Facing the challenge

Ask Mike Fister, president and ceo of Cadence, pictured, to outline the challenges his company – and the eda sector – faces, then creation of end to end solutions and getting rewarded appropriately for them would probably head the list. “One big challenge for the eda industry is to look at the technological problem in a holistic way, from end to end,” Fister explained. “In order to do this, you have to innovate in many domains and continually optimise your solutions. This mindset helps compose different elements of the solution, but it demands a certain mindset that only big players are capable of.” Creating technology is one thing, getting the appropriate return on your investment is another. “The challenge is to be properly rewarded for the technology you create,” he continued. “You have to let the customer see the value they are getting from eda and give them a good business reason to buy. In the past, eda companies have charged customers for solutions that were not so helpful. This is where the holistic vision comes in.” Fister’s time at Intel has influenced the policies he brings to his current role. “At Intel, I learned that companies use only a low percentage of the available processor power. This is significant for the eda industry,” he noted. Accordingly, Cadence has segmented its Allegro PCB product line into three ‘tiers’, representing different price levels and capabilities. “This flexible model allows the customer to consume only the capabilities they really need and never pay for something they don’t use,” he noted. Fister’s use of ‘holistic vision’ reiterates Cadence’s business model, which is based on a combination of wide ranging tools and services. Its main strategy is to ‘catch’ the developer from the beginning of the design process until its end. How does Fister view acquisitions? “Good mergers catch people’s passion. Nevertheless, the eda industry has had many mergers and acquisitions, but integrating those acquisitions has been slow. “We have seen that mergers can be costly and you can lose key people in the process. This is why I am encouraging our staff to innovate inside Cadence itself and to work on advanced developments with relevant external partners.” Fister was referring to Cadence’s European Startup Accelerator program, which provides an eco system of VCs, in addition to design tools, services and hardware and access to IP supply, foundry, packaging and test. Pond Ventures and Israeli based Joint Venture Partners have already signed up to the program. Meanwhile, Cadence has made two recent acquisitions: Israel based Verisity for $315million and Praesagus, a small company specialising in design for manufacturing, for $26m. “The merger with Verisity has worked out well. Verisity and Cadence shared common ideas about the eda roadmap and Verisity’s offering was complementary to ours. It has helped us develop our verification business and the activity that originated in Verisity is now generating a growth rate of about 20% a year.” Fister noted that while Cadence might acquire companies from time to time, it prefers a ‘reasonable and pragmatic way to cooperate with partners’. “Sometimes, the companies we partner with have good technologies, including ones that we don’t have, but they don’t have the ability and the method to partner with other players,” he concluded.