Delphi Economics - Road to Poverty (Part VI)

Correspondent from New York


The Road to Riches or Road to Poverty?
Software is a business which defies the old classic manufacturing laws. The old manufacturing laws was about creating goods from raw materials and having well coordinated supply chain. The software business is about writing good code and making money with per-user or per-computer licenses. We examine how Delphi and C++ Builder plays in this role.


The Fool's Gold Rush
Two centuries ago, the California Gold Rush started when someone discovered gold and everyone started to pan and mine valleys in California. Those who got rich were those who sold the picks, shovels and supplies to those prospectors. There were many who tried their hand panning gold and constructing make-shift creaky mines. While some got rich, many people died penniless: killed either by gun or by knife, maimed by mining mishaps and poisoned by mishandling mercury and arsenic.


Fast forward to today, the people who got very rich in Silicon Valley (California) software gold-rush are those who sell modern-day picks and shovels: the operating systems, compilers and utilities. Borland got very rich selling the expensive pick which a whole ecosystem of vendors would provide axillary products and companion add-ons.


Each vendor would sell their products at outrageous prices with many products that replace various functionality of the Delphi product:

• Since there is no good exception logging tool, the vendors MadExcept and EurekaLog would provide better stack handling and unwinding features than the usual access violation message-box.
  
• Since there is no good reporting tool, the vendors of FastReport and ReportBuilder would run circles around Rave.
  
• DbExpress is of such poor quality, there are numerous database replacement solutions which acts as substitute for TTable, TDatabase and TQuery (former BDE), IBTable, IBQuery, etc.
  
• IntraWeb is of astonishing poor quality compared to ASP.NET or PHP.
  
  and so on.
  
  
  

 Now, if you believe that there are more than 2 million Delphi developers and double-digit growth year after year:


- Why is IntraWeb crippled and needs an extra Euros 349 for SSL and ISAPI deployment?


- Why is TeeChart crippled and needs Euros 549 (and more) to get the full version?


- Why is QuickReports Delphi edititon crippled and requires additional payment?



It is either one of three situations:


1) Someone is falsely reporting the correct number. In Stack Overflow, it is said it is now more than 2 million.


Of which:


- Mr. Chad Hower is the owner of AToZed. Maybe Mr. Chad Hower's estranged wife wants a huge divorce settlement worth more than millions of dollars.


- Mr. Chad needs help to pay his legal bills (yeah, right).


- Mr. Thomas said good-bye to Nevrona after long period of inactivity on Nevrona's part.


2) Someone is lying and making unfair legal agreements which rob the vendors of add-on products which accompany Delphi by hundreds of thousands of dollars.


- The QuickReport and TeeChart vendor said that they do not receive any monies (or very little) from formerly Borland and


- There is dissent from Mr. Chad Hower. AToZed they had to remove certain features from IntraWeb to force people to pay-up to make-up for the difference in royalty-revenue and supposed profits.


3) Maybe it is all marketing hype to get Delphi developers to feel good and reasons to keep prices sky-high.


Lets' do some maths:
There is no 2 million customers. There was 1 million paying customers from Russia's eduction ministry and 750,000 customers.


The number of Delphi developers is 1.75 million developers (Source), (Source)- 2007
CodeGear said more than 3.2 million developers (Source) - 2008
The number shrank to 2 million developers. (Source) - 2011


Since there was 1.75 million and now 2 million, that leads to 250,000 developers added per year (i.e., 1.75m(2007) to 2.00m (2011). There were 83,333 developers added yearly. That sounds reasonable.


Since CodeGear was sold for around 29.8 million, to get 29.8 million dollars:


- Each new developer paid US$1,999 for wholly new license of Delphi Enterprise, it would lead to 14,908 customers.


- Each renewal for US$1,299 for renewal of Delphi Enterprise, it would lead to 23,941 customers.


- The payment for 29.8 million is actually 20 million in upfront cash and 9.8 million paid in the form of future earnings.


There are other evidence to disprove the 2 million Delphi developers:


- Third-party developers which sell companion products for Delphi sell their customer lists. Very well-known vendors have less than 10,000 customers over a decade. You can do the maths. Why do people need to sell at such expensive prices if there is over 2 million customers? Suppose that 50% would pay for it, you would get around a million paying customers. That would be 300 million dollars (i.e., US$300 x 1,000,000)


- Delphi Magazine, The Delphi Magazine would be one of the best-selling development magazines instead of closing down. The Delphi Magazine (USA) had more advertisement than actual content.


- Borland itself would have made billions year in and year out, if you believed the facts. Borland wanted more than 100 million for the tools division, yet reported annual losses instead.


- There would be thousands of jobs for Delphi developers and C++ Builder developers. The only jobs for Delphi are hotel lobby jobs (i.e., need Delphi Hotel Management usage or experience), Bubba jobs (in GM Subsidiary - Delphi) and for janitor jobs (i.e., need Delphi Resort Management usage or experience).


The roads to riches is based on hard-work, honesty, perseverance with accurate record keeping of financial figures and numbers. The road to poverty is based on fraud, dishonesty and cooked-up numbers. Just make sure the CFO's middle name is not Swindled.