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\ - / INDUSTRY GADFLY: "the untold Gary Smith backstory"
_] [_
by John Cooley
Holliston Poor Farm, P.O. Box 6222, Holliston, MA 01746-6222
After had I heard that Gartner-Dataquest had cut its entire EDA stats team,
I thought it would be a good deed to email all the EDA vendors on my ESNUG
mailing list to gather together quotes for a giant "thank you" column to
Gary Smith and his team. That was last Friday.
Little did I know I was walking into a story.
Within that first wave of replies, I had emails from Mentor, Magma, Apache,
Synplicity, Sequence, CoWare, Sierra, Zenasis, Averant, Denali, Bluespec,
Forte, Vast, Pulsic, Jasper. And these were CEOs, Chairmen, VPs, bigwigs.
Gary sure has many friends in high places! But what caught my eye was who
wasn't there: all the Cadence and Synopsys executives were amazingly absent.
First off, I checked my mailing list. At my last count in January 2006, I
gots me 1,238 Synopsys and 772 Cadence employees subscribed to ESNUG. It's
NOT as if no one from Cadence nor Synopsys knew I was collecting all these
Gary "thank you's". Not hardly. They knew 1,238 + 772 = 2,010 times!
I hit the phones and did some snooping. I found out that it was common
knowledge in the industry that both Cadence and Synopsys had cut off their
funding to Gary's Gartner group. What was colorful were all the unconfirmed
rumors and unsubstantiated theories at to why:
- Cadence was pissed at Gary for his letter warning of "personnel
problems and arrogance" after Cadence's recent DAC pullout.
"Pushing away the community which keeps you alive is not a good
idea for Cadence."
- Gary Smith of Gartner (08/04/06)
http://www.deepchip.com/wiretap/060804.html
- Synopsys and Cadence were both furious at Gary's comments which
supported Magma in the last SNUG Census.
"We see Magma picking up more users seats in the customer
accounts. Cadence and Synopsys aren't being completely
replaced, though, they're just losing individual seats to
Rajeev. I've seen cases where they've gone 90% Magma seats
with the remaining 10% stay Synopsys seats."
"On that small 3% 'switch away' rate you found for Magma, the
engineers who use Magma tools love them. The only reason
why they'd stop using Magma is because a Pointy Haired Boss
forced them to switch back. You can layout a design in
considerably less time using Magma compared to Synopsys or
Cadence. It's a quicker design flow."
- Gary Smith of Gartner (12/20/05)
http://www.deepchip.com/items/snug05-13.html
- Cadence and Synopsys were both angry at how Gary put Magma into odd
categories that favored Magma in his annual Market Trends report.
"Magma has won the IC implementation competition the easy
way: Cadence and Synopsys quit playing."
- Gary Smith in his Market Trends 2005 report
Or that Gary was going to say something in the next MT report
that was going to make Synopsys and/or Cadence look bad.
What feeds these 2 particular rumors is that the Market Trends
reports come out in November. The Gartner cuts timed to Oct. 31
means that the new Market Trends 2006 report will never come out.
- Or the new Intel-go-it-alone Cadence decided to staff its own
internal industry research and Synopsys is following suit. This
way you can control 100% of what data (if any) goes public plus
you have no loose cannon Gary messing up your marketing pitches.
Again, these are all unsubstantiated rumors and idle theories. No Cadence
nor Synopsys executives were consulted on this column -- and even Gary
himself says he can't talk until Nov. 1st. The Gartner PR people came down
hard on him for Goering's & Santarini's articles about the cuts.
Anyway, here's 42 of the 87 letters I got. It's an interesting mix. You'll
find letters about:
- Gary as the "Pope" of EDA, where start-ups and new tools need
his blessing if they're to succeed.
- Comments on how the Gartner analyst business model doesn't work.
- Criticisms of Gary's obsession with ESL and DFM to the exclusion of
other types of EDA tools.
- Praise & criticisms of Gary's market share numbers.
- Why FPGAs have 6 analysts while EDA now has 0.
- a passing reference to Ron Collett, the analyst who predicted that
VHDL was going to wipe out Verilog.
