(ICU 04 Item 17 ) ----------------------------------------------- [10/07/04]
Subject: What Wall Street Thinks of Cadence
WE HAVE A VOICE, TOO: I wasn't kidding when I said I found 257 Wall Street
types subscribed to the ESNUG mailing list. Two of them surprised me by
responding to my original Cadence customer survey. After that, I thought
what the heck and I pestered the list until I got 10 different analysts
to respond. And, yes, they're a mix of "buy side" and "sell side" people.
>
> Which specific Cadence product(s) are you MOST satisfied with?
>
First Encounter Floorplanner
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first encounter
nanoroute
palladium
virtuoso
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Custom/Analog product family (under-appreciated by Wall St),
First Encounter and NanoRoute
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nothing specific
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Plato Router; RTL Planner (the original SiPerspective stuff and the
direct descendants); Custom/Analog suite
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Analog Mixed Signal is where I like their position
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analog suite, first encounter, and nanoroute
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NC-Verilog, First Encounter, Assura DRC/LVS, Spectre, Dracula, BuildGates.
>
> Which specific Cadence product(s) are you LEAST satisfied with?
>
The timing engine in Encounter which does not talk with Get2Chip product
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Dracula/Diva/Assura
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back end place/route (whatever that product is called this week)
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Definitely Physical verification and the whole movement to DFM. CDN
can't even spell R.E.T.
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IC implementation suite still weak
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pcb
dracula
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Simplex. Expensive acquisition to buy Penny Herscher then couldn't
keep her.
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Assura, DFM BS that does not exist, X Fluff.
>
> What do you think of Cadence's Investor Relations service?
>
Alan Lindstorm (IR) is a pretty strong guy who was suprisingly good
understanding of the product. Turnaround is hours.
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I have always had pretty good response from the IR team, and have gotten
access to the right people whether technical or business focuesed.
Typical response within hours, sometimes the 1-2 day range.
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ok - next day reply
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Good follow through within 5 days.
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something between average skills and experts
responses within hours if not immediate
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Pretty inept, unlesss I get through to a really senior person in the
finance division...at which point the stuff I get is chilling and not
always accurate, but much less inept. I normally get turaround in
a few days.
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Only call IR for logistics (events, conferences, etc.). For important
stuff go directly to Bill Porter (CFO) or Bingham.
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Cadence IR returns my call promptly. But they know me.
>
> Do you ever read the comp.cad.cadence newsgroup?
>
No
n
N, never.
Y rarely
what's a newsgroup? Just kidding, but no.
No
N
N
No.
>
> What do you think about Cadence Design Services?
>
drag on overall profitability - never quite self supporting
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Have had no experience recently - had worked with Tality in 1998,
appeared competent then.
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No opinion
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Not a great idea -- expensive, erratically utilized, not a great
investment
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Disaster. Huge distraction that cost the company its chance for retain
industry leadership. Poorly thought out plan that led to the company
being run without a coherent technical vision. ***Instead of being a
company that needed great technology managers to succeed, it became a
company that needed great bean counters to succeed.*** CFOs as tech
CEOs lose money, albeit slowly.
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Have always thought of it as very solid team from Simplex, coupled with
those left from Tality (not as high-end, mostly telecom focused, or
were). Could be an erroneous assumtion.
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A well-intentioned experiment for growth (one that you correctly did not
agree with from the get-go) that should have been drastically modified
and reduced much faster than the quarter-by-quarter bleeding
through 2001-2003.
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I think design services is a tough business. Tality never made it off
of the ground. It's probably necessary, but it's not a money-maker.
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a good way to feed back what customers need into R&D
>
> How do you rank about the Cadence sales force?
>
Used Car salesman
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clearly aggressive, willing to discount materially
used car salesmen
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HELPFUL BUSINESS ACQUAINTANCES
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X Helpful business acqaintances (or)
X Used Car salesmen
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I think they really do try to respond from a business level. Big picture
talk can sometimes feel "sales-y" though.
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Used car salesmen
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XX - Helpful business acqaintances
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Congressmen and/or convicted con-artists
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Some are helpful friends and some are helpful business acquaintance.
>
> A voodoo priestess in New Orleans swaps your soul with Mike Fister,
> the CEO of Cadence. Even though you were a Cadence customer before,
> now that *you* are the new CEO of Cadence:
>
> What 2 or 3 things about Cadence would you DEFINITELY change?
