Was it really more profitable for Borland to let Delphi nearly die?
Wouldn't they profit more if they kept investing (and in the correct
direction) but also had a larger market share then now?

I think they had to make a descision: Either against Microsoft or with them. They chose to go with Microsoft so they now have to do everything that supports M$ OSes and avoid everything that could drive users to open source. In both ways there is no guaranty for success: If they try to compete with Microsoft they have a strong enemy and if they collaborate with them they can go down with them if open source becomes stronger and stronger.

Jürgen Hestermann.
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