optimization and debugging are good examples of that and there will certainly be more.