- How having no Gary is going to adversely effect EDA start-ups.
- Gary's private joke sharing mail list.
- And even concerns about me and DeepChip now that Gary's gone.
But the two big trends in the comments were: people bummed that Gary & Daya
were cut -- and how it's bad news that EDA now doesn't even have 1 remaining
independent analyst left covering the business. Many of them seem to have a
fairly bleak view of EDA as a business. I can't tell if this is just some
everyday human nature venting about work or a sign of something real.
"First let me voice my sincere thanks to Gary and his team for their
dedication and hard work for the last 15 years (as long as I have
been in the industry). Gary and Dataquest was the source I counted
on for EDA market data and trends. It is a huge loss for EDA. More
so for startups, since Dataquest reports and data is what we rely on.
The big EDA guys will spin market data and there will be no fallback
independent view.
While we provide the must-have tools for the $250 billion IC industry,
EDA is finding it hard to move beyond $4 billion. Says a lot about
the leadership of the big guys in EDA resulting in the lack of
importance we receive from Wall Street."
- Jay Roy, Chairman & CTO of Zenasis
"It's another slap in the face of the EDA industry. It's a shame that
our little 4 billion dollar industry enables a multi-trillion dollar
industry and has no clout. Users don't realize how valuable the EDA
companies really are - one day they will need us and we won't be there."
- Chuck Reynolds, Founder of Technical Systems Integrators, Inc.
"While meeting with a financial institution last week, one of the
bankers actually pulled out a market statistics compiled by Gary's
team. Which data should any banker trust after Gary's departure?
I think having the last analyst leaving EDA is bad news for IPOs.
There haven't been any EDA IPOs since 2001. This is definitely
bad. There's no financial excitement in EDA."
- Andrew Yang, Chairman & CEO of Apache
"In terms of Gartner's decision, the EDA business model has been
misunderstood by many, and remains challenging, but that doesn't mean
the continuing opportunities in it should be underestimated. EDA is
the Rodney Dangerfield of high tech. "We don't get no respect!"
- Vic Kulkarni, CEO of Sequence
"Quel bummer! Gary and his group have provided an invaluable service to
the EDA industry and its customers. They leave a huge void."
- Shiv Tasker, CEO of Bluespec
"This is not good news. We will have no benchmark to measure against
anymore. That means 'he who spins wins' even more than usual!"
- Jeremy Birch, CTO of Pulsic
"I'd like to thank Gary, Daya, and the Dataquest team. They provided
strong research, and an excellent filter function on the industry.
Gary will be sorely missed; now the chances of companies making their
own unchallenged predictions about the future of the industry have just
increased significantly."
- Alan Naumann, President & CEO of CoWare
"I never rated Gary Smith highly anyway. I am suprised he lasted this
long. EDA is a small specialty market with limited growth, dominated
cyclically by two players based on startup acquisition success because
they have crap internal R&D teams who struggle to solve customer
problems because 99 percent of them have never taped out a chip in
their lives and often fail to grasp the big picture issues.
Overall the EDA software quality is low, modern software development
practices don't exist, modern operating system support is virtually
non-existent, egos are pathetically high and the same people keep
being recycled between companies so the same old stuff with the wrong
architecture keeps getting churned out with different names and
different packaging.
It's the customers who have the answers and direct the corporate EDA
R&D guys to code what they need, but it takes too long, costs way too much
based on the fat margins and when it does appear has often been mutated
by both engineering and product marketing into something completely
different and often unusable."
- [ An Anon EDA Vendor ]
"I was shocked to hear about Gartner's recent action to axe its EDA unit.
It will especially be tough for all the young companies as Gary was the
only analyst who had covered the start-ups in addition to the big guys.
Gary's industry trends, market share report, & the DAC What-To-See list
have become synonymous with the man himself and will be sorely missed."
- Pravin Madhani, President & CEO of Sierra
"Thanks for sending out the word on this. I have developed a lot of
respect for Gary over the years. It's too bad Gartner feels they have
to do this. Hopefully Gary and team find a new home soon; we need
them in the industry."
