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07/21/08 03:52 PM
The Summer of Our Discontent: War Games in EDA Report this article as Inappropriate to us !!!Login to Reply

The Summer of Our Discontent: War Games in EDA

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07/21/08 03:52 PM
Interesting Summary, Flawed Conclusions new Report this article as Inappropriate to us !!!Login to Reply

The article started off well but fell apart in a dramatic way towards the end. You went from recapping the events (which was good) to a offering flawed opinion. This last part was very poorly done because you gave a lot of credence to only one persons point of view.
Personally I have a problem with so much quoting of "Nobody". If you use a quotes from an "industry expert" without a name being provided, then how can we gauge the persons level of knowledge.
"Nobody" states several times about how Mentor is poorly run. But over the past 8 years they have grown at CAGR that is 2x the EDA industry. They have moved from a 15% market share to 19% market share over the past 6 years. Mentor has trimmed costs and made relatively small acquisitions that have begun to add to the revenue stream. They buy companies for the technology and people, keep those products, and merge them into the Mentor world (look at OPC technologies as one example).
Cadence on the other hand is seeing revenues slip. They are losing market share as Synopsys and Mentor close in on them. They have made a number of acquisitions where the products were soon canceled or just floundered afterward. Anterim is a good example of this. At the current rates, Mentor, Synopsys, and Cadence would all be neck and neck in terms of revenue in two or three years.
The statement was made about Mentor being poorly run several times by "nobody". The goal of the companies leaders should be shareholder return. A well run company provides this.
MENT was up 55% from its 52 week low on Feb 11 prior to the CDN announcement - from $7.70 to $12.02 on June 13. The company has been on an upward trend. Sounds like a decently run company to me.
CDNS has not moved at all in the same period - $10.70 on Feb 11 to $11.52 on June 13. And with the announcement it went lower and lower - below $10 again. Tell me how CDNS is so well run compared to MENT?
Give me an example of why Cadence is a well run company and Mentor is a "country club environment" instead of just giving lame quotes from a "Nobody". Judging from the comments, I would guess that the "nobody" is Sramana Mitra who I feel is a poor judge of the EDA industry. I have read much of what he has posted on his blogs and continually finding myself shaking my head at his poor insight and unsubstantiated "expert opinion".
BTW, at today's stock prices the only "large" EDA companies that is providing a positive return over a 2 year period are MENT (22% up) and SNPS (42% up). In that period LAVA is flat (0%) and CDNS is down almost 40%.

07/22/08 09:13 AM
Re: Interesting Summary, Flawed Conclusions new [re: JeffreyT]Report this article as Inappropriate to us !!!Login to Reply

<p>I worked at Mentor for 10 years and agree that there is some truth to the "country club" atmosphere, especially in comparison to the more aggresive Silicon Valley work ethic. In those 10 years I witnessed continual cost-cutting in terms of products, groups and people that under-performed. I also saw total control given to the General Managers who ran each division as if separate companies, even to the point of doing deals and product integrations with direct competitors to the detriment of other Mentor product groups.</p>
<p>I blogged at Chip Design Magazine about the colossal error that Cadence is making with their hostile acquisition, <a href="http://www.chipdesignmag.com/payne">www.chipdesignmag.com/payne</a></p>

Daniel Payne

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