Synopsys Doubles Down, Acquires CoWare

What Happened?

 

Yesterday, Synopsys announced they were acquiring CoWare, the third acquisition within the Virtual System Prototyping/Simulation (VSPS) market in the last week (Intel/Wind River is acquiring Virtutech and Synopsys acquired VaST).  Similarly to the other acquisitions, the terms of the deal, which is expected to close in the second quarter, were not disclosed.

 

VDC’s View

 

Although the VSPS market (a niche segment within the Electronic System Level (ESL) tool market) is small, it is has certainly generated a barrage of recent activity recently.

 

As discussed within our post on Friday, VSPS tools have been gaining adoption within the embedded market as engineering organizations continue to look for new ways to speed software development and accelerate time-to-market.

 

So with the majority of VSPS market revenue now in the hands of two players, Intel/Wind River and Synopsys, what’s next for this market that had previously been a bastion of growth for an otherwise stagnating ESL and, more broadly, EDA market?

 

What drove Synopsys to acquire CoWare, an ESL tools vendor that VDC estimates to be four times the size of VaST?  Could it also be their virtual platform offering, which by VDC estimates accounted for less than 25% of its revenue but was a strong driver of its overall growth?

 

Will the other two major players within the ESL/EDA market, Cadence and Mentor Graphics, now make a push into VSPS segment and/or reemphasize the broader ESL value proposition, looking to capitalize on the recent stream of media attention and the potential influx of uncertainty into VSPS tool customers?

 

After ARM’s divestment from ESL and the refocusing of its remaining System Generator/Fast Models tool, will another semiconductor or semiconductor IP vendor look toward this technology segment tool as a means to enable their customers’ success and/or as a direct contributor to a future P&L?

 

Also, given the addition of Simics to Wind River’s tool suite, will Green Hills refocus development/marketing around its Virtual Prototyping tool or will other software development/lifecycle management tool vendors look to add a VSPS offering to their portfolio?

 

This most recent acquisition certainly may raise more questions than it answers and it will take some time before the ultimate consequences of the past week’s activity unfolds. 

 

In the mean time, we would be interested in hearing your opinion on the recent market news so please submit your comments.

 

Related Posts:

 

• Further Shakeup in the VSPS Market – Intel acquiring Virtutech
• Synopsys Acquires VaST, becoming #1 in VSPS Market
• Embedded Market Consolidation Continues
• Intel to Acquire Wind River Systems ~ Update 2
• Intel to Acquire Wind River Systems ~ Update 1
• Synopsys to Acquire Synplicity
• Virtutech Announces Standards Initiative for Virtualized Software Development

Comments

[Gary Dare]

What is interesting about the Virtutech acquisition by Intel is that ARM did similar with SoC Designer, acquired by buying Axys. SoC Designer now exists at Carbon Design Systems and it's now clear if ARM still owns the IP or not. Regardless, it makes me wonder if Cadence will make a play for it, since it's not in Carbon's core competence.

Also, CoWare has SPW and BoNES from Cadence (acquired from a Comdisco unit) and its not clear if Cadence retains IP ownership. Cadence could take the money and run from CoWare's 'exit' (a VC term) into Synopsys, or take cash and its belongings (i.e., SPW).