- Larry Lapides, VP of Sales at Averant
"Our EDA industry benefits from having a strong community of industry and
financial analysts following us. These analysts not only communicate
the value we provide the electronics industry but with their insight and
ocassional criticism help shape it. Gartner/Dataquest had the top team
of industry analysts, led by Gary Smith, and supported by Daya Nadamuni,
Laurie Balch, Sharon Tan, and Nancy Wu. I understand Gary is looking
for a place to move the entire team so they can continue their work.
They can count on Mentor's support wherever that happens to be.
- Greg Hinckley, President of Mentor Graphics
"Just at a time when we need more industry analysts, we loose our only
industry analyst -- very disappointing. It's going to be interesting
to what happens to VC and public investments in EDA without a credible
and independent analyst.
Gary's 'EDA Trends' presentation at DAC Sunday provided that broad
view of the market that we all used to chart and adjust our courses.
I'm definately going to miss this service."
- Sanjay Srivastava, CEO of Denali
"The problem is, Gartner gave away its good stuff for free. I will
miss Gary Smith's "big picture" view of EDA; especially his annual
EDA Landscape categorizing all the vendors. Their in-depth research
focused mostly on ESL and DFM, which wasn't our interest. Obviously,
it wouldn't be cost-effective to do custom research on zillions of
EDA segments at $5K a pop. Gary's insights are great. He deserves
a better business model."
- Kathryn Kranen, President & CEO of Jasper
"To be honest, I never bought any of Gary's reports because it was
generally stuff I already knew. What I did buy from Gartner were
their semiconductor reports because we wanted to keep abreast of
what was going on there. The benefit I had with Gary was that the
press talked with him. He was an independent objective third party.
If Gary saw value in your company claims, he became a valuable ally
in talking to the press. If he disagreed with us, we wouldn't come
out with that product -- we'd rethink our position."
- John Murphy, CEO of Athena Design
"For new EDA and semiconductor IP (SIP) vendors, it always was imperative
to see Gary first, get his blessing (some might bring up the image of
kissing the EDA pope's ring) before seeing the press. Gary and his
group served as an industry barometer for the potential success of
startups in EDA.
Not that he always called it right. I remember one year, at one of the
conference in the early 1990s, when Gary sagely predicted that the
then-nascent SIP industry would disappear in several years. At the
next year's conference, he held up a T-shirt with his exact quote
emblazoned across the front to kick off his talk and basically said that
he might have been a tad premature. And I suspect a lot of people are
still waiting for his long-predicted ESL promise to bear fruit here
in the US.
EDA, especially, needs an independent voice that can cut through the
industry's insular, myopic vision of itself, and articulately paint a
picture of where EDA needs to head for ongoing, sustained growth."
- Ed Lee of Lee PR
"Gary has been a stalwart in our industry for over a decade... people
agree with him or disagree with him, depending on the topic, but either
way, he is quoted constantly. A friend of mine affectionately called
him 'the pope', telling clients that getting Gary's blessing was part
of their initiation into EDA."
- Gloria Nichols of Launch'm PR
"Unfortunately, EDA has lost a number of its original analysts -- Wall
Street types and now Gartner. I hope Gary resurfaces somewhere else in
a similar capacity. Our industry has benefited from having someone with
such longevity offer his perspective. Visiting Gary was required before
any product launch. I look forward to continuing that tradition
wherever he ends up."
- Rajeev Madhavan, Chairman & CEO of Magma
"There's a new team of analysts looking at a subset of the EDA market.
VDC has been covering the embedded software marketplace quite well for
some time and are preparing a first report on ESL. They're doing a
good job, and may be interested in extending to the whole EDA range."
- Vincent Perrier, Co-Founder of CoFluent Design
"Thanks to Gary and his team for so many years of service. I am sure
we will hear Gary's 'voice' again soon. In the meantime, maybe he
will lend me his bullhorn to keep up the volume regarding ESL... :)
At $10K we couldn't afford to buy Gary's annual report. It's too
much for a start-up to pay. Another company, VDC, just asked me
for my ESL data and now they want me to pay them $8K to get the same
data back! This doesn't work for us."
