( ESNUG 516 Item 1 ) -------------------------------------------- [12/13/12]
Subject: Brett gloats over Gary Smith's C-synthesis market data reversal
> UNHAPPY BRETT: Every time I publish these numbers, Brett Cline from Forte
> yells at me that the Mentor Catapult C guys use a different accounting
> system which skews the market share in CatC's favor. Gary Smith's numbers:
>
> 2008 ESL Synthesis Market: $29.5 million total
>
> Mentor Catapult C ############################## $15.0 (51%)
> Forte Cynthesizer ############ $5.9 (20%)
> BlueSpec ######### $4.4 (15%)
> Synfora PICO ######## $4.1 (14%)
>
> I told Gary Smith. "Although there are differences in the way Mentor does
> accounting, they've used it so long that it shouldn't cause any differences
> in market share," counters Gary. "Over time these accounting differences
> have to converge, just like how Cadence's numbers now converge. Accounting
> tweaks only work short term."
>
> - http://www.deepchip.com/items/dac10-05.html
From: [ Brett Cline of Forte DS ]
Hi, John,
Allow me to gloat. It's been quite a year and time to give you an update.
At Forte, we've been pretty focused on growing the business and have been a
bit more quiet than I'm used to. But, I'm happy to tell you that it has
paid off. In Gary Smith's latest Market Share 2012 report, Forte is #1 for
2011 ESL synthesis.
2011 ESL Synthesis Market: $28.2 million total
Forte Cynthesizer #################### $10.1 (36%)
Mentor Catapult C #################### $9.9 (35%)
BlueSpec ############# $6.5 (23%)
SNPS Synphony (Synfora) ## $1.7 (6%)
Cadence C-to-Silicon $0.0 (0%)
See that? Forte was 20% in 2008; now we're 36% -- and at 1st place! CatC
was 51% in 2008; now it's down to 35% -- and Catapult C fell to 2nd place!!!
Now, of course, the Calypto Catapult C guys will have their spin. They'll
tell you that this is just because of some change in accounting and that it
really is immaterial. The reality is that now we are both counting revenue
using the SAME REVENUE MODEL and, had Catapult been using that model years
ago, they'd have done a lot less bragging.
And, we would have been recognized as #1 long ago.
Let me explain.
Mentor (Catapult) was taking the majority 60-70% of their revenue credit in
the FIRST MONTH and then dividing up the remainder, usually around 30-40%,
over the contract life. Modern EDA accounting for time-based licenses is to
take the revenue equally over the (typically 3 year) contract life.
So, for a $1M three-year agreement, Catapult received ~$700,000 in revenue
recognition in the first month! While my Forte, and other companies like
Synopsys, use the "fully-ratable" model for time-based licenses in which
$27,700 is recognized in the first month. A 25X difference!
I can't tell you how many times I tried to explain this to Gary Smith, but
it never sank in until recently, I guess. (My job would be a lot easier if
I didn't have to spend time explaining 5th grade math to you and Gary. ;)
As I write this, I'm in Asia finalizing 2012 business and I'm expecting yet
another year of double-digit revenue growth in Cynthesizer sales, our 7th
consecutive year. We are planning to announce that Hitachi JTE has chosen
Cynthesizer as well as significant Forte expansion in Korea and the US.
(Actually,we expect the US market to make up about 25-30% of our overall
sales this year, giving us good reason to add FAEs and expand marketing
throughout 2012.)
I should point out that many of these new Forte customers were RTL users,
with a few who had been using Calypto (or is it Mentor?) Catapult C. That
is, we've been growing the ESL pie vs. eating our rivals' lunches.
As I said, it's been a busy year. And 2013 will be just as busy. As a
matter of fact, we need FAEs and design consultants in the US, Korea, and
India -- so have people call me!
- Brett Cline
Forte Design Systems Boston, MA
P.S. Oh, and did I mention that Forte Cynthesizer has #1 market share? ;)
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