When Java came out in 1996 it became an overnight juggernaut in application development. Java had a ton of hype when it was still in beta in 1995 and TIME magazine even listed it as one of the best products of the year--when it wasn't even released yet.
Microsoft poached Anders Hejlsberg, the primary language designer of Turbo Pascal and Delphi, from Borland in 1996 to have him work J++ their variant of Java. J++ followed the Sun Java spec with a few deviations, but it was just another testament to how quickly Java was taking over.
Borland was now competing with something that was free and they needed to pivot and well...they didn't.
Random articles for further reading: https://en.wikipedia.org/wiki/Anders_Hejlsberg
https://en.wikipedia.org/wiki/Visual_J%2B%2B
http://content.time.com/time/subscriber/article/0,33009,9839...
https://en.wikipedia.org/wiki/Turbo_Pascal
https://stackoverflow.com/questions/8460037/list-of-delphi-l...