The main argument people seem to make when arguing "lack of innovation" is something along the lines of "Delphi 7 isn't anything more than Delphi 6 with a bunch of 3rd party software packed with it" or "Even the MDA work Borland is doing was done via acquisition". While this is provably false, even if it were true, I don't see the problem. If a company looks at the develop vs. acquire decision (a logical extension to the build vs. buy decision) and comes to the conclusion that it is more cost-effective to acquire, then it is the smart thing to do. By recognizing that you are finite, and allocating your resources accordingly, you make wise business choices. To develop technology yourself despite a cost-effective alternative is nothing more than pride to the point of hubris.

Secondly, if one company - be it Borland of Microsoft - continually adds features to their product that are addressed by existing third parties, then they will cause a collapse in the third party market. After all, why should a third party innovate when they know that a company with deeper pockets will just come along and implement the same thing in their core product (more on this later). In addition, the same people that argue that Borland has just been acquiring technology argue that Borland should reinvent that exact same technology and bundle it into the core product. So they are effectively advocating that one company should address all needs for all developers. I would rather have choice and competition in the market to spur the industry to greater heights. Besides, making both of the first two arguments in the same post is illogical. Either you think a company should innovate everything, or it should innovate nothing. If you argue in between, then you are just arguing with which things got bundled in.

Lastly, innovation is only innovation in the short-term. In the long-term, the first product to market rarely gets a stranglehold on the market no matter how good it is. For examples look at Macintosh, IBM DOS, MIDAS, and countless other technologies. They were ahead of their time, but were not immediately accepted. Instead, they served as the thing that others wanted to "emulate". After the innovation had time to mature, another company came along and "borrowed" from that innovation. Typically, people who pish-poshed a technology (e.g. Delphi or MIDAS), come around and extoll the virtues of the new technology (e.g. .NET FCL or ADO.NET). So it isn't as much about innovation as it is about marketing or brand allegiance.