- Brett Cline, VP of Marketing at Forte
"Concerning his market share numbers, we'd look at the MSS numbers
and not Gary's. We liked the anon methodology MSS uses (anon
contribution). That way we accurately knew the total market and
our share of it. With Gary's way, he would change our numbers;
so we didn't trust his methodology overall. We knew he was trying
to correct the data. This is why the MSS service was started, we
didn't trust Gary's numbers.
Another thing that frustrated us with Gary was that all he wanted
to do was talk about ESL. We're not ESL. To us he appeared out
of touch with our customer problems because we're not ESL."
- [ An Anon EDA Vendor ]
"Don't worry about forecasting history ala market share. EDAC will do
that, but losing Gary & his group basically says the EDA industry and
demand for such services is not warranted -- that sucks!
I've got to get out of EDA...
- [ An Anon EDA Vendor ]
"Earlier Santarini mentioned a comparison to the FPGA industry that has
6 analysts covering it; a big difference between the EDA customers and
the FPGA customers is that there are far fewer 10% customers and far
more 1% customers for the FPGA industry than in EDA. This makes market
statistics more valuable to the FPGA manufacturers."
- [ An Anon EDA Vendor ]
"The whole thing stems from a sad truth. Look at this from Gartner's
side: in the beginning, they expected EDA to be an industry, with lots
of public companies willing to pay for research. It didn't turn out
that way. Counting the 3 big guys, we're talking about 3 one billion
dollar companies and a bunch of smaller firms wanting to get 2 solid
customers each so a handful of friends can sell these customers to
each other. I read on the site how now everyone will say they have
99-percent of the market. Come on, 99-percent of what market? Three
billion -- or even six billion -- does not make an industry, or much
of a market. Given the EDA business' ecosystem, it's not surprising
that no one wants to pay for research.
- Jeff Feldman of New Ideas in Communications PR
"I have been a PR person in the EDA industry for more than 10 years. I
think it is unfortunate that EDA companies did not want to pay Gartner
for analysis, making it a losing venture for Gartner. It is like PR
and advertising -- everyone wants PR but no one wants to pay for the
advertising to support the publications. Do they assume other
companies will cover the costs so they don't have to?
As we see EDA publications disappearing or laying off great reporters,
and now with the disappearance of the only objective source of market
data that the industry had, we are looking at a whole new landscape."
- [ An Anon PR Person ]
"The EDA industry doesn't really seem to be growing at an attractive
pace, or increasing profitability. Every time it looks like it can
grow, the Big 3 leave money on the table with "Uber-deals" to shut
out newcomers (or more often, each other). This forces the smaller
companies to either stagnate off the big radar, or aim for being
acquired before they run out of funding. We are an industry selling
products that have an incremental cost (at the point of sale) of zero,
so it's easy for lazy EDA management to cave on price. Be it the most
amazing and valuable tool in the world that will save a customer
millions, or the most uncompetitive P.O.S. ever seen this side of a
freshman's "Hello World" program, they all get lumped into "Uber-deals"
and given away with massive discounts. Add the existence of a
relatively finite (and essentially very small) world-wide demand for
EDA products overall, and you end up with an industry that just doesn't
really seem to be able to go anywhere.
As for the FPGA industry? At least they can't give away their silicon
for free in large production quantities, and completely trash their own
market from within!"
- [ An Anon EDA Vendor ]
"I am deeply troubled to hear about Gartner's decision to cut the EDA
stats team. The EDA community needs to see the writing on the wall.
At 4 or 5 billion in annual revenue (and its "average" growth rate),
it is not big enough to be a standalone industry. I hope the CEOs
at Cadence, Synopsys, Mentor and Magma have a Plan B.
When I started my first company, DualSoft, I remember sending out notes
to all the analysts covering DAC that year (1999). Gary stopped by
the booth!! I am not sure he remembers, but this is a memory I have
tucked away along with other fond memories I have collected over the
years. He is always very helpful with advice, and very knowledgeable.
Still, what impresses me most is that he is such a nice person."
- Sashi Obilisetty, President & CEO of VeriEZ
"This move shows that the EDA industry is either not large enough to
merit continued coverage by a large analyst group or that Gartner
wasn't making enough money on it.
