Jan
Start-ups struggle
The squeeze would appear to be on for start-up companies. In the last few days Mentor has acquired Agility to consolidate their position in the behavioral synthesis market; Doulog has acquired Beach to expand their capabilities in the system integration business; I know of two other companies that will be tying the knot very soon and I am sure there are others that I am not aware of.
These acquisitions are not done in strength and are a signal that the money flow has stopped coming into the EDA industry. Start-ups have to get to cash flow positive in much shorter times than they did before, and this makes it difficult for them to innovate in new areas, or it is just as difficult to enter an established area, especially if one of the big three are already there. This does not bode well for the industry as a whole. The industry needs the innovation that comes from start-ups but they have to make some money for the investment dollars to keep flowing.
Hello Brian,
To make cash-flow positive there’s making money, and there’s saving money.
The traditional way for an EDA company to engage with the industry has always been expensive. Numerous meetings and trade shows that cost flights, hotels, cars, and the application engineer’s time are all expensive.
At Xuropa we’ve now made it free to create an Online Kiosk to engage the electronic design community.
Go to http://www.xuropa.com, sign in, and click on “Create your own Kiosk”; upload your videos, presentations, datasheets, and applications notes; activate your Kiosk and send out an email blast to let everyone know you’re there. And you’re done.
The Xuropa Online Electronic Design Community is focused on our industry…and did I mention that your Online Kiosk is now free?
- James
January 23rd, 2009 at 6:51 pmHi Brian,
It is, indeed, difficult for startups to turn a profit. This is in part due to the expense of the channel.
But, I think that as long as the big three can provide attractive cash outs for investors, startups will continue to get the cash they need to innovate.
January 23rd, 2009 at 8:05 pmBrian,
I expect at least a dozen EDA mergers and acquisitions in 2009, just because the larger players have some discretionary cash to spend and it’s a bargain to pick up a promising new point tool.
The Agility purchase makes sense for Mentor because their sales on Catapult are still climbing. If I were Forte or BlueSpec I’d offer an Agility trade-in program next week.
January 25th, 2009 at 12:38 am