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Former Employee: WebGain Out Of Business

A former employee at WebGain has confirmed that the Santa Clara-based tools vendor is no longer in business.


"It's over," the employee, who requested anonymity, told CRN Tuesday. He called the WebGain debacle, "How to spend $200 million in 24 months," citing the amount of funding WebGain received from investors, which included Warburg Pincus Ventures and BEA Systems.

WebGain launched in March 2000 as a joint investment between Warburg Pincus and BEA. The company's first move was to buy the VisualCafe development tool from Symantec, which since has become a popular Java integrated development environment (IDE).

Reports from major news services have surfaced over the past two weeks that WebGain headquarters here were not open for business, and that the company's employees have been laid off.

The former employee confirmed that most company employees have been fired, though there are still about eight people working out of a makeshift office in San Jose, Calif.

He said WebGain is still trying to sell off its final product, WebGain VisualCafe.

"The product is based on old code, and the developers out there do not like it," said the former employee. "It has a lot of bugs, no one wants to buy it."

Mike DeBellis, principal and e-business CTO for Deloitte Consulting, said that WebGain's VisualCafe used to be "our preferred IDE for BEA" projects, but Deloitte is migrating away from that. He said he did not know the status of the product now.

"I don't know who has picked up Cafe," said DeBellis. "It will be a shame to see it flounder."

In mid-June, Oracle finalized its purchase of WebGain's TopLink family of database-mapping tools, which were supported by WebGain Canada, a division of the Santa Clara-based parent company. Oracle, Redwood Shores, Calif., also acquired 90 TopLink employees and 700 TopLink customers in the deal.

WebGain's former CTO, Ted Farrell, is now senior technology architect for development tools at Oracle. Oracle also has devoted a section on its Web site to help migrate VisualCafe users to Oracle Jdeveloper.

BEA could not be reached for comment Tuesday, but the company wrote off its WebGain investment in its last financial statement, the former WebGain employee said.

"[WebGain is basically Warburg now," he said.

He added that BEA is shifting its marketing support from VisualCafe to other Java IDEs. Richard Nunez, BEA's WebGain partner manager, could not be reached for comment Tuesday.

BEA in recent months has been tightening its ties with independent tools vendor Borland, which seems a likely candidate to fill WebGain's shoes as the preferred IDE for BEA. BEA was a gold sponsor at Borland's BorCon user conference in Anaheim, Calif., where BEA executives also spoke.

Frank Slootman, senior vice president of Borland software solutions, said Borland is aggressively courting VisualCafe users, offering discounts if they switch to Borland's JBuilder IDE.

The former WebGain employee added that WebGain's skeleton crew is still selling VisualCafe to customers, even though, "it is not being supported and all engineering [staff has been fired," he said.

There has been no official announcement from WebGain about the company's status. "[Customers are saying, 'What do we do?'" said the former employee. "All of the news has been coming through innuendo, rumors or on f*****"

On Tuesday, the phone number of WebGain was no longer in service, though CRN was able to reach a WebGain general corporate mailbox through a toll-free number on the company's Web site. At press time, a call to that mailbox had not been returned, but the company's Web site is still operating.

Aside from Oracle and Borland, other Java tools vendors said they are prepared to fill in the gap WebGain's demise leaves. Sun said it is offering a discounted upgrade of $995 per developer seat for VisualCafe users to transition to Sun ONE Studio 4, Sun's Java development environment. IBM is offering to train WebGain developers on its Java tools to lure them, according to the company. TogetherSoft also is hoping to win some of WebGain's customers with its tool offerings, a spokesperson for the tools vendor said.

With the close of WebGain, TogetherSoft and Borland remain the two major independent development tools vendors in the industry.

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