Product Marketing & the Butterfly Effect

I often feel that product marketing can simultaneously be an underrated and overrated function. More often than not, it suggests product goals, pricing, and positioning. Then the marketing department must defend those positions to both engineering and sales. However, both the engineering and sales departments can claim expertise for technology, purchasing patterns and customer desires. In my view, this is the difference between success and failure in the product marketing function – becoming a part of a successful well-integrated team. Product marketing should be a uniting force inside the company. Failure to bring in all voices and enabling enlightened decisions can have huge unexpected results.

When we founded Tangent Systems, I was an engineer. It was the extreme generosity of my co-founders that enabled me to also pursue an MBA at Santa Clara University while we were building Tangents initial products. I didn’t take a full course load, which enabled me to have the best chance to keep pace with my engineering and management responsibilities. When I did complete the MBA, I moved into product marketing, a natural transition for someone with a BSEE and an MBA. Eight months later, Tangent was acquired by Cadence, its very first acquisition. The deal closed in January 1989.

Tangent had two primary place and route products: TANCELL, a channel router-based tool that was the first timing-driven tool on the market; and TANGATE, one of the first commercial area routers. At the time of the acquisition of Tangent, Cadence already had two other channel routers, Symbad from ECAD, and Edge Place & Route by SDA. As Cadence had been formed only recently by the merger of these two companies, there were four product marketing directors – two each from SDA and ECAD. Rod Dudzinski and I, the two product marketing people from Tangent, were assigned to positions which kept us out of the process of deciding what to do with the collection of channel routing products. Bruce Bourbon, Cadence’s Executive VP of Marketing gave me the opportunity to work on product marketing of Design Framework II, as well as participate in all four strategic planning committees. It was not an unreasonable decision under the circumstances, and I have nothing but gratitude for the way that Bruce has mentored me over the years.

Ultimately the decision was made to go forward with Edge Place & Route as it was the only tool integrated in the Cadence Framework. This really amounted to an engineering view of the product. In fact, a deeper analysis of the customer base would have revealed that TANCELL customers were focused on ease-of-use and Edge Place & Route customers were the polar opposite, as they wanted detailed control and integration of the editor. These were two different markets, ASIC standard cell, and structured custom design. The insular approach to product marketing at that time missed this key market reality.

In 1991, Eric Cho, a marketing director not involved in place & route, left Cadence as one of the co-founders of ARCSYS. The first ARCSYS product was ArcCell which clearly targeted the former (and some diehard current) TANCELL customers. This opening made it possible for ARCSYS to gain traction. In time, Gerry Hsu would leave Cadence beginning what was termed “probably the most dramatic tale of white-collar crime in the history of Silicon Valley” by BusinessWeek. Avant! went public, based on a valuation significantly derived on stolen source code. The cash from the IPO allowed Avanti! execute a string of mergers. In 2002, Synopsys bought Avant! and settled the long running lawsuit with Cadence for $265M.

In the end, Synopsys had acquired so many successful product lines through its acquisition of Avant! that it briefly surpassed Cadence as the overall EDA revenue leader in fiscal 2003, and then moved to its current leadership position by 2008. Some of the dip in revenue by Cadence under the Fister regime might be attributable for this, but Cadence’s latest rise is a credit to Lip-Bu Tan’s leadership.

While Synopsys’ long steady increase in revenue is a bi-product of Aart DeGeus’ pragmatic mentality, there is little doubt that the Butterfly Effect of a small product marketing decision at Cadence in 1989 ultimately led to the Synopsys surge after the Avant! acquisition in 2002. Product Marketing decisions are critically important, even the seemingly little or obvious ones.

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