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There is an excellent post by Paul McLlelan Crushing fixed costs that describes very elegantly semiconductor economics as it relates to operating and capital costs of doing business.  He notes that…

“There is a trend that the current downturn is only going to accelerate: to turn fixed costs into variable costs. Often this is what is behind outsourcing of some capability.”

While the main thrust of the discussion was driving the conclusion that semiconductor design outsourcing will accelerate, I would look in a different direction for greater savings - the data centers within semiconductor vendors.  This actually ties together a perhaps unintentional thread of Paul’s.  He discusses Amazon and Cloud Computing as an example of a trend to increase capital efficiencies in other industries.

On this blog I have argued that these two threads should be combined.  Specifically, in a gradual move of “well-matched” parts of the EDA flow to a SaaS (Software-as-a-Service) model, semiconductor vendors are able to take a very large capital expense and turn it into a pay-as-you-use operational expense.  This will enable companies to redeploy savings to functions that drive forward their value proposition and differentiation.  ie more designers designing better chips faster.

Back in the 90’s there was the start of the move to the “Fabless” Semiconductor company (that was ridiculed in the 80’s and up until Broadcom started showing success).  Using this current economic environment as a catalyst, I predict that in the next decade we’ll see a move to the “CAD-less” semiconductor company. 

Intel Data Center Utilization and Growth

As an illustration of the imperative, the above chart was presented by Intel at the Intel Developer’s Conference a while back.  It has been calculated that the Net Present Value of this data center is somewhere between $200 million and $300 million.

The move to the cloud will not be a step function, as the hurdles are many, but a gradual transition.  And just as Broadcom showed the way in the 90’s, the company to best take advantage of the opportunity may not be one of the current leaders in the industry.  Someone from the middle of the pack or a cash-strapped startup could use this new business structure as a competitive advantage to take the lead.

For those companies looking to discuss how Xuropa can help facilitate this transition, please contact me.

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Posted under Xuropa, business, industry, marketing

I’ve been writing a lot about Twitter recently, as have a lot of other people as it continues to charge into the mainstream.  Read What is Twitter, and Why Should I Care? and you’ll get an idea of where this is going, but we have some recent data collected by The Nielsen Company that talks to its increasing relevance as a communication channel:

It’s growth in terms of users is astronomical:

Fastest Growing Community in February 2009

As Nielsen note, this growth does not take into account the number of mobile users, which could increase these stats incredibly.  Twitter’s use-model lends itself to mobile use perfectly, and is a very valid platform.

There is one piece of this story that I’d disagree with though: the title, “Twitter’s Sweet Smell of Success“.  While Twitter has raised an impressive $55M since its founding, it has yet to find a business model.  I’m sure there’s one out there, and it does not have to be solely ad-driven.  But until they have found the secret sauce to generating revenues, the sweet smell of success is still only appreciated by its users.

Posted under industry, marketing

Searching through Twitter I came across an intriguing post by Josh Bernoff (Forrester Analyst, author, and blogger).  New research: B2B buyers have very high social participation.

I think that we’re past the point now where people deny the importance of the web in the selling process, but for those still in doubt you have to read these statistics.

Social Technographics of Technology Decision Makers

Some statistical highlights:

So, the bottom line - if you want to engage the decision makers in your target customers you need to be using social media.

There are different platforms and tools for different purposes.  Your challenge is to build marketing processes around these platforms and leverage the tools available:

1. Xuropa: it’s the only online community dedicated to electronic design.  Professionals, products, companies, news, and the tools to build your own community within Xuropa.
   - Register your products so decision makers can find them.
   - Ask your existing customers to write quick reviews or rate your products - this is important to help prospects find you and immediately get a valid and objective opinion of your product.
   - If you really want to engage your customers, provide an Online Lab where they can try the products out for themselves!
2. LinkedIn: participating in groups would be useful, but this is mostly used by people looking for jobs or contract work.  I don’t see too much product or technology disussion here.
3. FaceBook: A social network ostensibly.  Not much in the way of serious technology discussion that I’ve seen.  However, still an opportunity to engage.
4. Blog: You need to be positioning your company and products within the context of your customers.  Answer questions that they would ask, like “why would I use this technology?”, and “what problem does this technology solve”.  Don’t come at your blog from a marketing pitch perspective.  That won’t help you from an engagement or an SEO perspective.
5. Twitter: That is an “interesting” way to engage that I’m still trying to get the handle of myself.  It has helped me a number of times, but it’s a tough thing to systemize currently given the limitations of the tools available.

It’s not too late to get started…but you have to get started!  Now!

Posted under Features, Xuropa, industry, marketing