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Cadence reports poor results

7/29/2008 01:00 PM EDT
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StrategyKinetics
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re: Cadence reports poor results
StrategyKinetics   10/16/2008 5:10:08 PM
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As Kevin, Dr. Tan and Dr. Shoven look for the next CEO, I think there are a few lessons from the past 4 years that are very evident about running a company such as a Cadence: 1. Cadence may be very small compared to a division in a large company such as an Intel but it is a very complex diversified company -- the strategic/operational experiences of a single product division don't directly translate. The learning curve for outsiders is very long. The most analogous industry to EDA is Enterprise-SW -- Even complex diversified Enterprise-SW companies such as SAP and Oracle have very different ECO-systems and business strategies. The experience doesn't translate very easily. 2. Cadence needs a CEO who will not need another 2-4 years to figure out what's real and what's BS? Believe me, there is a lot of BS that gets airtime, especially during these periods of transition. 3. The next CEO will likely have to be a bold thinker. Cadence should dispassionately assess what does it want to be. Is it really better off continuing to be a broad-line supplier or should it become a smaller, more differentiated company and spin out other businesses in the portfolio. The broad scope is actually leading to mediocrity across the portfolio. Cadence has a large portfolio of undifferentiated me-too products that provide Cadence with mass but not strength (differentiation). If it chooses to remain a broad-line supplier, even then it must evolve it's portfolio to remain competitive. 4. Unless the BoD can convince Carrol Bartz or a Joe Costello or even Tony Zingale to lead Cadence, they are better of finding an EDA veteran who has GM level experience of a large business in EDA. Here is a short list of names that come to mind: * Moshe Gavrielov -- Already the CEO at Zilinx so probably not interested * Sanjiv Kaul -- He was the GM of Synopsys' Implementation business during its growth phase in the late Nineties and early part of this decade. He has also significant leadership experience in the Verification and DFM parts of EDA * Roy Jewel -- I remember that ~6-7 years ago Magma started to gain traction in the market soon after Roy joined them as a COO after his successful stints at Avant and TMA before then. I remember it as I was at a competitor who was focused on Magma. Other EDA executives who could/should be on the short list: * Wally Rhines -- Via merger with Mentor * Manoj Gandhi -- Long, steady, successful stint at the helm of the Verification business at Synopsys. The SystemVerilog and VCS-NTB turned the tables on Cadence and Verisity -- Not easily done. * Joe Swicki -- Long successful stint as the GM of Mentor's Physical Verification + DFM business. Don't know much more than that. * John Chilton -- Played a lot of different Estaff roles at Synopsys

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