Kiran Bulusu’s Blog

I was just thinking why cant the Marketing folks in EDA companies have a agreement with the Semiconductor companies that when a chip goes to production , their logo is displayed as well. Something like Designed using Magma Design Automation etc., I cant think of reason why Semiconductor companies wont  allow that. I think it will create much more buzz than a press release. It will also expose the EDA industry and the company to outside world . The role played by the EDA industry right from RTL-GDSII and post silicon debug is very important and cant be downplayed .

For example, when we look at the IPOD and scrolldown to a section (something like about us ), you can typically see that the chip is designed by Portal Player etc. So, if Apple allows Portal Players logo to be on IPOD, why cant they allow  EDA company name to be there. Yes, I understand that it is not as simple as it sounds as many chips deisgned by one company gets integrated into another company’s SOC , but still, it can be done through
mutual/joint agreements.

It helps EDA companies to get the recognition they deserve and also it helps EDA companies to attain a brand similar to what product based companies have.

I often see some startup companies especially EDA companies ,which have big aspirations of going for IPO sometime down the lane ( ofcourse every CEO with help from CFO talks about taking the company to IPO)….but if we analyze how some companies are run in terms of their strategies, it wouldnt take much time to realize that their goals are not aligned with their vision….these startup companies forge a relationship with biggies in their field as partners/alliance . They dont (dont want to ) compete with the big companies in terms of their product offerings..they offer complimentary products which go along with the main stream products…essentially they are nice to have and not must have…so how can these companies grow and build a good revenue stream??

For example, take four companies companies , startup company A, a relatively young company B which is still pre-IPO , some tier II company C ( normally categorized based on revenue) and a tier I companies D and E . Company A has many products which all might be integrated and sold as suite of tools or maybe point tools which can be sold seperately depending on how the sales folks want to … all/most of the products they offer work along with the products of C,D and E. The current situtation in the EDA market is, company A is building relationships with B,C,D and E and is positioning itself strategically sothat it has no competitors and it doesnt get biten by the aggressive Tier I or Tier II companies….But what company A is not realizing is..this way of forging relationships doesnt help the company in long run as they wont have much space to grow and they cant increase their revenue stream by just refining their existing products or adding nice to have features…Company shouldnt get lost or spend all of its energy on how to survive…it should rather formulate a strategy which helps the company to survive and generate revenue ( by having a cashcow product) and then it should be able to quickly have products which can differentiate itself from the rest and compete either alone or with the help of alliance it has formed earlier…

In our example earlier, If companies C,D and E cancel their partnerships and they start to offer the features which company A has planned, it doesnt take much time for the company A to look for potential buyers… Companies can forge relationships and alliances, but when creating strategies, it has to do it in such a way that it has space to grow and the alliance helps it in creating even more powerful products and has created uncontested market space…. To create that you need :

1. World class R&D team : From my experience, I see that customers prefer products which which cuts costs ,time or both if you are in EDA…There are many EDA companies whose value proposition lies in simple economic fundaes like reducing time and money spent on other main implementation based tools…there are about 10-12 startup companies operating in EDA space
with this value proposition..

2.Marketing ppl who can brandize the product, a good example is that of XeroX…When they entered India, they marketed it so much..ppl often refer Photocopying as Xerox..you can see Xerox machines everywhere ( not photocopying machines!!) …whatever you do, the customer
should be able to feel it…it should revolutionalize the way your customers think about it…Apple IPOD is one decent example,

3. Sales folks who can sell ice to eskimos and

4. Appln engineers : who can help customers and make them realize the product value ..thereby bringing more business/revenue to the company..remeber the 80/20 rule…80% of the revenue comes from 20% of the customers…so make these exisiting customers happy and bring in more customers by delivering the product value…

and Ofcourse, you need to have good CEO who has vision thats executable and backed by good executives who can strategize the business and take it down the straight path …path which leads to IPO…..

The De-Coupling point principle put forth by Clayton M. Christensen, Christopher S. Musso and Scott D. in their article “MAXIMIZING THE RETURNS FROM RESEARCH”, says that “The company developing a new technology must plan to integrate forward from the point at which a new technology is developed, across every interdependent interface in the chain of value-adding activities out to that point at which there is a modular interface with the next stage of value-added.” They say that, it is the activity just before the decoupling point where the most attractive profitability in the value chain can be achieved. The reason for this is that performance in a modular product is not determined within the product’s architecture, but within the subsystems from which the modular product is assembled. At the stage of value-added just before the decoupling point, performance differences are determined primarily by the interdependent architecture and less by the components that are used.

EDA industry is very competitive and is more technology driven than any other field in the IT industry. As the design complexities increase, designers demand more innovative and complex tools and as the time to market pressures are increasing (for many chips it is less than 6-9 months), EDA companies are always under great pressure to roll out sophisticated tools to understand and solve design complexities . Having said this, it can be easily understood that EDA industry works in tight integration with the Design companies and the manufacturers. Each chip is designed in a different way and the Methodology engineers propose new
Methodologies and flows which indirectly puts pressure on the EDA industry.

Now let’s look at various perspectives: An EDA Startup Company can roll out sophisticated software for a specific stage in the ASIC/FPGA/Structured ASIC design flow. The problems typical EDA start-up companies’ faces are: They have to make sure that the algorithm on which they built the software delivers both the performance (how fast the tool can analyze the design sources say RTL or Netlist) and the design capacity it can handle (20 million gate design is very typical now-a-days), the output of the tool should be compatible with the tools from the four big giants (Cadence, Synopsys, Mentor and Magma) so that the designer can take the output from the tool and use it in the next steps of the design flow with the implementation tools. The tool interoperability issues are always a painful task for the EDA engineers.The success rate for the EDA startups is very less for the reason said earlier. They have to see a way where their tool suite can be seamlessly integrated. So for EDA startups, the De-Coupling point lies in effectively addressing the design complexities, able to handle higher capacity and performance that the competitor tools. But the companies have to keep in mind that de-coupling point might shift to higher point in the value chain.

For an already big company like Cadence, Synopsys and Mentor, their de-coupling point doesn’t lie in the new tool offerings, but rather understanding the design flow gaps in the already offered tools and quickly filling it out and thus enabling a better and fully integrated platform.

If anyone out there has any ideas/opinions on the de-coupling point…please comment….