Three days later, Cadence announces the spin-out and it's just a Wall Street accounting trick. The "new" Cadence consulting company, Tality, is going to be 80 percent owned by Cadence. Sheesh!

So now I have to eat my own words on that "Bullish On Cadence" piece.

I've been against Cadence Spectrum Services since day one. Why? Because as a design engineer, I felt it set up a situation where you had to watch your back around the Cadence salespeople. If your project was in trouble, and those sharks smelled the blood, they would badmouth you personally so they could get their own consultants in to do your job.

For engineering managers, it was bad news, too. I remember one case years ago, where one Nortel Canada manager was struggling because Cadence Spectrum had hired his own engineers away from him and was trying to rent them back to him at $300 per hour! This wasn't unique; at conferences, engineers would pull me aside and tell me similar stories from across the U.S. and Canada.

But the biggest reason I was against Cadence consulting was that the more outsourcing caught on, the more it hurt the Cadence mother ship. Anybody can get a rented chip design team together for cheaper money than Cadence because they don't have Cadence's overhead-plus they can use the "best" tools instead of being shackled to Cadence tools. Look at ADD, Annapolis, ASIC Alliance, ASIC Designs, ASIC International, Comit, Duet, E2E, Florida Micro, GDA Tech, Highgate, I2P, Intrinsix, KSA, Mint, Oasix, Papillion, Qualis, Seva, Silicon Engineering, Silicon Partners, SIS Micro, Starburst and White Eagle. They range from 270-person shops like Intrinsix to three-man shops like Papillion. The only way to compete is to very seriously discount Cadence tools as part of the deal-effectively stealing Cadence tool sales in exchange for Cadence consulting sales. Stupid idea for an EDA business. In November 1998, Cadence had to lay off one-third of its 1,800-person consulting division.

In 1519, when Cortez came to the New World, he burned his ships to commit his small army of 550 soldiers. They knew there was no turning back. Cadence needs to do this with Tality, permitting Cadence to thrive by making better EDA tools and Tality to thrive by doing better consulting. Otherwise, it's the worst of both worlds for Cadence.

John Cooley runs the E-mail Synopsys Users Group (ESNUG), is a Contract Asic Designer and loves hearing from engineers at jcooley@world.std.com or (508) 429-4357.