Merger mania? What will happen in ESL if Cadence swallows Mentor?
I’m no Nostradamus, and was of course taken by surprise with the rest of the electronics world when on Monday June 16 I heard that Cadence was going to try to do a hostile takeover of Mentor Graphics.
Carlo Antonio Tavella, Jonah and the whale, mid-17th. century
Cadence has had a long-chequered history in ESL, starting with the formation of the Alta group (where I used to work) in the mid-1990’s. After building Alta up to one of the biggest ESL groups in EDA, Cadence then wound it down through a series of “interesting” management decisions, eventually trading the remnant - primarily SPW - to CoWare who used it to broaden their scope of tools, and which provided a much more supportive environment. Cadence then went through a stage of denial, a stage of re-definition (trying, somewhat lamely, to redefine ESL as “Enterprise System Level”), and then embarked on some new R&D initiatives which have been kept mostly quiet for several years. One of these is in the area of high-level synthesis, and was discussed by Mitch Weaver of Cadence in 2004, as being a combination of Get2Chip behavioural synthesis technology together with Cadence Labs research, and with the promise that “Next year [... 2005 ...] you’ll hear some big news from us.” We had to wait another three years, but in April 2008 Mike Fister in a talk in Japan revealed more details about Cadence’s re-entry into “Upstream Design” (See “Cadence announces reentry into upstream design in Japan“). Here he talked about a SystemC-based high level synthesis tool which has been in evaluation in Japan for a year, and also alluded to other tools under the mysterious label “Sydney”.
Mentor Graphics has had a grab-bag of different tools in the ESL domain for many years including some they acquired when they bought Summit Design, but these have never been knit together into a common ESL toolset driven by a common design approach. Just looking at their website, we can see point tools such as their flagship high level synthesis tool Catapult, IP-based design assembly Platform Express, Visual Elite, and Vista (both from Summit) for capture and simulation in SystemC, a seemingly overlapping tool called System Architect, HW-SW coverification with Seamless (clearly now put under verification, along with the Questa tools), UML modelling with Bridgepoint, and the specialised automotive system design tool Volcano.
Chris Edwards drew an interesting diagram on one of his blogs illustrating the overlaps and complementary tools between Cadence and Mentor. (”Overlaps R US“). This shows Catapult vs. Project Sydney, although from Mike Fister’s comments in Japan, Project Sydney seems to have a wider scope. The other Mentor ESL tools, although not listed, seem complementary and not overlapping. [UPDATE 22 June 2008: Chris Edwards has updated his very useful chart to include several of the other ESL tools, and they are complementary, not overlapping].
So what will happen in ESL if Cadence buys Mentor? As I noted in the beginning, I’m no Nostradamus! No doubt the non-overlapping tools will be judged on a tool by tool basis to decide their worth as businesses and as technologies. With respect to Mentor Catapult vs. the Cadence high level synthesis project, no doubt the evaluation criteria will include relative market penetration and interest, quality of results, and the future of the technology as a basis for further development. The decision, of course, will be made by those in the combined company responsible for the ESL domain.
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June 21st, 2008 @ 12:53 am
It seems a curious decision all around. I’m sure it probably makes good sense financially, for the execs and shareholders. I don’t see it as particularly healthy for the users and customers, either in moving the state of the art forward, improving pricing or improving the technology in any particularly meaningful way.
The churn and uncertainty is bound to ripple on for years if the merger/take-over actually goes ahead.
As you mentioned, Mentor’s rag-tag collection of ESL tools and IDEs has some interesting pieces, like Catapult. The verification space is equally muddled in terms of overlaps and missing pieces.
With the large overlaps, hostile nature of the bid and general size of the combined company, I’d be quite surprised if it does go ahead, but like you, I’m not a 16th century fortune teller.
So is Mentor Jonah in this story?
June 22nd, 2008 @ 4:49 pm
I will leave all art interpretation to readers and art experts. We also must remember that sometimes, no matter how tasty a dish looks, almost anything, if eaten in too great a quantity or at the wrong time, might give one indigestion!
June 22nd, 2008 @ 8:19 pm
I’ll have to say that this acquisition attempt makes no sense to me. I really don’t see what Cadence thinks they can get out of the deal (that they couldn’t get cheaper in another way).
When Mentor bought Sierra, they filled the doughnut hole with physical design jelly. I don’t see how Mentor fits any kind of Cadence hole. Perhaps this is a stock market maneuver, which would mean that it must defy logic.