harry … the ASIC guy

While growing up in the concrete jungle of New York (Brooklyn to be exact), I developed an interest in the natural world that I got to see too little of. I almost never missed a Sunday night episode of Marlon Perkins and Jim Fowler on Wild Kingdom.  And now, of course, there are dozens of regular shows on the Discovery Channel, National Geographic Channel, and on and on and on.

If you’ve watched any of these shows then you know that there is a universal truth in nature. Where there is water, there will be life.  Find a stream and you will find water which nourishes plant life which is food for small animals which are food for larger animals. A stream becomes an oasis of life … a little ecosystem that supports itself and flourishes.

Once they find such an oasis, animals won’t leave on their own.   Even if there may be something better far away, it’s not worth the risk of the trip, because they have all they need. But sometimes nature intervenes. Perhaps there is a drought and the water dries up and the plants fade away. Then the animals have no choice but to look for “greener pastures”.

When animals were first domesticated, shepherds understood this principle and concerned themselves primarily with the care of the flock (imagine some pristine image of David). They knew that the sheep would not stray as long as they were provided for. Ranchers understood this as well, but eventually the they started to worry about other ranchers rustling cattle.  So they built fences to keep the cattle rustlers out and to keep their cattle from straying.

In business, companies have a choice … to focus their time and efforts on creating streams that satisfy their customers’ needs or to create fences to keep the customers in and the competition out. In EDA, the industry leaders have done both.

• More than a decade ago, Synopsys was an innovator by creating SolvIt! (now Solvnet), a 24/7/365 available knowledge database that enables uncountable designers to solve problems on the weekend or in the middle of the night. I have spoken to several Synopsys customers who cite Solvnet as one of the key reasons they stay with Synopsys tools. Solvnet is a stream.
• Just a few months ago, Cadence launched it’s Online User Community. Extended from it’s existing user forums, this community offers access to Cadence and designer tool expertise and interaction with those driving the direction of future tools. This is also a stream.
• Over the last several years, Synopsys has resisted customer requests to offer short-term (e.g. monthly or weekly) licenses for peak use, so that customers could match their license usage with peak needs. They feared that such an offering would jeopardize longer term sales and  lower switching costs for customers. This is a fence. (To be fair, Synopsys has recently started offering short-term e-licensing options)
• Cadence recently kicked dozens of competitors out of its Connections Program. This is a fence.

I’m not such an idealist to think that EDA companies will focus entirely on creating streams and not consider the competition.  That would be foolhardy. But there is a corporate culture, a corporate mission, that is either focused on the customer or focused on the competition.  That’s a key difference.

There has been a lot of discussion lately about Cloud Computing and Software-as-a-Service for EDA. Some feel it is inevitable. Others point out all the barriers that exist.  Ultimately, I think it boils down to one simple question:

• Does the EDA industry as a whole, and do EDA companies individually, see their mission as creating streams or building fences?

If just one company sets as it’s mission to build a cloud computing stream, a SaaS oasis, to nourish the design community, then it’s going to happen. And designers and customers will come.

On the other hand, if the EDA industry focuses on building fences to lock customers into long-term agreements, to discourage interoperability, and to squash standardization efforts, then nothing will change and the industry will dry up and die.

It’s up to you. Go build a stream.

harry the ASIC guy

Considering what I’ve been hearing about the status of the Accellera VIP Subcommitee activity regarding OVM / VMM integration, I was rather surprised to see the following synchronized press releases from Mentor and Cadence yesterday:

• Mentor Solution for OVM Reuse of Legacy VMM Code
• Cadence Open Source OVM Adoption for VMM Users

As I understand, the Accellera VIP Subcommittee has just recently begun tackling the real crux issues regarding integrating the 2 methodologies such as:

• Casting of disparate types
• Synchronization of the simulation phases
• Message reporting

My speculation is that Mentor and Cadence are just now formally announcing the availability of the “fixed up” VMM code that had previously leaked out in a blog post by JL Gray.

Does anyone out there know what’s really in this release? It would be good to hear directly from the vendors on this.

How about OVM on VCS? Has anybody been able to get that working?

harry the ASIC guy

I spoke to a friend of mine at Cadence yesterday morning.

