SAN JOSE, Calif.Top executives from some of EDA's biggest companies, gathered here for a panel discussion Wednesday evening (Jan. 14), delivered a sober message that could have surprised few, given the economybusiness will be mired in difficult conditions for the foreseeable future.
But participants remained upbeateven jovial at timesand voiced optimism that EDA and intellectual property would help to power an eventual economic recovery as governments enact stimulus packages and the world pushes for greener technologies.
"I have very high hopes that we are part of the solution going forward," said Aart de Geus, chairman and CEO of Synopsys Inc. He said there is "no question" that much of U.S. President-elect Barack Obama's proposed $800 billion stimulus would go to high-tech.
Walden Rhines, chairman and CEO of Mentor Graphics Corp., offered the evening's most straightforward prediction for EDA, saying he believed the final numbers would show that EDA revenue declined by 12 percent in 2008. He predicted EDA revenue would decline another 6 percent in 2009.
But Rhineswho is also chair of panel organizer the EDA Consortium (EDAC)said much of the decline could be attributed to a change in the revenue recognition model of Cadence Design Systems Inc. He said the "intrinsic decline" for 2008which he defined as the actual difference in product and services revenue for the yearwould be about 1 percent.
If not for the ongoing impact of the change in Cadence's revenue recognition model, EDA would achieve nominal growth of 1 percent in 2009, Rhines predicted. He said this was a more meaningful gage of the industry's performance because "it removes the effect of changing revenue recognition and focuses on the real growth in demand by customers."
Cadence, which last year lost its status as the leader in EDA revenue to Synopsys, is in the process of transitioning to a more ratable model, an accounting term for recognizing revenue over the life of a contract rather than at the time of booking. The change of business model means lower near-term revenue.
Still, Rhines said, 2008 would be the third year when EDA revenue declined, joining 1999 and 2003. It would be the first time that the decline could not be entirely attributed to a change in the revenue recognition model of a major vendor, he said.