I don’t thinnk that this deal will happen because of financial problems at Cadence. Look at the article today on Reuters about how difficult it is for Cadence to borrow so much money.
http://www.reuters.com/article/marketsNews/idINN1448526920080814?rpc=44

Daniel

Allegro will replace BS and Expedition.

PADS will replace the now defunct Orcad Layout.

DxDesigner will translate seamlessly to Orcad Capture,…no more Mentor schematic entry tools. (which was never liked by most engineers anyway,…and neither was Cadences’ Concept)

The Mentor customer base will be migrated to Cadence with a deal they “can’t refuse”.

Massive Mentor workforce reductions, sans PADS, will pay off the debt in 2-3 years.

High end PCB designers, FPGA designers and engineers will now have common tools to master when seeking employment,..instead of 2 or 3 different flavors that do the same thing.

Archiving databases and maintaining compatibility with customers and separate divisions within these corporations into the future will be easier and more viable.

Customer base will be larger, and resellers and sales reps will gross more, as will the company itself (Cadence), and lower operating costs & larger customer base can easily be double for even more profitability by lowering prices and maintenance fees across the board.

And last,…it’s the capitalistic thing to do.

Fister, might not be able to close the deal but even if Cadence successfully completes the transaction, it might eventually be judged a mistake if integration proved problematic and if the company failed to secure the expected benefits.

Big EDA players make virtually no efforts in communicating their value to their customers, nor do they make any real effort to hear what their customers want. They should recognize that technological breakthrough mainly coming from innovative startups. If they deliver significant value to their customers, the customers will ensure the long-term growth of their company.

Some of the comments may appeal too emotional. Perhaps there shouldn’t be much space for emotion, though, in the corporate world where success or failure is often determined by numbers and cold-calculations, customers should look for ways to benefit from this event.

Any significant move like this creates opportunities, especially for young startups. Without knowing whether this will close or not, the market has already responded.

Since both Cadence and Mentor focus is on ASIC and IC design solutions, this acquisition would create a leading position for Cadence at the IC design level in the market, and joint resources would makes sense.

The question is would the PCB design customers be served by the acquisition (should it eventually accepted)?

Since both companies have tools that extremely overlap in the PCB design area, joint resources would not make sense and would be a failure.

Shortly after Cadence will take over, many of the development team will be disbanded - that will be the ‘easy’ part. Yet, consolidating the products and re-packaging them will take a significant number of months as its more complicated and a time consuming task. This means that a lot of resources will be put into barrier and interfaces between the products, but no further R&D in terms of functionality or innovation. Meanwhile, customers of both companies will face a lot of difficulty having their problems unresolved.

It’s just a matter of time before products will be replaced. Still the question remains what products will be selected and what kind of migration the customers will have to go through.

No question however about Mentor Expedition, Board-Station, Pads, Cadence Allegro and Orcad users who will be left with uncertainty and confusion. As their design requirements evolved, they will start making some forward thinking and look for new solutions to work with.

Mentor products also sold through a reseller network. I can only imagine the insecure they must be feeling these days.

It reminds me the pain experienced when Cadence acquired OrCAd.

If the takeover by Cadence is eventually accepted, it will bring some uncertainty and confusion to
Mentor Expedition, Board-Station, Pads and Cadence Allegro and Orcad users.

Normally a combination of development and acquisitions take years (reorganizing the companies, selecting the right products and re-packaging them). This means that a lot of resources will be put into barrier between the products and interfaces, but no further R&D in functionality or innovation.
Meanwhile, customers will face a lot of difficulty having their problems resolved.

It’s just a matter of time before products will be replaced and Cadence & Mentor customers begin to make some forward-thinking, looking for new solutions to work with as their design requirements evolved.

Cadence and Mentor products are sold through a reseller network. I can only imagine the insecure they must be feeling these days.

It reminds me the pain experienced when Cadence acquired OrCAd.

1) Sales in the EDA industry is more based on the personal contacts made by the sales force and the FAEs than the strength of the product offerings. After the merger the sales force will see a lot of layoffs on the Mentor side. These sales people are going to find comfort by applying to Synopsis for a job. They will carry a major chunk of Mentor customer base to Synopsis.

2) After the merger, Cadence will have a slew of products that will be dfficult to support. Especially some of the Mentor legacy products will have to be scrapped or be supported without proper support groups just because the customers don’t want to switch to the Cadence products right away. Mentor’s support groups have an engraained culture that will be hard to change over night. There is a cultural bond between the customer, sales, FAE, customer support and engineering at Mentor Graphics. This bond can be very fragile after a takeover. The sales and FAE’s who for years have been touting the superiority of their products while putting down the cadence products will have a tough time to sing the new song in front of the customer.

3. The only upside to such a merger is the sprout of some new EDA startups by Mentor employees who would rather leave the company than be part of the marriage. They will only serve as new competition for Cadence a few years down the road.

Let’s hope that we don’t see Fister standing in front of a Mission Accomplished banner the day this deal closes.

Even the Mentor/Silicon Compiler merger had similar fatal characteristics:
1) Product overlap
2) Culture mismatch: Silicon Valley vs Oregon

Daniel