“I came in this morning and tried to log on and I couldn’t.  Turns out I must have mistyped my password, but I was worried there for a minute.”

That seems to sum up the mood at Cadence yesterday as the Turk made his way through the hallways of Cadence worldwide. “I think I’m going to go on vacation for the rest of the day”, my friend said later.

By now, I’m sure you’ve heard it from friends, or read it in EE Times or on John Blyler’s blog, that Cadence cut “at least” 625 jobs or 12% of it’s workforce.  John Blyler’s sources say the impact will be closer to 1000 jobs once contractors and others are added in.

The speculation has been going on for several weeks including an interesting exchange on the Yahoo message boards as to how deeply and in what manner Cadence would cut.  Would they take out a scalpel and trim the fat from organizations across the board?  Or would they focus on key areas with technological advantage and hatchet off areas that were non-competitive? Cadence CTO Ted Vucurevich mocked the idea that Cadence would sell off any businesses. Yet, the official press release says that Cadence “emphasized those market segments where Cadence enjoys a leadership position, such as mixed-signal design, advanced verification, and low-power design”, implying it was de-emphasizing other businesses.

So … do we have any idea if these cuts were made with a scalpel or with a hatchet? Here is what I’ve been able to pick up from others regarding what Cadence is doing to save expenses:

• From the official 8-K report: “(e) Cadence has determined that no payment shall be made to Cadence’s named executive officers or the other participants in the Cadence Senior Executive Bonus Plan for performance in fiscal 2008.” I don’t think this eliminates the golden parachute, but at least it weighs a little less.
• At least some middle management was let go, including first line managers and some long-time Cadence employees. It seems they are trying to cut the “deadwood” like any organization does now and again but from the management side first. And the impact to the rank and file seems to be less than it could have been. Still, having gone through similar times at Synopsys before, I know that a lot of these people are experienced EDA veterans and good people to have in the organization and I wish them well.
• All, or a substantial part of their tech pubs was let go. (Makes sense since they can contract this out).
• IT was hit, though not sure how deep. (Can always move their infrastructure to the cloud or outsource IT - now wouldn’t that be ironic).
• Berkeley Labs was hit hard or perhaps even shut down (who needs research?)
• Their DFT R&D group was impacted, perhaps a signal as to their plans for this product line (just a bunch of IBMers anyway).

As yet, there is no indication that entire products are going away, but it’s still early.  Cadence has yet to speak to the investment community since the Fister resignation and delaying their earnings release due to the discovery of an “accounting error”. Personally, I think it will be painful for a company that has endeavored to provide a “complete flow”, to sell off a product and create a hole in that flow.  If they do sell off products, it will be around the edges, not in the core EDA flow.

Take a look at Gary Smith’s analysis from the time that Cadence bid to take over Mentor (can you believe it’s been  just over 4 months since the offer). The tools where Cadence has low market share and are possible targets for the hatchet:

• Design for Manufacturing
• Physical Verification
• Design For Test
• Static Timing Analysis
• Synthesis

What do you think? Can you see Cadence divesting any of these products?  Or do you think there are others that might go away? Which product would you definitely not let go?

Inquiring minds want to know….

harry the ASIC guy

Since Cadence decided to disappoint us by canceling their earnings announcement and conference call at the last minute, it gives me a chance to share some other cool stuff going on.

Seth Godin released his new book Tribes: We Need You To Lead Us.  If you are a Seth Godin fan, then you’ll need to get this book.  If you don’t know who he is, then you need to get this book too. Trust me.  You can order it on Amazon, or download it on iTunes or get it for Free at Audible.com.

Thanks to Garr Reynolds at Presentation Zen for pointing out a great Slideshare presentation on the credit crisis.

Last, on the topic of Software-as-a-Service for EDA, I wanted to point out a new demo on PDTi’s SpectaReg product. The demo is a little stiff, especially the pre-written copy. I’d rather hear the developer and a user speak honestly and passionately about why this is a cool product. But the fact that Jeremy Ralph is offering this product as SaaS makes him a kindred spirit, so I’ll cut him some slack. Good vibes!

That’s all for now.

harry the ASIC guy

“My name is Mike Fister and today is the longest day of my life.”

