The Future of SourceGear Vault

With the recent announcement of Microsoft's Team Foundation Server (TFS), a lot of people are wondering about the future of SourceGear Vault.

On 24 May, I said a few things about this topic. In a nutshell, I claimed that SourceGear will be affected, but that we will be okay.  I still believe that.

But as I expected, not everybody believes me. On Joel Spolsky's discussion board, somebody named "JT" recently wrote:

"I've got a great deal of respect for Eric Sink and my heart sank a little when I heard the news that MS was going to enter the source control market because I knew this would be bad for Eric. (Regardless of what Eric says, I think it will be far worse for him than what he is saying.)"
First let me say that I take no offense at remarks like this.  JT is entitled to his/her opinion.  I have no proof of my claims.  Time will tell if I am right or wrong. 

Nonetheless, I think I make myself less credible by not showing both sides of my feelings about this whole situation. If the only thing that you hear from me is a positive spin, you are not sure whether to believe me or not. One of the reasons that I write here in my weblog is that I want to be real, so I'd like to take a moment and provide some balance.

It is my understanding that the TFS team started serious development somewhere around the fall of 2002.  Throughout the first half of 2003, we heard rumors about it. 

In early September 2003, we got confirmation from Microsoft.  Believe me, I was angry.  I ranted and I vented.  I used a few words my mother taught me not to use.

The scene of this announcement was weird.  It was an NDA'd meeting of the VSIP program.  All of the attendees were vendors of components or developers tools which integrate with Visual Studio.  Standing in front of dozens of their so-called "partners", Microsoft staff put smiles on their faces and announced that they will be competing with almost all of us.

There was a lot of emotion in that room.  Every VSIP vendor had worked very hard to be a part of Microsoft's "ecosystem" for Visual Studio, only to end up feeling very betrayed.  If this is how Microsoft treats its partners, how do they treat their enemies?

Incidentally, I thought the most interesting aspect of this meeting was watching the individuals who were part of Microsoft's VSIP team.  As a system, Microsoft does not truly care about its ISVs, but many individual Microsoft employees really do.  In fact, those people are exactly the sort of people who end up working in partner programs like VSIP.  I felt some sympathy for these folks, as they were the ones who had to facilitate the delivery of the bad news.

Just a few days before this announcement, Chris Sells had asked me to write a monthly column for MSDN.  When we heard that news from Microsoft, I nearly called Chris and told him where to stick his Longhorn Developer Center. 

Instead, I calmed down and made a choice:  I was angry, but I decided that I would not spend my life whining.  My deadline was approaching, so I sat down and wrote my first MSDN column, Whining by a Barrel of Rocks.

My beliefs about SourceGear's future have not changed since I wrote that article.  I said it then, and I will say it again now:  Markets are not as "black-and-white" as we think.

Without competition from Microsoft, SourceGear was drooling at the possibility of annual revenue in the 8-figure range.  (I consider that to be a heckuva a lot of money for a small ISV with no venture capital backing.)  This outcome is no longer likely, but with some clever changes to strategy, SourceGear can still be very successful.  Even with Microsoft in this market, we are going to continue having annual revenues of several million per year.

As the release of Visual Studio 2005 gets closer, more and more information will become available, and the world will begin to understand that TFS is not for everyone.  Even now, details are starting to appear.  I predict that TFS will be an outstanding product and a big success, but there will continue to be a lot of developers who want other choices, for one reason or another.

SourceGear will be here for those developers.  Ever since September, we have been adapting our strategy.  We have done and are continuing to do the things necessary to allow SourceGear to thrive.  Our sales have continued to be extremely strong.  Our customers continue to tell us how much they love our products.

Believe me. Don't believe me. Your choice. But I'm not going anywhere.