>
Retrain the sales force and tell them the product quality is much better
now so they don't need to price discount. Perhaps review Bushby's
performance.
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1. Ask Ray, politely, to be Chairman and let me run the firm. Fire all
the business/finance con-artists who don't know anything about the
EDA/semiconductor business. Stop issuing obscene stock options to a
handful of executives, including myself.
2. Buy Magma or Mentor whoever wants to play ball and create a more
profitable industry. Reset financial expectations lower, and commit
to stop doing "unnatural" renewals.
3. Have dinner with Aart once a month. Visit customers constantly and
listen to them. Have lunch in the company cafeteria 2-3 times a week
like Joe used to.
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R&D productivity
Bring in pricing discipline
More discipline on acquisition price
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-Ray Bingham's and Porter's haircuts
-focus more on analog and non-competitive areas
-try to keep the current price implosion from happening further
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I would definitely get in the game in RET. Big area where challenges are
tough. I would also quit making such big productions about marketing
events and focus the energy on corporate culture. Really try and build
the team with a corporate vision.
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As the new head of Cadence I would do several things that I believe would
benefit the EDA industry as a whole:
1. Keep building and buying great leading edge technology
2. Focus on developing tools to the Open Access database, encourage
competitors/colleagues to build to the database, market that to the
semi industry as a means of capturing the significant dollars that
today are spent internally on methodology and integration for the
EDA industry.
3. No more lawsuits that only pad the pockets of the attorneys involved.
4. No more bidding on EDA properties for sale that you are not actually
interested in -- stop playing the game of driving up the cost of the
acquisition to drain your competitor who really wants it, because what
comes around goes around and in the end all you've done is inflate
private company valuations above what the market should bear and again
waste dollars on investment bankers and others that could be spent on
industry innovation.
5. Take the savings from 3 and 4 and reinvest in research and
development--innovate.
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Establish stronger technical vision for the company and regain technical
leadership in the industry; put an end to the management politics and
fiefdoms. Build a process and culture that can incorporate new
technologies and people without fragmenting the company.
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Work on improving internal morale with rank and file employees
Figure out what technologies can renew growth for Cadence/EDA
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Would change the sales tactics that ultimately destroy growth in the EDA
industry -- bundling in new tools for free (and/or remix) hinders
innovation and limits new revenue opportunities. Sales process at the
big EDA companies has almost become a "refinance" game.
Would provide more detailed financial information, including bookings.
constantly changing license/business models just makes the problem worse.
Petty analyst complaint...would shorten up the prepared remarks on
earnings conference calls and get to the Q&A faster. 1.5 hour conference
calls are too long.
>
> What 2 or 3 things about Cadence would you definitely NOT change?
>
Breadth of offering. Willingness to adopt good new technologies from
outside the company.
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1. Continue to drive on openness and OpenAccess.
2. Continue to focus on growth through strategic acquisitions.
3. Continue to capitalize on sales and marketing strengths.
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Great salesforce retreats
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I would not change the focus on getting bigger and deeper with the
largest customers.
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-real professional investor relations
-good access to management
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Would definitely not change the focus on the custom/analog side of the
business -- important revenue generator (and market share) that no other
EDA vendor has, keeps them in the mix for the big bundled digital deals
(that happen to include custom/analog as leverage)
Would not change the revitalized effort in digital IC design -- Encounter
platform finally seems to be coming together with multiple strong pieces.
Would not change the license/business model (again...)
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Don't make significant changes to high-level management
Don't mess with license models (changes make us think you're
hiding something)
>
> Overall, how do you rank Cadence vs. the other EDA companies you've
> dealt with? (Choose one) Far better, far worst, about average?
>
About average, they are all the same!
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I believe Cadence has become one of the best companies with which I deal.
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average to better. It's a big ship that's tried to become more nimble
in recent years.
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Average
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Mediocre....not a high performance org.
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I cannot answer this without the context of leadership. With JoeC
as CEO, an A-/B+. With RayB as CEO, a B-/C+.
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About average, a little worse
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Before snps blew up, I would have said "worse than avg" but since the avg
moved down so incredibly, id now rate it as better than avg, but thats
because the avg changed.
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Look at the results. Second best EDA company that we have ever had.
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I rank them third of the big 3 and 4th if you include Magma. Although
SNPS saw big weakness and really disappointed, so SNPS maybe overtaking
them for the cellar.
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