Tuesday, June 05, 2007

Q: Whither EDA? A: Private Equity?

Welcome to DAC week! I'm not there, but I expect to see a flurry of announcements and will be looking to keep up with things in EE Times.

This morning's paper has a story about "private equity" firms being interested in investing in Cadence: Cadence would offer buyer steady cash flow. And, an investing blog has Cadence Design Negotiates With Buyout Firms.

This is all at the rumor stage, but it's interesting in what it says about EDA. Rather than being a high-growth industry where one might make several times investment by picking the right hot technology, this is more about lucrative cash flows coming from software maintenance agreements.

If private equity firms become players in our industry, how will this change them? Will it lead to "slash and burn" of R&D, just trying to milk the recurring revenue from existing products? But how could such an approach fund the R&D to keep pace with the changes and challenges following from Moore's Law?

Update: An EE Times blog posting on dynamics of the EDA business. And, a YouTube interview with Gary Smith and his DAC preview. EDA gets hip!

More Updates: Richard Goering weighs in.

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