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

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