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VAR breathes new life into OrCad Line.

ROCHESTER, NY -- It's been a little over two years since Cadence Design Systems starting speaking with one of its leading VARs about taking over sales of the OrCad product line on a much larger scale.

Since January 2003, when the deal was formalized, EMA Design Automation (ema-eda.com) has held the majority stake in deciding the fate of OrCad. At the time many in the industry, including some users, speculated that Cadence was essentially administering last rites to OrCad. Instead, the opposite has proved true. EMA has revitalized the OrCad line, convinced Cadence (cadence.com) to invest in personnel and new products, and the company promises a large-scale release at the end of 2004.

PCD&M in June visited the Rochester headquarters of EMA. We found a company that has grown 600% in revenues over the past 18 months, far outpacing the broader EDA industry, which as a whole has ticked up only a couple points. EMA now has 96 employees, up from just a dozen at the end of 2002.

Much of this the company owes to the decision to place most of its eggs in the considerable OrCad basket. (EMA also offers a handful of other lines as well, including CAM350 from DownStream Technologies.) The former reseller of P-CAD and other tools has severed its relationships with most of those vendors to concentrate on the Cadence lines, which it says make up about 95% of its revenues. (The privately held EMA does not disclose sales figures.)

EMA was started as a family operation, founded by Manny and Nancy Marcano, and the husband-wife team retains titles as president and vice president, respectively, of the company today. Manny is the visionary, the salesman, constantly pushing the company--and those around him--to further heights. For now, Cadence doesn't seem to mind.

"I couldn't be happier with the results," says Charlie Giorgetti, corporate vice president and general manager, PCB Systems Division. "We're adding customers. We're enhancing the product, the IP we own. Plus [EMA's] been able to strike relationships with customers to enhance the product."

One of the areas in which EMA has convinced Cadence to invest is in component databases, specifically by bringing back ActiveParts, the online DB said to contain over two million parts. Manny Marcano says it took about 18 months to convince Cadence that ActiveParts still had potential and to bring it up to date. Says Giorgetti, "Smaller customers are looking for a complete solution, not just tool technology. Now there's a single door back to Cadence through EMA."

EMA currently does not charge existing customers to access the database, choosing instead to offer it as an add-on to its Capture CIS tool, in whose environment it works. Marcano sees this as an opportunity to extend EMA to a new group of potential customers, including IS and manufacturing personnel, which he believes will complement the company's main customer base--some 6,000 users of Oread.

At this juncture, EMA has become by far the largest reseller of Orcad. Steve Kamin, Cadence director of the OrCad line, estimates roughly 12,000 users worldwide. EMA's reach extends into Asia and Europe as well as North America. The VAR has also taken on the global fulfillment operations for the Oread line.

How has EMA been able to grow so fast? The story starts in 1989 when Marcano, a salesman at heart, interested in ways that he could bring product direct to customers (and equally disinterested in bureaucracy) launched EMA as a reseller for PADS, Viewlogic and P-CAD.

"I saw an opportunity to make EMA the major reseller in the mid-Atlantic area from New York to Virginia," Marcano recounts. Still growth was modest over the company's first 13 years. Starting with the Marcanos, Bob Kelleher and Walt Pyska, the company followed a path paved by other VARs until the deal with Cadence was struck, in 2002.

Recalls Giorgetti: "Going in, we had a large and loyal customer base. Given the characteristics of the products EMA was selling, what was the best way to continue that approach? We had a discussion to see how we could go about serving those customers so they felt assured that [OrCad] would be available."

Cadence disputes assertions that the decision to rely so heavily on EMA should be taken as a signal that Cadence lacks commitment to the product line. As evidence, Kamin points to Cadence's hiring of two-dozen OrCad programmers in India. And many of EMA's recent hires came over as part of the decision to take a greater stake in the success of the OrCad line.

Staying in Bed

Marcano's selling approach is to reach as many individuals within a company as possible. He says he takes the same approach with Cadence; that way, Marcano believes, it will keep Cadence from changing its mind and jumping out of bed with EMA.

The agreement is renewed annually based on performance targets, not all of which are quota-based, Cadence's Giorgetti says. "We look at it as an investment and put the same set of requirements on [EMA] as we judge all our businesses."

Says Giorgetti: "[Marcano] enjoys being with people, whether it's selling to them or helping solve their problems. He can synthesize a complex picture. He understands what it takes to be in business so that he's credible to us and the marketplace."

Marcano seems shrewd, in fact, in positioning EMA as a customer of Cadance, as opposed to just another VAR. Marcano is in essence is putting himself in position to request changes in tools, improvements in quality and other services. It was Marcano, for instance, who convinced Cadence to bring back the ActiveParts database, and he says he has a role in determining the frequency of OrCad releases.

According to Cadence, the final R&D is left to the company, although they do take input from EMA as well as other customers and other sources. Based on EMA's performance in 2003, Cadence has extended EMA's product line to include various Allegro simulation tools.

EMA has also taken advantage of its location. Far away from the traditional EDA hubs of San Jose and Boston, the company uses worker coops from the nearby Rochester Institute of Technology. As part of its curriculum, RIT teaches OrCad, giving EMA access to qualified labor at a low (read: free) cost. About 10 RIT students perform co-op work at EMA.

The good news for PCB designers, Marcano says, is that any thoughts that the job description will ultimately fall into the hands of EE or CS personnel are misguided. Marcano believes that the mainstream and RTU markets will continue to employ their fair share of individuals from trade schools and other vocational programs and not require individuals with master's degrees. "The bulk of our sales are six-layer product," Marcano says. "Everyone needs a toaster oven. Everyone needs a refrigerator." And EMA is banking that a healthy percentage of those folks will use products designed with OrCad.
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Title Annotation:EMA Renews Investment, Demand
Author:Buetow, Mike
Publication:Printed Circuit Design & Manufacture
Date:Aug 1, 2004
Words:1154
Previous Article:PCBs: on vacation, or headed for a fall?
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