> 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 & unsubstantiated theories on why:
>
>   - Cadence was pissed at Gary for his letter warning of "personnel
>     problems and arrogance" after Cadence's recent DAC pullout.
>
>   - Synopsys and Cadence were both furious at Gary's comments which
>     supported Magma in the last SNUG Census.
>
>   - Cadence and Synopsys were both angry at how Gary put Magma into odd
>     categories that favored Magma in his annual Market Trends 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.
>
>   - 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.
>
>     - from http://www.deepchip.com/gadfly/gad102506.html


From: Gary Smith <gary=user domain=garysmitheda got balm>

Hi, John,

Since it's now after Nov 1st, I will tell you what happened.

Your analysis was pretty exciting; incorrect but exciting.  If you remember
when I first came to Dataquest, I was accused of being in Mentor's pocket
(1994), Cadence's pocket (1995) and Synopsys' pocket in 1996.  At that
point, I wrote a short article explaining the beauty of the service model
used at Dataquest and Gartner.  In 1996 Synopsys was my largest client; they
provided 3.5% of my revenue.  Now if you don't think I'd piss off someone
that contributed that small of a percentage to my revenue, you're crazy.
So bottom line is that Garner Dataquest, and now Gary Smith EDA, are not
"coin-operated" analysis companies.

You were correct that both Cadence and Synopsys had dropped our service.
Cadence has always been an off and on client; decidedly off during their
Tality phase, and the present management decided that they didn't need EDA
advice.  Synopsys, on the other hand, has always been one of my best
clients; that is until 2004.  That year they took a market direction that we
disagreed with.  Our meetings turned into frustrating conversations on both
strategies and tactics; so when they cancelled it was a relief to us both.
Fortunately their new reorganization looks very promising and hopefully we
will be able to work together in the future.  But as I said, Cadence and
Synopsys both didn't contribute that much to our overall service revenue.

EDA is a small industry.  There are 4 large vendors and 10 to 15 medium
sized companies.  In addition, there are around 450 small companies.  And
there is churn.  Every year there are around 18 acquisitions; and of course
if one of our clients is acquired, we lose a client.  We therefore have to
continually backfill with new EDA companies that were start-ups just a few
years before.  Our model was to help companies, in their start-up phase,
with the understanding that they would take our service once they got
financially stable.  That worked for over 15 years (it started in 1985).
Unfortunately, for a few reasons, that stopped working 5 years ago.  That
meant the service continued to shrink with each acquisition until it was
no longer self supporting -- a bad idea in the business world.  At the end,
most of our clients were End Users and the Financial Industry.

So what went wrong?  There were really 3 things.

  1. Most of the EDA start-ups of the late 1990s and early 21st century
     never got off the ground.

  2. Gartner went to a new pricing model that few start-ups could afford.

  3. The startups that we helped to get off the ground didn't take our
     service.

That 3rd point was the most interesting.  Our group in Gartner continued
helping EDA start-ups; when Gartner brought their pricing down to an area
most financially stable EDA vendors could afford, we were surprised that
nothing happened!  When our sales executives started asking the non-client
EDA vendors to take our service they were received some very interesting
answers, such as:

  1. We don't need to pay for the service, Gary gives us everything free.

  2. I go to DataQuest-at-DAC every year and get a copy of their
     presentations.  That's all I need to do my yearly plan.

  3. I only really want the Market Trends book and Cooley publishes most
     of that information in ESNUG.

So somehow our unwritten contract with the industry had been broken.  "You
help me and I'll help you" turned into an entitlement program.  When we
started charging for the DataQuest-at-DAC presentation, the vendors were
shocked.  When we started catering to our End User and Financial clients,
the non-client EDA vendors complained that we didn't have time for them.
And of course there was the reaction when Gartner shut down the service.

So anyway we are going to try to keep our service going as a start-up. 

  - We now have control over the pricing, so that will be fixed.

  - We will stop giving away information for free, except for the early
    stage, pre-funded start-ups, and then we will make it clear that
    they need to take the service once they become financially stable.

What we don't know is whether the EDA vendors are willing to pay for our
information.  If they are, great; if not, does anyone need a Electronic
Design Methodologist consultant?

    - Gary Smith
      Gary Smith EDA                             Santa Clara, CA