( ESNUG 508 Item 6 ) -------------------------------------------- [08/16/12]
From: John Cooley <jcooley=user domain=zeroskew got calm>
Subject: Rumor is Synopsys put a bid on EVE to lock in Intel on renewal
News on street is that Intel is deep in the middle of renegotiating its
5 year all-you-can-eat-EDA-tools contract with Synopsys. Although terms
of such deals are usually super secret, at the time I deduced the entire
first 5 year 2007 Intel-Synopsys deal was worth from $720 million to
$900 million in Wiretap 070828.
That was $144 million to $180 million a year. (My gut now says the real
number was probably the higher one -- $180 million a year -- and that this
time around the new 5 year deal will easily tip $200 million a year, which
means it'll be a $1+ billion total sale.)
For a SNPS that makes $1.6 billion a year, $200 million is 13% of revenue;
some serious make-or-break money for any company!
Anyway, it's now 5 years later in 2012 and, as to be expected, Intel is
naturally playing Cadence vs. Synopsys to keep the big bid competitive.
  
While in rough terms CDNS and SNPS are "equal" for digital frontend and
backend tools (big emphasis on ROUGHLY EQUAL); the two places where SNPS
is noticably weak are in full custom P&R and HW emulation/acceleration.
To fill the full custom P&R hole, Aart recently dropped $305 million in net
cash to acquire SpringSoft for its Laker family of custom tools in order
to counter the Cadence Virtuoso offering in the Intel bid. (And as a
juicy aside, the Novas Verdi/Siloti/Certitude/ProtoLink digital debug tools
were a fun side dish for Aart's purposes here.)
Now the other shoe is dropping.
I've recently heard from certain sources a rumor that Synopsys has made a
bid to acquire EVE and its line of Zebu HW emulators in order to counter
the Cadence Paladium offering in the Intel bid.
 
EVE pulls in $60 million a year. I've heard that roughly $25 million of
that is in sales to Intel. What better way to force Intel into your arms
than by encircling them?
---- ---- ---- ---- ---- ---- ----
If this rumor is true and Aart de Geus does pick up EVE, don't be surprized
if Wally Rhines "suddenly" settles the Mentor-EVE patent lawsuits. Why?
  
When a big company sues another big company in the same business over
patents, invariably both companies' products violate each others' patents.
It opens an expensive millions-of-dollars NO WIN legal can of worms with
NO UPSIDE. In the end, they usually cross license each other patents and
the CEOs have an angry internal conversation with their company Legal
Departments along the lines of "And why the $%^# did you advise me to sue
our biggest business rival!!???"
It's like global thermonuclear war. The only way to win is to not play.
---- ---- ---- ---- ---- ---- ----
So anyway, the rumor is Synopsys has made a serious bid to acquire EVE to
help lock in Intel in the next 5 year $1+ billion Intel-SNPS contract.
- John Cooley
DeepChip.com Holliston, MA
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