A commentary by Mitch Dale, director of product marketing at Calipto Design Systems, published on January 26 on this web site, made the point that although the intrinsic value of IP is its functionality, the model holds all practical value. This brought me back to my days as president and CEO of EIS Modeling where, from 1985 to 1992 (the last two years as HDL Systems) we built models of standard parts and IP. At the beginning each simulator had to have its own models, there were no standard languages, and simulator vendors contracted with EIS to develop the required models and sold them, or made them available to their own customers.
Today there are some companies, Denali Software and CAST are leading examples, that build models and sell them directly to their own customers. In this case they assume all the risks and reap the rewards of the free market.
Mr. Dale points out that the cost of verifying the models is high and although he offers as a solution a tool that can verify equivalence spanning different levels of abstraction, the risks and time involved in producing a correct model are still high. Thus the price of the model must reflect this fact and I often hear complaints that models are too costly.
The Free Model Foundry (www.freemodelfoundry.com) has taken a different approach for some years now. Owners of standard parts or IP contract with the Free Model Foundry to develop a model of their part and pay the burdened development cost. Once the model is certified, it goes into the inventory and anyone can access it free of charge. Such business model is more efficient for the industry because the developers make a guaranteed one time profit, the IP owner charges a fixed development cost to the project, and customers get ready access to certified models without having to pay what they consider overhead charges for using the IP.
I know that the word "Free" bothers some people. It has communistic, or socialistic overtones that go against the entrepreneurial spirit of competitive markets. And yet, everyone involved makes a profit: the silicon vendor, whether its product is real or virtual, makes a profit because the availability of the model increases sales, the Free Model Foundry makes a profit, and the users of the model decrease their development costs, thus potentially increasing their profits. And since the Free Model Foundry is guaranteed a profit it needs to build a lesser margin on its prices than a company that assumes the risks of not meeting its sales projections and thus loose money on one of its products.
Denali Software, CAST, and companies like them are to be prized for their contributions to the EDA industry and I certainly do not mean to suggest that they were wrong in adopting their business methods. But, just as we need to continue to develop tools that lower verification costs to be sure, we should also be open minded to new approaches to the EDA business.