It was almost unthinkable that a single company would rule the EDA world. At least this is what I strongly perceived, a few years ago. Now, put the present dishes on the table and I see that, Synopsys is giving nightmares to all other EDA shops. While working with Synopsys, we always saw Cadence as the rival company to get floored on. All of that, was in the wish list and not many of us thought we could do that, ever so easily. Cadence was the obvious leader of EDA for many years and Synopsys strongly stood at the second position. Then there were the Mentors and the Magmas, at a fair distance down. Magma was the emerging company with a strong future predicted by many pundits within and outside the EDA world. It was imminent that Magma one day would give a stronger competition to both the big brothers Synopsys and Cadence. They may still be a force to reckon, but sadly they tried to act over smart and it all triggered a downfall. I am not sure whether their, rather peculiar sue attempt on Synopsys was wholly responsible for their slide. Definitely that may have had a role.
Now it appears that, the discounts offered by the EDA big fellows are giving more aches to smaller players. It is well known that the EDA tools are phenomenally expensive and the marketing always revolved around giving deals for bulk purchase of tools. What is more colourful is that the buyers offer to make the deal public in exchange of more discounts. The concept of primary EDA vendor was not that prevalent a few years ago. However, the trend these days is to grab that extra mileage by roping with leading semiconductor houses. It is a big win for both the buyer and seller. Synopsys for sure is going to enjoy this. First they are among the very few making profit even in these difficult economy. They are perhaps the only one from EDA. Considering that the EDA market itself is only about 4 or 5Billion dollar market, the impact of a near 1.5billion dollar Synopsys doing too well is going to give more headache to other little fellows, in the coming days.
Cadence is literally having a plate of their own problems and now with the whole semiconductor market trying to minimize their R&D spending, it is double advantage for Synopsys; That too with newer friends adding to their primary EDA friends list. Magma is becoming more or less a prospective buying target than a rival. A few years ago, Synopsys had worries about a growing Magma. Now I wouldnt rule out a potential buy over by Synopsys itself, may be Cadence or Mentor Graphics!
Some people say that Synopsys is going to be the next Microsoft in EDA. Aart perhaps rightly said they want to be the Apple of EDA. I would prefer Aarts view here. Not just because Synopsys was my breadwinner for a while and not because I attended the same grad school as De geus, nor because of the well known fact that yours truly is an ardent fan of Aart de Geus. But because Synopsys is well managed by a great management team with great work ethics. When the ratable (subscription) revenue/ licensing model was announced there were lot of eyebrows, but it was a long term vision and Synopsys is really reaping the fruits now.
Having said all these, like many of you, I am too worried by this single monopoly trend in EDA. We need smaller players in every market and we need more innovation. From Synopsys standpoint having less competition would yield relaxed days ahead, but for the market we need better products and superior innovation. We need Cadence to revive and at the same time companies to emerge to take position for the next Magma. At this stage, I am worried about Magma. Is Magma to follow the Avant! route to get merged with Synopsys?
Aart has aptly mentioned that “I understand that the entire world is under economic pressure,” he said. “When that happens, some will do better than others”. One thing for sure. Among all the EDA executives, Synopsys folks must be getting better sleep these days.