How Will Agilent's Acquisition Of Eagleware-Elanix Affect The RF EDA Market?

By Jim Pomager
Editor in Chief

When Agilent EEsof EDA consummated its acquisition of Eagleware-Elanix today (see related story), a noteworthy chapter in RF electronic design automation (EDA) software history came to an end.

For almost a decade, the companies in this market enjoyed a period of (relative) peace and prosperity. In fact, you would have to go all the way back to early 1997 to find the last record of an RF EDA tool vendor purchasing another (when Ansoft acquired Compact Software). And despite the well-documented philosophical differences between the major players in this space, it seemed like there was enough business to keep everyone happy for years to come.

Well it was obvious that the era was officially coming to a close when Agilent announced its agreement to purchase Eagleware-Elanix, firing a proverbial shot across the bow of its RF EDA competition. And the industry took notice. Message boards across the Web lit up with debates about the potential merits and drawbacks of the merger. (Share your opinions on this topic in the RF Globalnet Discussion Forums.)

Clearly, the acquisition has already had an impact. But when the smoke finally clears and the dust settles, what exactly will the RF EDA landscape look like?

In an attempt to answer this question, I spent the better part of a week talking to folks involved with the RF EDA sector, including executives from Agilent and Eagleware-Elanix. We discussed the effect of the acquisition on Eagleware-Elanix products, on Eagleware-Elanix (and Agilent) customers, and on the RF EDA market. Here's what I learned...

Eagleware-Elanix products won't disappear
The primary concern among participants in the Eagleware-Elanix Founder's Forum was the future of the Eagleware-Elanix product line. Would Agilent simply eliminate all Eagleware-Elanix offerings or merge them into existing Agilent products, as the company (then part of HP) did when it acquired EEsof Inc. in 1993. I posed this question to Neil Martin, marketing and services manager for Agilent EEsof EDA, and his response was adamant: "We have no plans to remove any products or consolidate them. When HP acquired EEsof, the initial plan was to merge products together. We have no plans to do that here. In fact, we don't want to do that."

Actually, the fact that the companies have complementary product lines was one of the keys to the deal, Martin added. And Eagleware-Elanix president and CEO Todd Cutler agreed: "There are certainly many features that Agilent offers that Eagleware-Elanix does not, and there are features Eagleware-Elanix offers that Agilent does not." Specifically, Agilent believes that Eagleware-Elanix's strengths in circuit synthesis and RF architecture design will bolster the EEsof line.

Does the customer win or lose?
At least initially, the merger should have minimal impact on engineers currently using Agilent or Eagleware-Elanix software, especially given Agilent's intention to maintain both sets of existing product lines. But by cross-pollinating products across the combined global customer base, Agilent hopes to ultimately put new technologies into the engineers' hands. "Over time, both customer bases will have access to a larger range of technologies," Cutler stated.

Whereas Agilent's Advanced Design System (ADS) is generally considered a complex, high-end (i.e., expensive) solution, Eagleware-Elanix's GENESYS is regarded as a less-costly, easy-to-use tool. So by adding Eagleware-Elanix products to its offering, Agilent can address the needs of a previously unreachable audience. Martin summed it up: "We can now offer a low-price solution to smaller companies who thought they couldn't afford Agilent products."

Eagleware-Elanix founder and chairman Randy Rhea pointed out another way that the eventual intertwining of Agilent and Eagleware-Elanix tools might benefit design engineers. "In addition to expanding the range of choices available to customers, combining the two companies will ultimately bring about improved interoperability between their toolsets," Rhea told me.

Not everyone is painting such a rosy picture. "From the customer's perspective, it doesn't make sense," Ted A. Miracco, executive VP of rival RF EDA tool supplier Applied Wave Research (AWR), said when asked about the acquisition. "I think people purchased Eagleware-Elanix products to a large extent because 'they were not Agilent products.' They wanted economical solutions from a small and responsive supplier, which Eagleware-Elanix was."

Himself a former EEsof employee (he left the company when it was acquired by HP), Miracco is also skeptical about Agilent's promise to continue supporting Eagleware-Elanix offerings. "Having personally lived through the HP-EEsof merger, I believe that the chance of the Eagleware-Elanix culture or products surviving within Agilent is extremely unlikely," he said. "Agilent doesn't know how to manage a low-cost supplier, and I think their overhead and bureaucracy will lead to a lot of turnover of Eagleware-Elanix customers."

Market battle lines are drawn
Miracco concedes that a merger in the RF EDA market was overdue, and he believes AWR is poised to take advantage of the post-merger landscape. "I'm not surprised that consolidation is taking place in the RF EDA space, since there have been far too many suppliers chasing a relatively small market," Miracco told me. "The management team at AWR is excited about the acquisition, because it creates an opportunity for AWR to reach out to disenfranchised Eagleware-Elanix customers." In fact, he claims that AWR has already received a number e-mails and phone calls from frustrated Eagleware-Elanix customers inquiring about AWR alternatives.

For this very reason, Dr. James Rautio, president and founder of electromagnetic (EM) analysis tool supplier Sonnet Software, thinks it behooves Agilent to continue offering Eagleware-Elanix products -- at Eagleware-Elanix prices. "Agilent's big weakness has always been the low-price, easy-to-use niche, which is an area that AWR has successfully exploited. If Agilent eliminates the Eagleware-Elanix line, then that niche is left wide open for AWR," Dr. Rautio told me. "If, on the other hand, Agilent decides to keep the cost-competitive software at roughly the same price, and applies their marketing force to Eagleware-Elanix products, it will be serious competition for AWR in that space.

"My guess is that Agilent will keep Eagleware-Elanix firmly in that niche, then make sure there is a good migration path from GENESYS to ADS for customers that might eventually want a high-powered, high-priced tool," Dr. Rautio added. "However, I am certain that AWR will aggressively defend its territory in that part of the market. It should be interesting."

What the future holds
In my opinion, Agilent will continue to offer all existing Eagleware-Elanix products, at least for the immediate future. Eventually, though, certain products will be merged and overlapping technologies will vanish. Via Agilent's global infrastructure, more design engineers will now have access to GENESYS. Some current GENESYS users will see the benefit of upgrading to ADS; others will defect to AWR (or some other supplier). Sooner or later, all RF EDA suppliers will go to an open-source model, making their code bases available... Ok, now I'm getting carried away.

One thing that seems certain is that Eagleware-Elanix will not be Agilent's last acquisition in this sector. When I asked him if we should expect more acquisitions in the near future, Martin replied: "In addition to internal development, our strategy includes pursuing alliances and OEM agreements to offer RF solutions and complimentary products in response to customer demand and needs. Acquisitions are definitely part of this strategy." Combine the heated acquisition climate in the microwave/RF world with the news that Agilent has since sold off its semiconductor assets to focus on its measurement business (see related story), and further Agilent EEsof acquisitions are not out of the question.

Stay tuned...

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