( ESNUG 489 Item 4 ) -------------------------------------------- [03/11/11]
Subject: 51% of MENT rivals also want Wally's MENT left alone
DUOPOLY FEARS: To my surprise, a good number of MENT rivals also shared the
user's same concerns about the EDA industry consolidating into a very scary
SNPS-CDNS duopoly; but these rivals are not united -- a smaller number of
MENT rivals were excited about MENT's break-up helping "eliminate today's
ridiculous price war" so that a SNPS-CDNS duopoly "can demand real money
for the value EDA brings to the semiconductor industry."
In a CNBC interview on Tuesday, Carl Icahn said that Mentor Graphics
"should be acquired, or at the very least, be put up for sale." The
NY Times reports that Icahn owns 14.7% of the company and he plans
to nominate at least 3 new directors to the Mentor board next week.
In my opinion, the EDA industry and the EDA user community will
be better off overall if (CHOOSE ONE):
A. Mentor is acquired, presumably by Synopsys or Cadence.
: ############# 26% - acquired by SNPS or CDNS
: # 2% - acquired by Magma
B. Mentor sells off or closes its less profitable product lines.
: ########### 21%
C. Mentor is left alone to run as it has before.
: ########################## 51%
Comments? What's your reasoning for your choice?
Of 43 rivals in this survey, 27 commented in some way on this question.
---- ---- ---- ---- ---- ---- ----
C. Mentor is left alone to run as it has before.
Yes, Mentor has some less profitable product lines, such as PCB layout,
and those could be spun out, but I think they are choosing some good
areas to move into and I don't see any reason to force their hand.
More importantly, I think there has been too much consolidation in EDA
among the top 4 vendors. Too much consolidation results in a lack of
focus and commodity products which don't command decent ASPs, and this
hurts the industry.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
A little competition is healthy for the industry. Carl Icahn is a
corporate raider, not an EDA executive. Look what he did to TWA!
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
I feel they do a good job for what they do and two big EDA vendors is too
little. If they get acquired I hope it is SNPS. I dont want them to die
under Cadence.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
From my perspective, it's good to have competition in the marketplace.
It keeps everyone reasonably honest, and makes us continue to try and
improve our products.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
Competition is always better for the end users - better product, better
prices and better support.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
Selling or breaking up Mentor is surely bad for EDA users. EDA companies
are primarily engineers -- even the management. These people want to
solve customer problems first, and hopefully make a reasonable profit
doing so. Wall Street wants profits only, and they don't give a darn
about solving technical problems. It's ironic that Icahn calls this
passion for helping engineers solve problems a "country club" mentality.
Almost anytime an EDA vendor is lost, it is a net loss for the industry.
- Mark Chadwick of TSSI
C. Mentor is left alone to run as it has before.
The EDA market needs multiple competitors to stay healthy. Mentor is
number 3 in a fairly large field of companies. Leave them alone. The
market will decide their fate.
- [ An Anon EDA Vendor ]
C. Let the free-market dynamics drive Mentor's fate. Icahn, Soros, et al.
should not dictate Mentor's business strategy for their own selfish
profit. If they don't like the way Wally is running the business, they
should invest into other companies they feel are on the right track.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
By far it is better to have more competitors in the market then only 2,
especially seeing what Cadence is doing right now dumping prices and
giving their tools away in order to keep market share. The only way for
Cadence to survive might be if they take over Mentor so that they do not
have to continue this ridiculous pricing strategy.
Only having 2 companies is harmful for users, can lead to price collusion
and lowers the bargaining power of EDA start-ups that seek to be acquired
by reducing the number of companies that can take then over.
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines.
Unless they can show the derivative effects from keeping non-profit
products, then they should dissolve them.
There is no value to the EDA community by having Synopsys or Cadence
have a larger/monopolistic market share. Synopsys has a real history
of buying superior products and doubling prices,. ie; Motive. How
does that serve the community?
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines.
The EDA industry has already had a lot of consolidation, and any more
will impair innovation and new ideas. The worst that could happen would
be if Mentor were acquired by Synopsys or Cadence.
- [ An Anon EDA Vendor ]
C. Leave 'em alone
Their history shows a consistent track record of progressively building a
business by carrying customers with them despite the uber-bullshit world
of EDA today. Their employee retention is good and morale has always
appeared positive. I would also wager that MENT would top polls for
customer satisfaction given their attitudes. All these are signs of a
good management running a well oiled and maintained machine that has
a lot of life in it yet.
- [ An Anon EDA Vendor ]
C. Leave them alone, and let them finally fix themselves. Outsiders
are a disaster.
- [ An Anon EDA Vendor ]
C. Mentor is left alone to run as it has before.
Presumably they would sell off / shut down loser product lines if
the management sees fit.
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines.
We need more companies in the space.
- Chuck Reynolds of TSI EDA, Inc.
A. Mentor is acquired, presumably by Synopsys or Cadence.
Mentor and Magma could become a larger entity by joining forces. There
are some overlaps, but in general the combined strengths of the two
companies would provide value to their respective customers.
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines.
I think Mentor needs to have a top management shuffle across the board
in operational management and BoD level directors as being prescribed.
In addition, I think an infusion of cash needs to be added to acquire
several smaller EDA companies and grow/broaden the technology roadmap
and aggressively chase Cadence and SNPS.
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines. xxxxx
Icahn is right, break it up and sell the parts...
