( ESNUG 509 Item 6 ) -------------------------------------------- [09/13/12]
From: John Cooley <jcooley=user domain=zeroskew not calm>
Subject: Does Michael McNamara left CDNS rumor mean a dead C-to-Silicon?
Rumor has it that after the Cadence senior staff rejected his ultimatum to
have the Cadence C-to-Silicon tools spin off into its own P&L division of
CDNS, Michael McNamara pulled a Cartman ("Screw you guys, I'm outta here!")
  
and has left Cadence. The rumor goes on that McNamara has even left EDA
altogether, instead choosing to go into the USB 2.0 IP business by joining
Hi IP Design -- which is ironically a Forte Cynthesizer customer! (Funny!)
THE BIG 3 BUNDLED DEAL CATCH-22
While some people could see Mac's ultimatum as just one man's vain attempt
to create his own petty EDA kingdom, there's a real non-ego-driven business
reason why Mac would want to do this. As GM of the CDNS C stuff, Mac wanted
to break the crippling grip Cadence Sales has on his C-to-Silicon revenues.
Let me explain.
It's an old problem when purely new technologies come from one of the Big 3.
The story typically goes Cadence buys/builds some experimental new Tool X.
For a 2 to 4 month period the massive Cadence Corporate Marketing machine
gets all fired up about Tool X with their 1,000 man Cadence Sales Department
talking it up with all customers everywhere.
The trouble with new Tool X's, is if it doesn't fix a painful problem (like
gets your kid off drugs) and instead if it offers a vague and generally
unmeasurable "positive" (like improves the *chances* your kid *might* get
admitted into Harvard), early customers won't pay good $$$ for Tool X.
The customers will play with Tool X. They might even try Tool X on a real
design. But when it comes money time, the early users won't pony up.
Which leads to the Bundled-Deal-New-Technology-Death-Spiral.
---- ---- ---- ---- ---- ---- ----
Here's the CDNS and C-to-Silicon version:
Cadence Sales gives away C-to-Silicon because nobody will pay for it.
-and-
Nobody will pay for C-to-Silicon because Cadence Sales gives it away.
That is, rather than kill the new Tool X, Cadence Sales tells the customers
"Hey, since you're buying all those Virtuoso, ADE, Conformal,
Encounter, Palladium, and Incisive licenses, plus all that VIP;
we'll just throw in C-to-Silicon (plus some of our other lesser
sold CDNS tools) for free in a big sweetheart bundled SW deal!"
These poisoned C-to-Silicon sales leaves Michael McNamara stuck servicing
some big name customers like Micronas (confirmed) and a group in Intel
(rumored) in little or no money deals.
Can you see his awkward passing-in-the-hallway conversations? "Hey, how are
you doing, Lip-bu? Me? I'm still losing money at some big customers for you
still!" (What's worse is the rumor is Intel later dropped C-to-Silicon.)
---- ---- ---- ---- ---- ---- ----
The exact same thing happens for SNPS and Synfora PICO Synphony C Compiler.
Aart buys the assets of Synfora PICO in a fire sale in 2009. SNPS renames
it to "Synphony C Compiler". Yada yada yada....
Synopsys Sales gives away Synphony C because nobody will pay for it.
-and-
Nobody will pay for Synphony C because Synopsys Sales gives it away.
These poisoned Synphony C sales leaves Bob Erickson stuck servicing big
customers like STmicroelectroncs India (confirmed) and a group in TI
(rumored) in little or no money deals.
Can you see his awkward passing-in-the-hallway conversations? "Hey, how are
you doing, Aart? Me? I'm still losing money at some big customers for you
still!" (What's worse is the rumor is TI later dropped Synphony C.)
---- ---- ---- ---- ---- ---- ----
And this all also used to happen to Mentor and Catapult C -- until Mentor
bigwig Brian Derrick completely spun off Catapult C into a wholely-owned
Calypto division of MENT with its own P&L and its own Calypto sales staff;
thus taking Catapult C off the table as a fun "freebie" Mentor Corporate
Sales could throw into any one of those sweetheart bundled SW deals.
  
Now MENT will realize the true worth that Catapult C has (or doesn't have)
because customers like Hitachi and ST will actually pay full price for it.
Smart guy, that Brian Derrick is.
---- ---- ---- ---- ---- ---- ----
And FYI -- for balance I called Brett Cline of Forte (in Asia this week),
Shawn McCloud of Calypto (board meetings all day) and Gary Smith (on
vacation I think) for their take on this rumor that Mac has left Cadence
and what it means for C-to-Silicon -- but all were unreachable.
- John Cooley
DeepChip.com Holliston, MA
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