What Happened?
In its second acquisition announcement of the day, Synopsys disclosed yesterday that it has acquired assets from Synfora, Inc., a supplier of High-Level of Abstraction Synthesis tools (C/C++ to SystemC/RTL).
VDC’s View
Synfora is just the latest in a flurry acquisitions undertaken by Synopsys (which held over $700 million in cash and cash equivalents at the end of their fiscal year in October) to deepen its Electronic System Level (ESL) tool offerings. Most recently, Synopsys acquired both VaST and CoWare with the same week as it looked to enhance its solutions for virtual system prototyping and simulation (VSPS).
Also, it was only August of 2009 when Synfora acquired the Esterel Studio product from Esterel Technologies so that the latter could focus on its embedded software and systems modeling tool business with its flagship SCADE product suite.
So is this spike in acquisitions indicative of a reacceleration of adoption of or growing commercial opportunity for ESL tools?
Maybe.
But maybe not.
We think that this is primarily just a result of two main factors:
· The maturation of the current ESL tool technology (and lack of recent innovation) bringing the market to a consolidation phase where corporate scale and synergy are the primary drivers of profitability; and
· The lingering affects of the recent recession which made the decision for many SMBs to sell out or streamline their operations more compelling and also subsequently presented cash-rich buyers with an opportunity to fill out their portfolios at deep discounts.
Nevertheless, this continued reorganization of the ESL tools competitive landscape and the loosening pockets of VC investors should foster some additional opportunities to startups and new market entrants. At the same time, as more engineering organizations gain increased confidence in the economic outlook, we could enter a period where more companies begin to take a hard look at their entrenched engineering processes and tools and consider new options and methodologies to address the ballooning levels of system and software design complexity.
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