It’s very difficult to make money in developer tools. Microsoft could easily squeeze Borland by simply making MSDN tools free. Borland tried to diversify with databases, word processors, and spreadsheets, but Microsoft countered with Office, trying them altogether, and it became the default in every single business. Borland had great technology and was super innovative and I used Turbo C++ and TASM for years. But in the end, they just couldn’t find a cash cow market to keep them afloat.
Borland decided that they should target management instead of the developers as their focal point of product development. They ignored the Web for Delphi and decided that web development front would be covered by JBuilder, a paid and slow evolving product that could not compete against the fast iterating and free Eclipse.