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Cadence Design Systems Inc. Message Board

  • edanews edanews Sep 24, 1999 3:51 AM Flag

    EDAvet: where have you been

    when CDN down to $9?

    When CDN went up
    above $15, you were trying to convince
    this board
    that CDN has a great value and you're long
    this board. Then the stock were donw, you announced
    turn negative about CDN. Insiders grabbed large
    of stakes during this period. Now after Olsen and
    insiders got ready, you show up again on the long
    CDN has more challenges ahead. Within a few monthes,
    stock recovered from $9 to $14, which is 50% profit.
    much more do you expect? If one got in CDN for long,
    is 6 mo or longer, then how would CDN stock price
    linearly go up, or up and down. If you are here for
    own interests of profit, that's fine, but do not
    to be for the public, and do not mislead other new
    on this
    board and EDA in general. CDN launched a
    price war in all
    areas of EDA, EDA is not a good
    choice of investment.
    Between you and NewGambler,
    I'd rather listen to NewGambler,
    because, at
    least, I heard the negative opinion about a
    and I won't lose my savings by investing in a

    company you promised for a great value, which you see and

    others do not get so far.

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    • This could be pretty good news for Cadence for
      the following reasons:

      1) European customers
      are substantially different from US and Asian
      customers. Work that's done for them often is a blind alley
      that doesn't lead to sales elsewhere.

      2) We
      have to wonder why they make a major press release for
      a minor UK player. There's an old saying in EDA:
      "If you can't sell it in Silicon Valley, you can't
      sell it." Where are Magma's local


    • There are a lot of great services on the internet
      that do some pretty handy stuff, especially for
      investors, but
      as technology evolves so too do these
      features. Here's a great new one that has an invaluable

      It's called Sleuth and what it does is track the
      most important and the most minute details about a
      For example, a friend of mine told me that he
      subscribes to it for a certain stock and one morning the
      emailed him that the company had purchased a
      couple new domain names (web site addresses).

      From that, he was able to ascertain that they were
      moving into a new business area and one that he felt

      certain would succeed.

      Imagine, hypothetically,
      that you were holding IBM and you got a sleuth report
      that they had bought the
      Wouldn't that be an early heads-up that they were
      going into cable long before the world saw the

      It also will notify you if
      personnel changes are made, litigation ensues, patents or
      trademarks are registered,
      and even of rumors
      circulating. It also gives you the latest short interest,
      analyst reports, earnings forecasts,
      and technical
      trading too.

      It is entirely free via a link at

      We all know that details make the difference,
      even for CDN

    • just_in_case_you_are_wondering just_in_case_you_are_wondering Oct 23, 1999 11:26 AM Flag

      Just read on Cadence web page that "many
      customers" have reported 4-6X cycle improvements with PKS.
      Does anyone have pointers to press releases by those
      companies? Cadence specificly mentions HP, IBM and NEC. I
      could not find any pointers on the Cadence



    • Thanks for the response.... but I'm still having
      problems reconciling the analyst-speak with the internal

      Regarding attrition.... Cadence has three separately run
      businesses -- EDA S/W, Methodology Services and Design
      Services. Aren't you wondering where the new people are
      coming from and going to? I'd say most of the recent
      attrition came from SW engineering, marketing and sales.
      I'd also say most of the gains are going to sales and
      design services. The SW engineering and marketing people
      were mostly bay area-based and the design services
      gains are far flung -- mostly outside the valley. Is it
      even possible to add that many people in the bay area?
      And if so, why go to Cadence with that much local
      start-up activity? If the bulk of revenue and margins are
      still coming out of the product side, short-term there
      are still upside issues.

      Regarding FAMs... we
      could argue when the FAMs became significant, but it
      certainly started well before Joe departed (~3yrs ago).
      Problem is these things turn every 3 years. That means 2+
      generations of FAMs with some/many accounts. As you
      indicated, they didn't get better with age. In the past 3
      years, it's basically been a blow-out sale. Converting
      to anything else means higher customer costs,
      period. My point, is if the last deal customers got was 5
      to 8 cents on the dollar, why would they now accept
      anything north of that? It's possible, but I don't think
      it's nearly as simple as a

      Regarding material changes... let's take a look at that. On
      the people side, Ray seems to be a decent guy, just
      NOT the right guy for that job. Many believe he blew
      it by letting the FAM get out of control. Also, most
      believe, as I do, that a financial guy simply can't run
      this type of company -- not yet, anyway. Shane might
      be a good guy too, but he's probably the biggest
      reason why the technology and marketing turnover has
      been so great. CDN needs a "glass breaker" in that
      role, not someone inclined to status quo and
      under-the-rug sweeping. John Olsen, much revered by his cronies
      and much feared by everyone else, is the only person
      I have ever known who could get away with telling
      the entire company he screwed up many times, then
      blow up the BU structure because the FAMs were messing
      up his measurement system (e.g., they couldn't
      accurately account for BU-specific of product line revenue).
      My sense is that there's a serious Napoleon complex
      thing going on there. His latest project is eCommerce
      with 2-3 competing, probably conflicting teams all
      scrambling to get something out early next year. Duck and
      cover! This guy has a real knack for selling the
      electricity out of the building to make his bogie. Someone
      told me much of it's centered around a ... portal. Did
      you see the stock price just go up when I mentioned
      the "P" word?

