Electronic Design

EDA Acquisitions: Who Pays The Price?

Acquisitions by EDA companies are a fact of life. Even in the worst of times, not a year goes by without a raft of them. In fact, Synopsys, Mentor Graphics, and Cadence are the result of countless mergers over the years. While the large companies do occasionally turn out innovative internally produced products, their new technology typically comes from startups they’ve acquired. In most cases, the large vendors make good choices and add new products and technology that enhances their portfolio once the acquisition is complete. Sometimes, things don’t go as planned, but either way the customers’ project teams are often the ones who pay the price of the acquisition. In theory, an acquisition seems like a “win win” situation. Two vendors with common goals merge to the seeming benefit to their customers. Their tools will be integrated and their combined resources will be used to accelerate development. The first step in the acquisition is the merging of the two teams, which possibly leads to overlap in responsibility and a round of layoffs. Productivity drops during the transition period while everyone on both sides of the acquisition waits and speculates on their own role in the new organization. Nervous employees will often leave during this period of uncertainty—further draining product momentum and expertise. When similar engineering groups are merged, people need to learn new products, business structures, development environments, and support tracking tools. Eventually, things settle down but the shock to productivity can last months or even years. Meanwhile, the customer’s projects march on and they still require support. Every vendor’s engineering group typically has far more requests for both bug fixes and enhancements than their bandwidth permits. Losing support and development people and adding confusion to the remaining staff will drop the responsiveness under the best of circumstances. The most precarious disruption for project teams lies in the future of the product direction. The acquiring company often has a strategic direction that differs from the startup’s and will take the acquired product in new directions to match its own roadmap. In that case, planned product enhancements are delayed or cancelled, leaving customers trapped without new features and fixes that they had been counting on. While competitive products may exist and could be a better fit, project teams are often unwilling to risk swapping tools. They have made a financial commitment to the existing tools and methodologies and are unwilling or unable to purchase new tools. They worry about the support required to switch to a new tool and the possible disruption that it may cause to their ongoing development efforts. The solution that can often turn this change from a disruptive force to a beneficial one is the availability of migration programs offered by savvy EDA companies. These programs give project teams a low-risk and cost-effective means to upgrade their tool flow. Often, the vendor offers a migration path from older technologies and gives customers access to improved tool capabilities with higher levels of support and service. More important, project teams know that they will have support throughout the life of their project and a product roadmap they can depend on. EDA acquisitions can be a time of turmoil for the project team and can cripple needed product enhancements and support. By taking advantage of a migration program, they can turn this into an opportunity and end up with a superior product with little or no disruption to their ongoing development efforts.

Carbon Design Systems Inc.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.