This is the second part of an interview I conducted with Ajoy Bose, CEO of Atrenta. The first part, that discussed his early career up until the time he founded Atrenta, can be found here.
Brian: It is often said that the large EDA companies do not innovate and that they leave the heavy lifting to start-ups. How do you see it?
Ajoy Bose: Large EDA companies have to innovate for a couple of reasons. They are very resourceful companies and there are a horde of new problems. We are on this brink of going from somewhere around the 32, 28 nanometer node to something much smaller, whether it be in the 20s or a lot of people are talking about going straight to 14. Itís going to create a whole host of new problems. And itís going to require innovative ideas, innovative solutions, and resources to stay in their leadership positions. Relying on startups to create the solutions that you can someday acquire is going to become a lot more difficult. Atrenta is interested in acquisitions but there are not that many companies out there, which are doing the right thing that fits your sweet spot of what you want to acquire. And Iím sure the big companies have a more difficult problem, because for them to acquire somebody, they probably need to see more success and more momentum than we do. We are a relatively small company, so we can buy a small company and then make it go. But unless you already have some momentum, when you get acquired by a large company, you are probably going to get lost in there.
Brian: Are you saying that the large EDA companies can only purchase larger EDA companies?
Ajoy Bose: There are two types of companies. The first is a company that already has the business momentum, or second, you can acquire a company that is small that doesnít have much business momentum, but has an interesting technology. For a large company, the two represent very different situations. In a large company, there are big products, which get a lot of attention from the sales force. A small product has a hard time getting the attention and the focus it needs. So they need to create a protected environment, at least for a while, to let these companies progress. When you buy a larger company with more business momentum, you want to throw it right into the middle of your sales force and have them run with it. So these are two very different conditions. Even at Atrenta, we see that. We are a much smaller company, but we see that as a challenge. Thereís a natural gravitation towards the bigger products, the more successful products. And I am also trying to bring up some of our next generation technologies, which are still in the investment phase. How do I give them enough of a shelter, so they get the right environment to grow up?
Brian: Where do you think EDA is going to be in 10 years?
Ajoy Bose: Iím going to speculate on a few things. I see some level of a reset being hit on the industry from a business point of view. The business model of EDA is becoming unsustainable. Itís unsustainable because of the current pricing and the business structures. They are not conducive to the level of innovation and support it needs to solve the design challenges. On the other hand, the design challenges will definitely come up on us. To me, itís like the irresistible force meeting the immovable object that will hit us some time in the future. This implies that there will be an explosion of some sorts. Now I donít know whether it will be an explosion in the dramatic sense or if itís going to be a somewhat simpler type of evolution. Somehow the problem has to be solved, and it will be solved. People will find ways around the problem. The other force is that the nature of design is changing in very interesting ways. This whole wave of IPs and design being more block based. You donít create designs one gate at a time, you use blocks and bigger blocks and subsystems and reuse. Thatís a pretty important force that is coming upon us, and the industry doesnít completely cater to that model or of that philosophy or that style of design. So, I see these big forces that will increasingly become more powerful, and thatíll force some change on the industry. Thereíll be changes to the business model; thereíll be changes to the way in which innovation is being done; thereíll be changes in the nature of startups and investment in the industry. I see all of this coming over the next 10 years.