Peggy Aycinena is a freelance journalist and Editor of EDA Confidential at www.aycinena.com. She can be reached at peggy at aycinena dot com.
Jasper OpEd: Atrenta, Cadence, Elmer et al
April 24th, 2014 by Peggy Aycinena
This week, Cadence announced its intention to acquire Jasper Design Automation. The news precipitated a tsunami of commentary, some of which is included in this blog: Atrenta’s Piyush Sancheti deems the move to be a good one; Cadence’s Craig Cochran and Michal Siwinski second the motion; and Elmer, whose clairvoyance regarding a Jasper acquisition was criticized by Oz Levia last fall, asks if the Cadence move is more a matter of window dressing. Finally, I offer a brief prediction regarding one possible long-term effect of this M&A.
On April 23rd, I spoke by phone with Piyush Sancheti, VP of Marketing at Atrenta. I asked if news of the acquisition had come as a surprise.
Piyush said, “For the large EDA companies, the emphasis has been on simulation and emulation verification technology, but Jasper has been a leader in Formal and Assertions based verification – a focused, successful player – and the big guys have taken notice, so the acquisition was not entirely a surprise.
“Perhaps I was surprised at the purchase price, [rumored to be] north of a 5x multiplier of earnings, although that would be in line with some of the better recent acquisitions – Denali, Apache, and Tensilica.”
I asked why the large companies have not put more emphasis on Formal.
Piyush said, “Formal as a technology has been around for 10+ years, but the problem is it’s only used by a few experts. Only a few people can write assertions. Jasper [on the other hand] has turned Formal into a more specific problem, things like power-domain planning and hardware security.
“By making Formal more specific, Jasper has made it more approachable, demystifying it by solving real-world problems. Cadence will promote [this mindset] by propagating the technology to an even bigger realm of customers.”
Is there a message of optimism in this M&A for other companies in the industry?
Piyush said, “I thoroughly believe companies can grow and have this exit. There is [still room] for innovation in EDA, particularly in the front end, although maybe not so much in the implementation space.”
Are there any downsides to the acquisition?
Piyush said, “I haven’t personally found any. Consolidation here is a good thing for Cadence and Jasper, [particularly as more] people will start to figure out how to use a technology that has been around for many years.”
[Piyush Sancheti has been at Atrenta since 2005. Previously, he served at Sequence, Sente, and Cadence.]
On April 22nd, I spoke with Michal Siwinski, VP of Product Marketing at Cadence, and Craig Cochran, VP of Corporate Marketing. Not surprisingly, both of them were quite bullish with respect to the outcome of the Jasper acquisition. I asked if the Jasper solutions are redundant with technologies Cadence already has in-house.
Craig said, “As you know I used to be the VP of Marketing at Jasper [2004 to 2008], and I know Cadence. Cadence has done well with assertion-based verification and semi-Formal [with tools like] Incisive, but Jasper has done processor-based verification and has a strong relationship with ARM.
“Cadence and Jasper have joint customers, but their approach is much more IP-oriented, so it is complementary to our sub-system development suite. The acquisition will [provide] the opportunity to double down in support of customers doing embedded processor design.”
Michal added, “As in many acquisitions, the solutions from the two companies are complementary. As we are [already] serving the same customers, this will help the customers grow.”
I asked if Formal is still in the proof-of-concept stage for many customers.
Michal said, “Verification is growing like crazy, and Formal is [part of that] and in the early [phases] of mainstream scaling. The underlying core technology for Formal is not as ubiquitous as simulation, but current verification roadblocks for system and semiconductor companies means they are all looking at everything.
“It was the same thing with high-level synthesis in the past: Yeah, it was nice to have, but not [mandatory]. Now Formal is going through that same [process] with a significant uptick in interest.”
Customers always get nervous when they hear an established vendor has been acquired. Do you anticipate problems here, I asked.
Michal said, “At this point, given the challenges they’re facing, the customers are accepting that our broader reach will absolutely help move the technology forward. [In fact], some of our leading customers have been asking for us to do this for them for some time.”
Craig added, “Yes, several of our key customers have requested to have Jasper as part of the flow.”
But do you have to buy Jasper to do that?
Michal said, “There is a certain point where, to leverage the technology, it’s more than just integrating APIs. It’s about integrating the algorithms. Knowing and working with the Jasper guys and our key customers, this will be a win-win for everyone.”
So there’s no overlap in the technology?
Michal again answered, “It’s not an overlap; the technologies are complementary.”
Does the acquisition require regulatory approval?
Craig said, “A Hart-Scott-Rodino review [by the FTC] might get triggered by the size of the acquisition, but we have no concerns because there are competitors in other EDA companies.”
So who is the competition now?
Craig said, “Both Mentor and Synopsys have Formal solutions, and some smaller companies, but I don’t think anyone is approaching Formal the way Jasper does.”
[Michal Siwinski has been at Cadence since 2003. Previously, he served at Verplex, and Mentor Graphics.]
[Craig Cochran has been at Cadence since 2012. Previously, he served at Real Intent, ChipVision, Jasper, Synopsys, Valid Logic, and GE.]
On April 21st, Elmer sent the following email:
“Regarding the Jasper Acquisition, I won’t say I told you so – not that it was too hard to predict – but this move by Cadence is interesting. Twice recently, Cadence has bought technology even when they have good, or at least reasonable, comparable tools internally. So [with this acquisition] are they just buying market perception?”
[Elmer is a long-time thought leader in EDA, with a proven track record of clairvoyance: Jasper DA: What the Future Holds]
In my opinion: As with many acquisitions, there is a larger possible impact then simply the merging of two technologies; it has to do with human resources. Jasper to Cadence brings a strong team into the larger organization. In particular, Jasper CEO Kathryn Kranen will arrive with a proven track record of leadership and technical optimism for EDA and the larger customer base.
The current Executive Team at Cadence is rich with talent, but the leadership in verification is entrusted to Charlie Huang, who is also tasked with overseeing World Wide Field Operations. If Kranen were to step into the role of overseeing verification technologies within Cadence, and Huang were to step into the role of CEO – should current CEO Lip-Bu Tan return to full-time management of his venture capital involvements, which are vast – it’s a plausible scenario that we might see Kranen arrive on the roster of the Executive Team.
[Kathryn Kranen has been at Jasper since 2003. Previously, she served at Verisity Design as CEO, and at Quickturn, Daisy Systems, and Rockwell. Currently, Kranen is Chairman of the EDA Consortium.]
EDA, like the games of Chess and Life, can be full of surprises.
Tags: Apache, ARM, Atrenta, Cadence Design Systems, Charlie Huang, ChipVision, Craig Cochran, Daisy Systems, Denali, EDAC, GE, Kathryn Kranen, Mentor Graphics, Michal Siwinski, Piyush Sancheti, Quickturn, Real Intent, Sente, Sequence, Synopsys, Tensilica, Valid Logic, Verisity