Coverage of the EDA industry is shrinking to the levels justified by advertising revenues, endangering the quality of coverage. Changes are required by both EDA vendors and publishers.
Five days have passed since the announcement that at the end of this month Richard Goering's wisdom will no longer enrich the pages of EE Times. People have had the time to react, digest, and may be even resign themselves to this fact. Yet rebellion is in the air. People in the industry continue to call me to ask how this could even had been imagined, let alone implemented. It is the same kind of disbelief that followed the decision be Dataquest to exit the EDA business, launching Gary Smith into the world of entrepreneurship.
The reason then and now is the same: finance. It should not come as a shock to any of you that companies are in business to make a profit and that they can only persevere for a short time trying different approaches while loosing money before they decide they have exhausted all venues to profitability. Both Dataquest and CMP are business entities with the responsibility to maximize profits from their activities. And anyone who has paid attention in the last few years knows that EDA is not a very profitable business for either market analysis or publishing. In fact, it were not for the internet that has significantly lowered production costs, you would find that EDA would be scarcely covered by the press. Magazines like EDN and Electronic Design, together with the weekly EE Times, are dedicating fewer print pages to EDA every year due to a lack of advertising support, not lack of news. And even the on-line publishing is mostly run on a very tight budget due to the small advertising expenses of EDA companies.
Like in every other enterprise, people get out of EDA what they invest in it: and EDA companies do not invest much in advertising. Mentor has been the strongest supporter of EDA publishing, and Cadence has also dedicated budget to advertising in EDA related publication but they seem to be the exception. Editors have the responsibility to inform and educate, and as such we willingly publish viewpoint and commentary pieces from senior executives of EDA companies when the content justifies it. And we do so knowing full well that some of the motivation behind the piece is public relations and the hope to receive free advertising for the company. Isn't it time to give something back?
Is EDA advertising dead? Not if it finds A new life
To be sure, the lack of advertising is not due to shortsightedness or bad will on the part of EDA companies. Advertising dollars are spent for two main purposes: to increase the customer base and to improve the company stock price. Let me deal with the latter first. There are few public EDA companies and I dare say only four: Cadence, Magma, Mentor, and Synopsys even justify a serious look from professional investors. This is not to say that the other publicly traded companies are badly managed: their valuation is just not high enough to generate much interest in financial circles. And The four companies above would do better to advertise in the Wall Street Journal, Business Week, or Forbes, as an example, to serve this purpose. True, engineers do buy stocks, but in general they do not buy blocks of stock that can significantly impact the price.
As for the first purpose, with the exception of some verification tools, the license price of EDA products are so high that hardly ever can a company generate a viable lead from advertising: so why invest the money if the returns are not there?
The industry needs to improve the result of advertising in order to bring back the level of investment that will justify continuing to cover the EDA industry with professional attention to the field. Doing so requires the effort of both the EDA vendors and the publishers. Publishers need to find ways to improve the quality of feedback they provide to advertisers, and advertisers need to refine the message, both in content and format, they use for outreach. It is always easier, in the short term to cut costs: many editors no longer live in expensive Silicon Valley, even less are full time employees of the publishing company, and some companies have even cut expenses to the minimum (for example I did not see David Maliniak from Electronic Design at DAC this year).
I know that CMP is working hard to improve even while it did have to make drastic changes that will impact the quality of EDA reporting, at least in the short term. But Public Relations firms and EDA vendors also need to be more creative and find ways to contribute to the welfare of the industry while maximizing the message.
Unfortunately the result of the 2007 EDA Marketing Forum at this year's DAC are not encouraging. The panelists all acknowledged there was a problem but could not offer solutions and John Furrier, CEO & Founder, PodTech Network, (the EDA outsider) did not have any creative contributions to make. The EDA industry is not short on creativity: we will find a way to continue to take advantage of Richard Goering's wisdom, and we will find a way to continue to cover EDA in a profitable manner.