      On the functional side, why they
      insist on segregating selling the tools from helping
      customers adopt the tools, is a big mystery to me. I do
      know that it drives customers NUTS. Smacks of
      bait-and-switch. "Here are these great, easy-to use tools" ...
      "oh, you want to use them, that costs extra" This
      isn't just a CDN problem, but they do seem to have
      formalized the contention. It makes things even harder when
      it comes time to sell customers something else. I
      think it was Steve Domenik from Sevin Rosen who said,
      "this is the only industry that refuses to give
      customers what they want...."

      The fact that they
      tried to recuit you is probably a good thing, but I
      also noticed you didn't accept -- may I ask why?

      You know, as I said earlier, there's no where to go
      but up. Maybe, I'll load up myself ... in a few

      Go Cadence!

    • 1. Why have atleast 300 people left in the past 3

      - In the conf call, Ray said that attrition hit the
      high water
      mark in June/July, then came down
      significantly through August
      and September. Also said that
      headcount in that same period
      had increased to 4783,
      ~2/3 of that from OrCAD. So the net?
      Well, my
      sources say morale is significantly higher now, but
      am sure they lost some good ones, but I also know
      they lost
      some bad ones (housecleaning is a good
      thing sometimes!). Guess
      about all we can do is to
      speculate as to the effects, but
      whatever they were,
      that period appears to have abated.

      2. How do
      you see CDN unraveling 6+ years of FAMs that consume

      ~80% of SW revenue, and have lagged expiration
      schedules into
      the next 2.5 yrs?

      - I could be
      wrong, but I think your numbers are off. First off,

      it is wrong to characterize all FAMs as "bad
      things". The overuse
      and abuse by sales reps greatly
      accelerated only in the last
      1.5 to 2 years. Also, FAMs
      were not done 6+ years ago...they
      really only
      started in earnest about 3+ years ago. Ray
      this in the conference call, saying that major

      contracts were up for renegotiation in mid-y2k, at which
      I hope they will be migrated to the ratable
      subscription model.
      So again, beginning next year, we
      should see whether the new
      business model is really
      working, and it should accelerate
      from there, right in
      line with corporate statements.

      3. What
      material organization and/or strategy changes have

      taken place that would reverse the exodus (due, I say
      technical and business misdirection) and create a miracle

      solution to the FAM unraveling problem?

      - If, as I
      posit in #2 the FAM situation is not as large a

      problem as you believe, then a miracle is not necessary:
      can get by with the conservative use model to
      which they are now
      transitioning. Also, as I posit
      in #1, I do not see the "exodus"
      as the major
      problem that you do. Or at least, it is a more

      temporary problem. I do know that CDN is focused on
      and retaining talent at a higher level than
      has been evident
      for some time - they made a very
      sweet offer to me to come back,
      though I had to
      reject it for now.

      So the net is: they seem to
      be digging thenselves out of the
      hole they got
      themselves into. As you correctly point out,
      mistakes were large, and thus will take some time to

      correct, and it is primarily this that makes


    • Maybe you're right.... Three

      1. Why have atleast 300 people left in the past 3
      I'd say they were among the best with mountains of
      underwater options, you'd say they were no-ops, and you
      would know better than I, but the question

      2. How do you see CDN unraveling 6+ years of FAMs
      that consume ~80% of SW revenue, and have lagged
      expiration schedules into the next 2.5 yrs?

      3. What
      material organization and/or strategy changes have taken
      place that would reverse the exodus (due, I say to
      technical and business misdirection) and create a miracle
      solution to the FAM unraveling problem?

      you're free to continue the "my religion is better than
      your religion" discussion, but these are still
      significant questions that need answers. I didn't read
      anything about this in any of the articles (a.k.a.,
      research) you referenced.

      Call it a character flaw,
      but I can't blindly bet on the future if I can't see
      an acknowledgement and addressing of an adverse

      Please advise.

    • At first this quote bothered me as well. But if
      you read the press release in which CDN announced
      their results the company stated:

      "As the chip
      industry moves to smaller line widths between transistors,
      semiconductor companies will need state-of-the-art design
      software, Cadence said, adding that it expects companies to
      begin the transition to 0.15 micron and 0.12 micron
      technologies in the middle of next year."

      So - I
      believe Cadence is not talking about .18 in the Motley
      Fool article.

    • << To quote the Motley Fool article:
      "Cadence CEO Ray Bingham told Bloomberg News that about
      90% of the industry has yet to make the move to the
      new technologies, and he expects the "sweet spot" of
      the transition to hit sometime in the middle of next
      year." >>

      Actually this quote troubled me.

      (a) I suspect the alleged "sweet spot" has been moved
      to coincide with when CDN's products will be ready,
      rather than vice versa. Perhaps the sweet spot for the
      industry buying Avant!'s 0.18 solution will be early next

      (b) By the time one gets to mass
      migration of customers, the battle is already over. The
      high-profile early engagements decide the outcome. Again,
      wouldn't these occur earlier than mid next year?

      I'm not interested in bashing CDN or Avant! or
      anybody here, but I am wondering if anybody else gets the
      feeling CDN is going to be late and trying to pretend it
      ain't so.

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