The following DID NOT take place between 3:00 AM and 4:00 AM in the office of Cadence CEO Michael Fister. Mike has called his executive staff together for an emergency meeting. In the room are Kevin Bushby,  Jim Miller, Bill Porter and R.L. McKeithen. Mike has not slept for over 24 hours.  He’s clearly agitated, pacing back and forth, eyes darting side to side.

Mike: [Pointing to an article about 3 execs fired at Logic Vision to save cost] Did you see this? Can you believe it?

[Kevin grabs the article, glances at it, laughs, and then passes it to the others]

Kevin: Those fools! How could they not see this coming?

Bill: At least they’ll get a hefty severance package.

Jim: They’ll probably make more money now than before.

[They all laugh, except for Mike, who keeps pacing.]

R.L.: Why are we here Mike? Did you have us come in just to show us this article?

[Mike stops to gather his thoughts]

Mike: They were right!

Jim: Who was?

Mike: The board. They were right to fire those guys.  They made too much money and they didn’t do Jack. They should have fired them a long time ago.

Bill: Hey, they may have made a few mistakes, but who hasn’t?  The board is just making these guys the scapegoats for the poor execution of the rest of the company. It’s just like football … the players screw up so they fire the coach. Kinda like Al Davis firing …

Mike: You guys don’t get it, do you?

R.L. : Mike, if you’ve got something to say, then say it. I’ve got a 6:30 tee time so let’s get this moving. [Laughs]

[R.L. realizes that was not the best thing to say]

R.L: I’m sorry Mike.  What’s this all about?

Mike: It’s over.

[Long pause]

Mike: Do you guys have any idea how much money we make altogether?

[They look around but no answer]

Mike: I added it up. $26,835,304 !!! It makes me sick.

[The others looked at eachother once more, now getting concerned about Mike’s state of mind and what he might do]

Kevin: Mike. Calm down. You’re going to wrinkle your pajamas.

Mike: Do you know how many people’s jobs we could have saved? Over 100!!! Each of them with families.

R. L. : Careful Mike. Someone might think you’re a democrat. [Laughs … then catches himself again]

Mike: This watch.  [Taking off his watch] This watch could have paid for us to fix all those System Verilog bugs in our simulator. [He places the watch carefully on his desk] And my car. [Going over to and looking out the window] My car could have paid for one more SourceLink support engineer. [He takes the keys out and places them next to the watch and then walks back over to the window].

Jim: Mike …

[Mike stares out the window for what seems like an eternity, then takes a deep breath and faces the rest]

Mike: They only made one mistake.  [Silence] They fired those guys instead of having them resign. [Looking at  Jim] You were right Jim, they’ll probably make more now than they did before.

[Mike walks over to the printer to grab a sheet of paper that he had printed out earlier.  He stares at it for about 10 seconds, then looks at the group].

Mike:  Who’s with me on this?

[They look at each other, then, one at a time, they stand up and put their hands together].

R.L. : We’re with you Mike.

Mike: [A tear in his eye] I’ll miss you guys. [He turns and picks up the phone].

Mike Fister and his executive staff resigned that morning.

OK…so I made this up.  This meeting never happened … as far as I know.

It’s a shame though … cuz the part about their salaries paying for 100 jobs is true. Maybe some Cadence employees will get to keep their jobs because of these resignations. Probably not … but maybe.

harry the ASIC guy

During these last few weeks of the subprime mortgage crisis in the US, many of us have become all too familiar with the term “leverage” as it applies to those entities that used to be called investment banks.  That kind of leverage is very powerful and is also very dangerous, as we all found out.

There is a 2nd type of leverage that we engineers learned about in basic physics. As Archimedes once said, “Give me a place to stand and with a lever I will move the whole world.”

But there is 3rd type of leverage that is “the power or ability to act or to influence people, events, decisions, etc.” Some people call it ROI. I’d like to share with you three examples that recently came to my attention whereby one small EDA company in our industry is using the principles of leverage to try to “move the world”.

