I read with interest, but disagree with, this take on why the software tools industry dwindled in the early 90s. Like most historical accounts, it tries to achieve a linear account of a historical rise and fall: there were a lot of compiler vendors because writing a commercial compiler was relatively easy and then, as hardware advanced, remaining competitive became harder. 1-2-3.
I hold to a much more contingent view of history, at least in this industry. There were a lot of C compilers because the industry was expanding and people who hadn't been competitors in 1985 were competitors in 1990. And the reason that the commercial software tools industry shrank so dramatically in the early 90s had, it seems to me, little to do with the actions of the individual language vendors and much more to do with:
- the release of Windows 3.1;
- the wrong-but-wideheld association of GUI programming and object-orientation
- C++ as the winner of the "hybrid C" horse-race;
- Microsoft's decision to become more aggressive in the field, providing "good enough" IDEs, compiler tool-chains, linkers, debugging tools, etc. at a low cost
Zortech and Borland beat Microsoft to market with C++ and Watcom's 32-bit C compiler was flat-out better than anyone else's. You could argue about who had the best DOS-based IDEs, but Borland had a Windows-based C and C++ IDE on the market for a full year before Microsoft!
But Microsoft launched Visual Basic and then Visual C++ and MSDN (on CD-ROM!) and everyone wanted to build Windows apps -- it was a much bigger industry change than today's shift towards mobile development, because enterprise's wanted their internal systems rewritten in Windows, not just new development and not just customer-facing development.
Borland stumbled terribly trying to become a full-fledged competitor to Microsoft by creating office-suite applications. Whether that directly drained talent from the languages division or not, I can't say, but it certainly drained Borland's coffers and as Microsoft was having the San Jose Orchestra play to the Software Development Conference, the poor Borland crew was making their way home over rain-soaked Highway 17 because the company wouldn't put them up in Silicon Valley hotels.
In the UNIX market, we kept thinking that Sun was going to come along and show the PC guys what software development tools could look like, but they never marketed their tools well until Java, whose rise was also not due to the inherent merits of that language or its tool-chain. But that's a story for another day...