The former ignores the critical position of EDA in the semiconductor
supply chain, while the latter looks like a business opportunity for
these ex-Gartner EDA stats group to continue as independents; without
the big company overhead."
- Bill Murray, EDA consultant
"Gary Smith and Daya Nadamuni have been strong, rational and pragmatic
voices for the EDA, ESL and embedded tools industries. I have always
enjoyed talking to Gary and Daya and hope they and their staffs find
new, equally important roles. Thanks Gary! Thanks Daya!"
- David Pellerin, CTO of Impulse
"The EDA industry has been losing credibility for years in all arenas.
VCs, except for those emotionally connected to it, are walking away.
Wall Street pays little attention, and now the press is dividing it's
time between EDA and other beats. EDA is on its way to becoming an
anonymous subset of the semiconductor industry or even the semi
equipment industry. Valuations will plummet and no one will believe
any investment pitch. I notice however, that the IP analysis is still
alive. That means it will be the voice of EDA unless someone picks up
the slack. Hope the EDA guys have good relationships with the FPGA
and IP companies because that's the only place to get market info now.
- Lou Covey of VitalCom PR
"I feel bad, because I think neutral numbers always gave us an idea how
the products we are supporting are doing in the market.
I believe for the over-all EDA market also this is a bad news, simply
because this means the market per say doesn't care too much about EDA."
- [ An Anon EDA Vendor ]
"It was shocking. They didn't lay off 1 or 2 persons, instead of the
whole team? This means nobody cares that much about EDA except chip
designers."
- [ An Anon EDA Vendor ]
"I have never understood EDA. I don't understand the market and I don't
understand the business. An engineer chooses an EDA product in the
ASIC market on the basis of 'it sucks less than the other products'.
Synopsys dominates the market in ASIC synthesis with a 90% share. This
is commonly referred (pejoratively) to as a 'monopoly'. The best EDA
companies, such as Synplicity, compete against the free stuff that the
FPGA companies provide. Tools are often so expensive to create that
nobody is willing to pay for the results. Companies with products and
technologies that simply do not work are heavily funded and even more
heavily marketed (aka Celoxica). Synopsys solves competitive problems
by hiring battalions of lawyers, and the problems lawyers can't solve
are handled by acquisition. The CEO of Cadence seems more interested
in his brand of shoes than his company, and, to his detriment, still
hasn't figured out who you are. The sales load at the big EDA firms
is 40% or more of revenue.
I suspect, in Gary's case, there simply is not enough revenue for the
reports. With ASIC starts dropping like Rosie O'Donnell's popularity,
nothing is left to research. At least Ron Collett was fun, but only
because he was always wrong."
- [ An Anon FPGA Vendor ]
"I don't think this is a death knell for EDA. It was a business decision
by Gartner -- not enough people in the EDA community are willing to pay
for the services of industry analysts. From what I've heard about other
industries, the analyst business model can be a real scam. It hasn't
been like that in EDA, which I see as a sign of intelligence in EDA.
I hope Gary can keep the team together and find a business model that
works. They are a valuable resource for EDA."
- [ An Anon EDA Vendor ]
"I am dumbfounded that Gary & team are disappearing from the EDA
landscape. Let's face it... EDA is not too terribly large of an
industry. Any 'somewhat balanced' perspective of the successes and
failures of EDA investment come only from third party analysis. Our
business that is notoriously 'closed' (non transparent) to it's
investors where the details of product success are hidden in large
product portfolios of the 'consolidated' primary EDA corporations.
Did Cadence make most of their Revenue from PCB or IC tools? Where
is Mentor's future revenue stream coming from? The EDA companies
play games (perfectly legal) with revenue allocations to insure a
particular market (or markets) dominance. I will not say that Gary's
efforts created a transparent business for investors but it did
create checks and balances that forced reputable companies to keep
their allocations strongly aligned with actual product orders.
When I look at Gary's efforts over the years I see a man (and team)
who have helped shape and mature an industry. Without Gary, I wonder
if investors would have realized the potential of companies like
Magma or even Synopsys?"