Productive EDA

I came across these guys through my Google Reader when the President, Jeremy Ralph, posted the following new product announcement to the OVM World blogs.  Jeremy cleverly used the power of OVM World to reach hundreds (thousands?) of potential customers.  And what did he invest? Only the time it took to write the blog post and put it up.

That’s leverage!

But wait, there’s more.  Jeremy caught my interest when he called the SpectaReg product a Web2.0 application, so I clicked to view the press release and was pleasantly surprised to see that their “products are available online, at lower cost, as a Software-as-a-Service (SaaS)”. Well, I had been fooled just last week into thinking that Cadence was completely entering the SaaS market, so I wanted to make sure. After all, as President George W. Bush once cautioned, “fool me once, shame on…shame on you…you fool me, you can’t get fooled again.” So I spoke to “President Ralph” on the phone, and indeed, this truly is a Web-based Software-as-a-Service, pay-per-use offering. Using the power of the internet and SaaS, his company is able to deploy its software to virtually any customer of any size anywhere, all from their office in Vancouver, BC.

That’s leverage!

But wait, there’s still more. I pointed Jeremy to xuropa.com, a recently launched online electronic design community and tradeshow platform, that I covered back in June and again three weeks ago. To his credit, Jeremy was already aware of Xuropa. I’m not sure where that will go, but his small EDA company would be able to reach even more potential customers worldwide and provide product training and evaluations through their online labs.

That’s leverage!

Leverage can be your friend. These new media business-to-business (B2B) strategies can enable smaller EDA companies like Productive EDA, which is exactly the type of company that I was considering when I wrote on my blog three weeks ago:

The pieces are coming together for a revolution in EDA. Like most revolutions, it is starting small, hardly noticed by the big guys on the block. In the next 5 years, it will change our industry forever by leveling the playing field, allowing smaller EDA companies to compete with larger ones, giving customers greater flexibility on how and when they access tools and which vendor’s tools they use.

Indeed, leverage can be your friend.

harry the ASIC guy

At the end of last Sunday’s Chargers-Bronco’s game, Referee Ed Hochuli blew a call that cost the San Diego Charger’s the football game.  Here’s a somewhat comical look at what happened:

Probably not so comical if you’re a Charger’s fan

Well, last week I got a chance to do some more “research” into the Cadence announcement of a SaaS offering. Although I got the substance of the call correct, in haste I also got one important detail incorrect.  (As, Mark Twain once said, “a lie can travel halfway around the world while the truth is putting on its shoes.” Today, a lie can travel around the world several hundred times while you put on your shoes).

I had inferred from the use of the term “Software-as-a-Service“, that the Hosted Design offering would include a “pay per use … pay as you go” or similar on-demand licensing model. Upon further review … this is not the case.  Here are some of the things I found out:

1. No on-demand licensing, no eDACard … only monthly granularity for licensing. If you want to scale the size of the hosted environment, several weeks lead time may be needed to obtain and configure the additional CPUs unless they are otherwise available.
2. The “flows” that are offered are the Cadence reference flows (e.g. Low-Power Design Flow), not a production flow that Cadence may or may not be developing.
3. Cadence says that it can host any third party EDA software … just license it to Cadence’s hostid.

Despite some limitations, this is still a big step. Small companies can now obtain the necessary hardware, software, and IT support to do chip design at a lower initial cost than building their own infrastructure. The VCs should like that.

But there are some limitations.  First, although the Cadence VCAD chamber provides security, it lacks the instant scalability and on-demand pricing that cloud computing would provide. Second, although reference flows are provided, it lacks a real production design environment that designers can just pick up and use.  Third, despite Cadence’s assurances that they will allow other EDA tools to be hosted, competitive tools likely will be discouraged since the ultimate objective is to further lock customers into an all Cadence tool flow.

So, the question now is … What Will Synopsys Do (W.W.S.D)?

Before that, we have to ask What “Has” Synopsys Done?  You see, Synopsys tried and then abandoned a similar idea about 7 years ago. At the time, companies were not “comfortable with the idea that their computers and data were in a remote building operated by a third party”.  But they are now (at least more than before).  At that time, Synopsys had no production design environment available to offer. They do now.

