The writing on the wall just keeps on getting writ larger.
It keeps feeling like deja vu every time I listen to Jim Hogan describe the status of the EDA industry and what needs to be done to move it forward. He’s been saying it for years, and everyone needs to be listening very closely.
The full interview is here over at Ed Sperling’s blog, but here’s a summary. (The punchline is at the end.)
It was interesting to hear when Ed asked Jim what the missing technology pieces are within EDA. Jim answered:
- System level knowledge (ie. the end markets)
- Software knowledge (ie. how to support scalable software design practices)
- Supply chain management
Notice something? It’s not about technology! For progress to be made within EDA, the emphasis needs to be on the business of electronic design and how systems are developed.
Incorporation of software development into EDA:
Embedded RTOS and protocols are available, predictable and commodities; the challenge is at the application level and being able to predict behavior there. The industry as a whole has little to no exposure at this level.
Does Jim see a merger of two worlds:
There are too few players that have worked both sides to make this feasible. There needs to be greater interoperability and mutual sign-off between the development flows.
Acquisitions:
EDA buys a software company? No. Collaboration more likely. IP company aggregation more likely within EDA; especially as it relates to distribution.
Are there bargains out there:
The business rules have changed. Asset purchases are more likely rather than out-and-out M&A (re. Beach IP acquisition). In the past valuations were the stumbling block in Private-Private acquisitions. But given the current environment this will become less of a hurdle.
The Value that EDA Provides:
The value is not in EDA as it is traditionally thought of at all. For EDA companies to build value and move forward they need to take on more of what their customers currently do themselves. ie. instead of just providing tools, EDA needs to become more of a “General Contractor”.
Here are some ways that EDA could move forward in the value chain, with some ideas that I’ve added in:
- License sub-systems and not just IP cores
There are examples of this, such as MIPS. They have their platform strategy, but from what I’ve been able to tell, it hasn’t met with too much success. As before, this likely has more to do with everything around the IP rather than the IP itself.
- Do more of the design for the customer…maybe the whole design
Jim talked about this a bit in the interview. Some companies are doing this.
- Outsourced CAD
This builds upon the concept of SaaS and Cloud Computing that I’ve talked about in the past. Essentially, if EDA companies take on directly the maintenance and provision of the CAD team by providing their technology through SaaS/Cloud Computing models they’d be adding value to the customer while removing some of their Capex and Opex outlays. That should be a whole heck of a lot of value to capitalize upon.
- System Level design and development
This comes back to ESL, but it needs to be approached from the perspective of how systems are designed instead of how EDA tools are used and by whom. Again, it’s not the technology, but the use model and business models.
In summary, for the business of EDA to grow it needs to focus on two things:
- The business of EDA
- The way systems are developed
Recently, everywhere I look there is news and more news on how about the economy is doing. I constantly read about layoff, company closings, etc. And I hear about it in all sectors. If someone doesn’t by now know about what’s going on, he or she probably just doesn’t want to know.
