Jay Vleeschhouwer authors a weekly research paper on the software industry. This week he covered both Cadence and Magma among other companies that do not serve the EDA industry. Some of the remarks about Cadence will sound familiar to those who either attended the EDAC CEO Panel, or Lip-Bu Tan's keynote speech at DVCon.

Cadence Design Systems
About Cadence Jay reports that Cadence Design Systems recently held an analyst meeting in New York. The presentation’s emphasis was heavily on the managerial and “cultural” changes from the prior regime. The commentary was mostly reasonable generalities, with some interesting details or hints about technology and the business. The highlighted changes have mostly to do with operational and financial performance, i.e., the return to non-GAAP profitability, product quality, and customer orientation. Cadence noted that product usage had been trending somewhat higher and that its installed base is "stable".

In addition to comments from Lip-Bu, the presentation team included: the senior v.p.
of worldwide field operations (also the head of sales), the new chief marketing
officer, the R&D heads of the front-end group and the implementation group; and the CFO. One notable difference from prior analyst meetings is that there wasn’t a customer panel, reports Jay.

Cadence identified as key growth drivers for EDA such as end-markets, e.g., mobile, video, etc.; new advanced semiconductor production nodes, functionality, and software applications. The company believes that long-term growth for EDA could be in a range of 1%-6%, which is consistent with both Jay's and my views, while Frost & Sullivan projects that the EDA industry will reach $10 billion by 2015.

In terms of technology or new product directions there was some discussion about the importance of embedded software and what we inferred was some new technology coming for hardware/software co-design and coverification. One of the “hardest problems” is taking into account “what happens inside the hardware”. One area where this would matter to Cadence is in its hardware-based verification acceleration business. Some words were also spent to talk about "New Mixed Signal", to connote new requirements, e.g., low-power, IP aggregation, in what is still Cadence’s strongest franchise.

Magma Design Automation

With respect to Magma, Jay reviewed the 3Q2010 results reported by me in the article you can find here.

In looking at near future results, Jay points out that " This is apparently going to be a busy Spring season for the company with a number of anticipated product releases, both in core
Implementation (Talus) and in newer areas; we would surmise these will likely include new timing analysis technology (and as Cadence did at theaforementioned analyst meeting, Magma highlighted in its prepared new requirements for mixed-signal SoC design, as well as “design reuse”, though it hasn’t elaborated on the latter).

We should expect some formal announcements at the Magma MUSIC user conference on March 10, followed by additional announcements leading up to the Design Automation Conference (DAC)." it is possible that given the positive actions taken by Magma, the company may reach a level around $160 million in revenue by 2011, although this number is not an official Jay forecast.