Synopsys could probably go one better and offer a superior solution if it wanted to, combining their DesignSphere infrastructure and Pilot Design Environment.  If fact, they have done this for select customers already, but not as a standard offering. There is some legwork that they’d need to do, but the real barrier is Synopsys itself. They’ve got to decide to go after this market and put together a standard offering like Cadence has.

And while they are at it, if they host it on a secure cloud to make it universally accessible and scalable, and if they offer on-demand licensing, and if they make it truly open by allowing third party tools to plug into their flow, they can own the high ground in the upcoming revolution.

What do you think?

harry the ASIC guy

Last week I predicted a Revolution in EDA. I said that “the sooner the EDA companies learn to swim with the tide, the better off they will be after the revolution”. 

Well, today Cadence just jumped into the water and started swimming. Like Michael Phelps!!! You can read the traditional Cadence marketing speak on this new offering here.

In a nutshell, Cadence has made public what it has been offering select customers for some time … hardware, software, design flow, and applications support as a Software-as-a-Service model.  Pay per use … pay as you go.

If you are a small startup that can’t afford the upfront costs for software and hardware and the part-time IT guy…

If you are a small-medium sized design services firm that wants to do turnkey design but can’t afford to keep idle software lying around in between client projects…

If you want to do place and route from your iPhone…

This may be for you.

More next week….

harry the ASIC guy

I can’t sleep at night.

This Idea has been bouncing around in my head for the past few months. I can’t shake it. If you know me, then you’ve probably heard me talk about the Idea or ask your opinion about the Idea or whether I’m crazy. I’ve been itching to blog about this Idea, but haven’t been able to figure out the right way to approach it.

Then, the other day, Ron Ploof gave me a way to approach the Idea in my blog. Please read Ron’s post on the Birth of a New Media Revolution first before continuing. It’s damn good, you’ll get something out of it, and it gives context to this post.

OK … done? Good.

Ron’s main point is that a revolution can’t happen until all the enabling pieces are in place. New media required easy-to-use publishing tools, simple syndication (i.e. media distribution), and low-cost bandwidth.  Once those were in place, new media hit the tipping point.

Well, I’m going to go out on a limb today with a prediction:

The pieces are coming together for a revolution in EDA. Like most revolutions, it is starting small, hardly noticed by the big guys on the block. In the next 5 years, it will change our industry forever by leveling the playing field, allowing smaller EDA companies to compete with larger ones, giving customers greater flexibility on how and when they access tools and which vendor’s tools they use.

It’s going to happen.  And just as with new media, there are three barriers that will need to come down before we hit that tipping point.  They are:

1. The high cost of sales, marketing, and support.
2. Licensing models that lock-in customers.
3. Lack of comprehensive standards for tool interoperability.

If you’ve been staring at the EDA horizon like I have, you’ve already seen that all of these barriers are starting to come down:

1. A week ago, a company called Xuropa launched an online tradeshow platform that could greatly reduce the cost of sales for EDA companies and enable greater access to designers to evaluate tools.
2. For several years now, Cadence has provided access to short-term licenses through their eDACard model and Synopsys will introduce a similar offering before the end of the year. Cadence also provides a service through their consulting organization called “hosted VCAD” whereby customers can access software and hardware on a Software-as-a-Service basis. How long before the other vendors follow?
3. As Karen Bartleson noted on her blog yesterday, the EDA industry has moved into an “Age of Responsiveness” with regards to tool interoperability where tools are expected to be open and inclusive.  As witnessed in the latest OVM / VMM standards war, open standards are required as the price of admission and “woe be to those” that do not heed this call.

I’m a realist. This EDA revolution is just beginning and will take some time.  It won’t happen without a fight from those who stand to lose out. But I believe that the revolution is inexorable.  And the sooner the EDA companies learn to swim with the tide, the better off they will be after the revolution.

There’s a lot more that I need to say before I can sleep at night, but too much for one post.  Stay tuned.

harry the ASIC guy

That’s the word Aart DeGeus invoked no less than 7 times to describe the business environment during Synopsys’ Q3 analyst call last week. “Some companies may do particularly well and others poorly … and the same is true in of course our market.”

Indeed, the EDA market is turbulent and there will be winners and losers.  With Mentor and Synopsys announcing earnings last Wednesday, we got a chance to peer ahead and see which skipper could steer his ship through the turbulent waters.

