This is the second part of an expert panel talking about the intellectual property (IP) industry. In part 1, we discussed the concept of IP as a partnership between the supplier and the user. Taking part in today's discussion are Warren Savage, president and CEO of IPextreme; John Koeter, vice president of marketing for the solutions group at Synopsys; and Chris Rowen, Cadence Fellow and CTO of Tensilica.
EE Times: When the IP industry was first being formed, a lot of people would create a piece of RTL IP, hang out a shingle, and attempt to start selling it. They quickly realized that there was more to it than this. Have we moved beyond the point where this is within the realm of a startup?
Warren Savage: I don't think so. For example, we have our constellations program. It is a lot of smaller companies, very smart people with innovative ideas. There has been enough written about IP in the last 15 years, and the industry itself has matured enough such that there's been success stories written. People know how to put IP together -- better than they did in 1998. It's a much different environment. It's not the Wild West anymore.
EE Times: How does a company build up enough trust to get established?
Savage: Usually, it's the technology innovation that is the driver to make the customers make a leap -- they need that specific technology that's not commoditized. Early adopters are willing to work with them in a real partnership model. Sometimes technology is not fully baked such that it needs that close cooperation to get to that maturity level.
John Koeter: I think, if you're really doing complex IP, like physical IP and highly configurable IP, you have to have a certain scale to be able to build the quality into the product. Being able to afford to do that, to run all the tests and simulations and running the characterizations and split lots and get certification and so on and so forth, takes a lot. Having said that, though, there are many small IP companies that fill a vital niche. There's certainly room for many smaller companies to have a specialty that could do very well. In Warren's case, you resell other people's ideas, and they've already proven them, right? They've already put the investment in, and you've put more investment on top of it, so you can make that happen because of your unique business.
Chris Rowen: I don't think that the barrier to the IP business has gotten relatively higher. It's gotten absolutely higher. But I think that's true for every area of electronic innovation. The barrier to entry for new startups has gone up -- a lot. I think IP, particularly if it's a small team that has some unique insight into a particular vertical application domain -- a particular kind of technology that may allow them to encapsulate those insights into something they can license -- that's still a viable opportunity.
I think we also see the emergence of new kinds of intellectual property. We're starting to see, for example, in the case of Tensilica, the ability to extend something that is already there. They can create a set of processor extensions in a standard form that plugs into our processor. Now this customer can build an entire application-specific processor without needing a compiler team, an RTOS team, a debugger team, a simulator team, a hardware team, a verification team, or models working at the next level of abstraction. A lot of that becomes automated, and it distills out just their know-how.
* * *
Next week, we will look at the areas that are most ripe for increased IP adoption.