- [ An Anon EDA Vendor ]
"It is sad to to hear this news. Gary was the one person who would
NOT misrepresent EDA facts. EDA has never spoken to the imagination
of the analysts. Until it does, this is one of the consequences."
- Hein van der Wildt, President & CEO Fenix DA
"This shows that
a) either EDA is reducing as a business proposition
b) the industry is saturating and there is very few new
things to write about either technically or financially
It is true that the industry has saturated at around 4 billion and
people are resigned to it."
- [ An Anon EDA Vendor ]
"I am so disappointed to hear this. Sometimes I have difficulties
agreeing 100% with Gary's articles, but most of the cases he's
useful and helps us to become of aware new technologies and trends.
Most important point is Gary's more neutral than you, John-san. :)
- Koji Iwagami of Mentor Graphics Japan
"The scariest thought I had: Does this mean, John, your 'EDA Censes'
stats will be the only published 'market share' numbers available
for EDA??"
- Gloria Nichols of Launch'm PR
"Gary never followed us closely because were not ESL and too small. We
found it was more important to get our customers writing into your
DeepChip newsletter than talking to Gary."
- [ An Anon EDA Vendor ]
"What's replacing Gartner? DeepChip, and blogs. An EDA company makes
an outrageous claim? Within hours actual users will refute such claims
on blogs, emails to DeepChip and the bragger is called to account. A
major customer changes suppliers, the news is out in days. A new tool
is crap, in spite of the NDAs enough "Call Me Anonymous" engineers
report their experience. The services that you provide freely via
DeepChip compete directly with Gartner. Information zips around much
more freely than before; yet someone has to aggregate it, qualify it,
filter it and make sense of it, but it is pretty clear that the Gartner
business model has reached the end of its life."
- Steve DiBartolomeo, President of ACS
"It's not the end of the world. We will miss his market share stats,
but there was not much focus on our business. Maybe a smaller company
will see the share data as an opportunity. A question: who's going
to fill the Sunday night slot at DAC?"
- Gary Meyers, President and CEO, Synplicity, Inc.
"When I started selling EDA tools in '84, my grandfather asked me what
I did and I explained. He asked me to clarify if I really delivered
a tape worth a few dollars and the customer paid $150,000 for it. 'So,
you are in the Mafia', my father concluded."
- Mo Casas of Inregion
"Gary is a great guy, who happens to run the best joke email list in the
industry, plays the blues, all while being a new father. I always look
forward to hearing from him. I'm confident that Dataquest's loss will
be someone else's gain, and that he'll be back in business before long.
We're looking forward to seeing where he decides to set up shop next,
and working with him there."
- Wally Rhines, Chairman & CEO of Mentor
---- ---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ---- ----
(Follow-up) When I did that email blast for the Gary Smith "thank you" to
all the EDA vendors at 12:30 last Friday, California time:
1.) I specifically said: "Please don't dawdle; reply ASAP so I can
get your comments added ASAP."
2.) Here's the timetable of the 87 responses I got:
Friday 42 responses
Saturday 14 responses
Sunday 4 responses
Monday 27 responses
Tuesday 0 responses <-- time to write the column!
So at 2:00 on Tuesday afternoon I gathered all the responses up and my
column was done by 4:30. I then took a shower, had dinner, and went to
play cards that night with friends.
The next morning I woke up to find that at 8:30 on Tuesday night (4 hours
after my column was done) this Cadence PR guy had written me.
"Cadence has had a longstanding relationship with Dataquest and we
were quite surprised about their decision. We have enjoyed working
with Gary, Daya, Nancy, Laurie and Sharon and would like to wish them
the very best in whatever they choose to do next in their careers."
- Adolph Hunter, Director of Cadence PR
So to be fair, I'm adding this quote to the story after the fact. I'm not
sure what to think of it since Adolph is not a Cadence executive (he's not
on their estaff listing) but as a PR guy he does write for his execs many
times. And I find it curious that it took them 5 days to respond. - John
-----
John Cooley runs the E-mail Synopsys Users Group (ESNUG), is a
contract ASIC designer, and loves hearing from engineers at
or (508) 429-4357.
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