Mentor Graphics

Under cloak of darkness, before the sun rose in Wilsonville and before the market opened on Wall Street, Mentor announced Q2 revenue of $182.4M, exceeding Street expectations of $175M. Even though their core EDA business declined by 10% last quarter, they more than made up for it by quadrupling their business in the vertical automotive market from 5% to 20% of revenue. Mentor admits that this kind of jump is a one quarter fluke, still it looks like Mentor’s focus in this area and a developing focus in aerospace are paying off.

Mentor cited uncertainties in the economy as affecting current and future commitments. One interesting datapoint … for every $1.0M contract that was renewed last quarter, Mentor received $1.06M compared to $1.25M - $1.40M they had seen consistently in the past. This could be an aberration or it could signal that customers are reluctant to make larger or longer term commitments. As a result, Mentor has reduced expenses by cutting 150 jobs so far this year, closing offices, limiting travel and trade show participation, and even deferring replacement of PCs.

Looking forward, Mentor seem to be banking on two strategies. First is their vertical market focus in automotive and aerospace. Second, Mentor is positioning the transition to 45nm as an inflection point and an opportunity to replace existing physical design tools with their Olympus SoC solution, particularly emphasizing the need to handle multi-mode multi-corner design.

Lastly, their was no direct comment concerning the now defunct Cadence acquisition attempt. However, apparently Mentor was able to enact a golden parachute for its executives in case of takeover. They also spent and will continue to spend ~ $1M per quarter on “banking fees” associated with the Cadence offer and possibly looking at other ways to “structure” their business. Nudge, Nudge, Wink, Wink.

Mentor shares closed up 10% Wednesday.

Synopsys

In contract to Mentor, Synopsys announced it’s earning in full daylight and after the markets closed for the day. Q3 revenue was $344M compared to the market’s expectations of $340M, a healthy increase of 13% from last year. Unlike the automotive business carrying Mentor for the quarter, there was no single area that stood out for Synopsys. They signed a significant deal with National Semiconductor that includes access to Synopsys’ analog/mixed-signal and custom IC design tools (code named Orion), now in beta and scheduled for release this quarter.

As far as the turbulent environment is concerned, Synopsys is seeing mixed signals with “some customers racing forward to gain market share while others are holding back on their forward commitments”. Aart noted that in “sales situations that are heading towards closure you suddenly get two, three, four weeks more signature loops … that says typically that the approval is going up one or two levels in a company or that everything goes through the desk of the CFO”. Synopsys expects to benefit from this uncertainty as customers opt for safety, both technologically and financially. Still, they scaled back expectations for revenue growth to 6-7% in 2009.

There were also some interesting product notes. As I mentioned above, Synopsys will complete beta testing and formally introduce its AMS design tool, codenamed Orion, this quarter. Orion will plug a critical portfolio hole so that Synopsys can be a viable choice for key customers looking to consolidate all digital and analog design with a single vendor. On the place and route front, Synopsys claimed a production tapeout for their new Zroute router which implements diagonal routing and also runs multithreaded and faster than their current router.

Synopsys shares closed down 11% Thursday. Apparently, the fact that Synopsys lowered its cash flow forecast for 2009 from $325M to $320M-$325M spooked Terence Whalen of Citibank so much that he changed his recommendation for Synopsys from Buy to Sell. Hard to fathom, considering the slight amount of this change, considering that 2009 is still being planned by Synopsys, and considering Synopsys’ history of generating cash from operations.  Still, it does not take much these days I guess.

Last week, I said that I would be watching for 4 things.  So, what did I see?

1. The market uncertainty that Cadence noted is definitely affecting Mentor and Synopsys as well, so it is an industry problem, not just a Cadence problem.The waters are turbulent.
2. Little said about the Cadence acquisition.
3. Synopsys may be seeing some benefits from the uncertainly caused by the short-lived Cadence - Mentor courtship. Still, too early to tell.
4. Very little on the Synplicity acquisition except that things are going well.

For some more insight, see Gabe Moretti’s articles on Mentor and Synopsys and Sramana Mitra’s analysis.
harry the ASIC guy