( ESNUG 326 Item 1 ) ---------------------------------------------- [8/25/99]
Subject: Customers Royally Pissed About The New Synopsys "Pricing Models"
From: [ Rage Against The Machine ]
John -
Please keep me anonymous.
Your loyal readers urgently need your help. Synopsys is totally changing
their licensing business model. They have been rolling out the new model to
most customers over the last few weeks. They had already got feedback from
their biggest customers over the summer. Of course, they first solicited
feedback from Wall Street.
They are moving away from perpetual licenses and toward term-based licenses.
Of course, the prices of perpetual licenses are going up substantially and
discounts are going down! Please solicit feedback from your readers ASAP
about these new plans.
They are leaving a window until August 31, 1999 for users to purchase
licenses uder the old plan. I guess they are hoping for a large influx of
orders before the window closes.
I can't wait to read ESNUG feedback from this.
- [ Rage Against The Machine ]
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From: Curt Berg <cberg@extremenetworks.com>
Hi John,
Hope you saw that Synopsys is raising prices 20%, and no more discounts for
small guys. This basically means 40% increase, for small companies !!
My first thought: buy SUN stock! It will be a lot cheaper to upgrade
machines then buying Synoopsys tools. 2nd thought: buy Cadence and Avanti
stock, they have a good chance of getting back some market share. 3rd
thought: I'm depressed over Synopsys price tactics.
Why should the end user pay for all their dabbling with tools that end users
don't want. Synopsys puts out something like 8 compilers, when it should
have been one or two. Both Motive and Sunrise were trashed -- what a waste
of money.
I guess Synopsys is the Cisco of EDA industry.
Making $41 M profit on $207 M revenue, not bad in my mind. Anyway asking for
even more might backfire. Looking at the financials, I now understand why
Synopsys service is so bad, $75M in revenue on service, and only spent $19 M.
Soon we are going to see, just like Cisco, Aart de Geus flying around the
country, calling all their big customers, just to stay brand loyal !!
Or is this a good strategy, if I give them more money they can aquire more
companies, to provide users with better technology. But then, if they can't
develop tools themselves with 22% of their revenue, why do they spend all
that money on R&D. Well, here they are much like Cisco again, very little
has come out of their own R&D !
Sorry no more time, have to dust of my Candence and Avanti business cards,
and do some evals.
- Curt Berg, ASIC Manager
Extreme Networks
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