QuestaSim/0-in/Eldo to Magma
Board/Auto/System to Synopsys
Calibre & sisters to Cadence/Synopsys (Best price)
Toss the FPGA (no money) & HDL (no market) on the fire
- [ An Anon EDA Vendor ]
A. Mentor is acquired, presumably by Synopsys or Cadence.
How about D. Mentor merges with or acquires Magma - I am surprised this
was not included? They then sell off or close redundant product lines
picking the best-in-class from the overlap, streamline sales, operations
and support, and make some real progress integrating to provide a full
RTL-to-GDSII solution with some best-in-class point solutions.
Mentor's acquisition by Cadence, given past history, would be a death
knell for most of Mentor's product lines. Cadence would stifle and drive
it into the ground as it has most (all?) of its other acquisitions.
A Synopsys acquisition would make more sense than Cadence, although there
is significant overlap and the overriding motivation for Synopsys would
be to eliminate a competitor. Even if Cadence and Synopsys divied up
Mentor's revenue it would still mean a substantial increase in revenue
and customer base for Synopsys. Chances are, given Cadence's recent
state of total incompetence both from product and management perspective,
Synopsys would stand to make much larger gains.
- [ An Anon EDA Vendor ]
A. Mentor is acquired, presumably by Synopsys or Cadence.
EDA as a whole can't support three different offerings of solution to the
same problem, causing too much overhead and too thin a profit to support
true innovation and to solve looming new problems. However, I don't see
CDNS or SNPS will actually buy MENT in the short term.
- [ An Anon EDA Vendor ]
A. Mentor is acquired, presumably by Synopsys or Cadence.
I think Mentor should be sold to Cadence. Right now, consolidation is
good for the EDA industry and even better when it is down to one dominate
vendor. Then, it would eliminate today's ridiculous price war and can
demand real money for the value EDA brings to the semiconductor industry.
Comparing the CEO and executive team at Cadence vs. Mentor, Mentor's is
far superior in term of experience, track-record, stability, and so-on.
I can see Wally and his crew running the combined company over Lip-bu
(he would go back to being a VC), so management wins.
Finally, as we would expect, cuts will follow after a merger. It should
be heavier on the Cadence side, so the Mentor employees win.
- [ An Anon EDA Vendor ]
A. Mentor is acquired, presumably by Synopsys or Cadence.
All 3 big EDA vendors have not only NOT created new value, but destroyed
the value in EDA, through a totally asinine pricing system and refusing
to pay up for start-ups (which would foster innovation and new products).
Which other segment provides 95+% discounts? They do this while the exec
staff (dinsoaurs all) make huge amounts of money through RSUs.
Of course the management teams of Cadence and Synopsys would need to
replaced as well. And Magma acquired as well.
No one wants to fund an EDA start-ups, so the ASIC vendors are starting
to suffer due to lack of innovation. Look at Cisco, Oracle, Google; they
all acquire start-ups at hefty premiums. However the management of all
the EDA companies are so myopic they can't stand anyone else being
succcessful. NONE of them have innovated in the last 10 years!
- [ An Anon EDA Vendor ]
B. Mentor sells off or closes its less profitable product lines.
MENT should be bought out, restructured, torn apart and rebuilt.
They have pockets of great technology, but clearly don't know how to run
it as a profitable business. Their infrastructure/cost of sales is
bloated relative to their peers, and they have done nothing about it.
They need to decide what kind of company they want to be when they
grow up. EG., if they truly want to grow in Embedded, what is their
strategy? LINUX? At least 2 other companies have failed to make
money in embedded LINUX, what are they going to do differently? Mentor
has been plagued with half baked acquisition strategies - and they have
done poorly with the ones they have acquired. IKOS was an industry
leader until MENT acquired them - they were then eclipsed by CDNS when
MENT messed around with the formula that made IKOS successful.
- [ An Anon EDA Vendor ]
They should make Ivan Pesic the CEO and he will straighten the place out.
- [ An Anon EDA Vendor ]
A. Mentor is acquired, presumably by Synopsys or Cadence.
Should have specific product lines acquired by TSMC/UMC/GlobalFoundries.
Reasoning is too much overlap with existing EDA folks
- [ An Anon EDA Vendor ]
'B' Closes less profitable lines and Icahn loses his shirt.
Icahn is a smarter, richer man than I but he is in way over his head here.
The same algorithm he used to raid other public companies aren't
applicable to EDA. The EDA market is much too small and much, much too
weird. I can't for the life of me identify a company that would acquire
Mentor for a premium. EDA is a flat market with ZERO breakout potential.
Synopsys nor Cadence benefit one whit in an acquiring scenario. The
pieces simply don't fit.
- [ An Anon EDA Vendor ]
C (Stay as it is).
Both Synopsys & Cadence have gone down the "we sell everything, and while
we have good stuff, you have to buy our bad stuff to make use of our good
stuff" route. Which is fine.
What's great about Mentor is they have stuck to producing great tools.
People dismissively say "point solutions," but that's how really good
tools are made. No matter what the Big 2 say, any "flow solution" starts
with a bunch of people trying to get some point tools working together.
Mentor has suffered because they didn't move to a ratable model quickly
enough before Cadence tried to destroy the EDA market. Fister ruining
his own company was bad enough, but if he has dragged down Mentor with
it, it will be a tragedy.
- [ An Anon EDA Vendor ]
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