Meanwhile, Nielsen announced that CodeGear will be led by Ben Smith as its new Chief Executive Officer.

He said Smith is a seasoned technology executive who has been working with Borland and the Developer Tools Group for the past 12 months and will continue to work closely with CodeGear's existing leadership team to deliver on the business plan and product roadmaps the team hammered out during the divestiture process.

And as a subsidiary of Borland, CodeGear will have a separate brand, management team, research and development organization, marketing strategy and global operating infrastructure.

The two businesses are expected to be separated and reporting broken out financials in early 2007, Nielsen said.

"We believe by creating two separate operations, Borland and CodeGear can both obtain the necessary focus and dedicated resources to serve two important, but distinct markets," Nielsen said in a statement.

"We will continue to partner and share a mutual view of customer success. However, going forward Borland will be completely focused on leading the ALM market, while CodeGear will be focused on the software developer."

To read more insight about Borland's tools business, click here.

"We're taking on IBM Rational, Mercury, or whoever else," Nielsen told eWEEK of Borland's future direction as an ALM company.

"ALM is an extremely challenging space; Borland is up against the largest competitors in our industry in this market—IBM Rational, Microsoft, HP/Mercury, CA, and others such as Serena, Compuware, Telelogic, etc.," said Melinda Ballou, program director, Application Life-Cycle Management at industry analysis firm IDC in Framingham, Mass.

"Yet a variety of factors are driving life-cycle growth—for example, complex sourcing with offshore/outsourced development, compliance initiatives, SOA [service-oriented architecture] emergence—which expand the pie as a whole and create opportunity, assuming the company is able to focus its marketing and product strategy effectively," she added.

Moreover, "Key for Borland in the ALM arena is execution and coordination with the best practice approaches of its consulting arm acquired with Teraquest last year, which is differentiating," Ballou said.

Next Page: "A long, hard battle."