Is Altium onto something with its new tool pricing?
Altium's decision to dramatically reduce the price of its Altium Designer tool is interesting for a number of reasons, not least of which is the way company executives acknowledge that the firm is challenging the traditional model for board design tool pricing.
One of the things pointed out by Rob Irwin, product manager for Altium Designer, is that FPGA tools are available for free or at least very cheap. Likewise, software developers are accustomed to getting tools for very little or no cost. So how can a company like Altium, offering what it calls the first "unified design tool," expect to get more than $12,000 per license for a tool that supports the design of circuit boards but also includes integrated tools for programmable hardware?
Obviously, the FPGA vendors are in the business of selling FPGAs and don't want to make their tools cost prohibitive. But Altium argues that the price for board design tools has been established by their relationship to ASIC design tools, which have traditionally commanded higher prices because of their measurable value to chip designers.
So Altium cut the price for a perpetual license to less than $4,000 and are pushing a low-cost subscription model. No matter what the tools cost, the strategy is not going to work unless Altium Designer adds value.
But this move must be fascinating to people like analyst Gary Smith, who has in the past chastised FPGA tool houses for giving away free tools. It also must vex the big EDA vendors, many of whom often suggest that they don't command high enough prices for tools as it is.
We at Programmable Logic Design Line are curious about how readers feel about this. Is Altium onto something?