( ESNUG 589 Item 04 ) --------------------------------------------- [04/14/21]
Subject: How CDNS COVID-19 indecisiveness gave Siemens #2 slot in Formal ABV
BACKGROUND: By CY 2020, OneSpin had roughly 50 to 70 employees generating
around ~$17M to $20M in annual revenue. That's nice growth since 5 years
ago in 2015 it was around $11M to $12M:
"Using EDAC's last 4 quarters (2H15 + 1H16) the total Formal ABV market
is around $84 million total. One spy told me it breaks out to:
Cadence Jasper : :############################# $58M (69%)
OneSpin : :###### $12M (14%)
Mentor Questa FV : :## $4M (5%)
Synopsys VC Formal : :# $2M (3%)
While another spy told me it ballpark breaks out to:
Cadence Jasper : :######################### $50M (60%)
Mentor Questa FV : :########## $17M (20%)
OneSpin : :##### $11M (13%)
Synopsys VC Formal : :### $6M (7%)
Of course, these numbers exclude all equivalence checkers and linters;
it's only about the pure F-ABV tool market."
- OneSpin's #2 in "Best of 2016"; the "we try harder" company
Long story short, OneSpin had a few close calls with Death prior to 2015
and even after 2015 -- but both Raik Brinkmann and Jim Hogan amazingly
managed to turn that all around over the years.
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Since 2019, here is what my spies told me as it unfolded:
Jan - Feb
2020: Cadence bigwig Paul Cunningham was on the rise. He wasn't
yet the Senior VP & GM, but the writing was on the wall for
all to see that Anirudh and Lip-Bu were going to promote him.
My spies tell me that Paul made an informal offer of $60 M
for OneSpin -- and Raik and Hogan informally accepted it.
March
2020: COVID-19 hit and the world economy went haywire.
Things were so weird that DVcon'20 -- the BIG verification
conference of the year had a sudden last minute MASSIVE
drop in attendance. A lot of CDNS/SNPS/MENT bigwigs also
last minute cancelled. Overnight DVcon went "virtual".
And the Cadence execs quietly let the right-of-first-refusal
(or some other acquisition paperwork deadline) to acquire
OneSpin pass.
That $60 million CDNS offer was effectively withdrawn!
Apr - May
2020: Then, my spies tell me the CDNS folks -- thinking OneSpin might
be in trouble because there was a business belief at that time
that COVID would make it easy for Big companies to thrive and
harder for small companies to survive -- came back to OneSpin
with a seriously lowball offer. (Under $30 million maybe?)
Good manners keeps me from repeating what my spy reported that
OneSpin told the Cadence execs on their lowball offer.
May - June
2020: Then somehow Ravi Subramanian caught wind of the failed
CDNS-OneSpin acquisition attempt.
Ravi immediately rallied his internal MENT folks on this,
plus he pulled in the Bank of Siemens to pounce on this
super rare opportunity. "It's not every day that he can
buy a veteran team of 45 Formal R&D guys each averaging
15 years experience in ABV engines," Jim Hogan told me.
MENT matched the earlier $60 million CDNS offer.
July - Dec
2020: Word is Cadence tried to jump back in once MENT matched
their first offer -- details are murky here -- but in the
end Siemens snatched OneSpin with a $70 million price tag.
Jim Hogan was in his glory working his Hogan magic all
throughout that time.
February
2021: On the Saturday before DVcon'21, Jim Hogan dies of a
late night heart attack.
The EDA world is in shock. And sadly, Jim, an EDA
luminary who's been personally responsible for over
20 EDA acquisitions didn't get to see his $70 million,
3.5x multiple OneSpin deal finally come through after
all these years.
March
2021: Paul Cunningham ascends to Senior VP & GM at Cadence.
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"It was *supposed* to happen this way, DAMN IT!"
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And instead of Paul was having OneSpin war captives pulling
his chariot in a Roman triumphal march showing the world of
JasperGold's superiority ... where at the end of the parade
the OneSpin captives are executed ...
... now the OneSpin team (and SW) have Siemens lawyers and
Siemens $$$ backing it. That is, overnight Joe Sawicki
suddenly picked up a very solid #2 position in Formal ABV
that will be (if managed correctly) harassing Anirudh for
decades to come.
Jan - Apr
2021: Lots of regulatory and business hoops to jump through to
get the deal approved by the American SEC, the German
government, and the U.S. military ... all because OneSpin
is a German supplier to U.S. military amoungst other things.
April 9th
2021: My spies tell me that all the acquistion hoops have been
successfully jumped and the deal is done.
Siemens/MENT now 100% owns OneSpin free and clear.
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NOW THE BIG QUESTIONS: Will the OneSpin R&D team and Raik have a multi-year
earnout where they're motivated to make OneSpin succeed in Siemens? Or will
they and he have a take-the-Siemens-money-and-run deal?
Will OneSpin be in charge of reinvigorating the MENT Formal ABV tools? Or
will OneSpin be subservient to MENT's 0-in olde guard and left to flounder?
Will OneSpin be allowed to keep operating as a hungry aggressive start-up
(like they have for years) that just happens to be inside Siemens EDA?
OneSpin's "going where Cadence isn't" approach is Best of 2020 #4a
OneSpin extensible ABV plus formal linting is the Best of 2020 #4c
OneSpin DV-Verify's surprise comeback in ABV is Best of 2019 #5a
OneSpin in formal areas where Cadence is NOT is Best of 2019 #5c
JasperGold and OneSpin both get #11 in 2017 for "Best of" EDA tools
OneSpin's #2 in #1 "Best of 2016", the "we try harder" company
And how JasperGold compares to OneSpin in the Formal Apps biz
Raik & Sawicki on OneSpin, Questa FV, Jasper, and formal apps
Raik on OneSpin's four formal technologies the others don't have
Raik and Hogan on formal apps, formal engines, and SNPS VC Formal
Raik on it's only OneSpin vs. Jasper in formal; not SNPS nor MENT
OneSpin CEO cites 8 "insufficiencies" in Jim Hogan's Formal Guide
Hogan on Cadence, Mentor, OneSpin, Real Intent, Synopsys formal
Or will OneSpin be Borg-absorbed into Siemens MENT corporate marketing and
left to die a slow death -- just like how 0-in (aka "Questa Formal") was?
"Resistance is Futile at Siemens!"
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How these questions are answered will make the difference between Anirudh
breathing a quick sigh of relief at this acquisition news -- or Anirudh
having serious headaches about ABV competition over the years.
- John Cooley
DeepChip.com Holliston, MA
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