RS Components has already set the agenda with DesignSpark PCB, and new entrants are going to have to work pretty hard to find differentiation.
With a passion for empowering designers, I'm thrilled at the rising tide of free Schematic and PCB Layout tools. But I can't help but wonder whether the established ECAD industry can afford "free"?
Probably the single biggest game-changer has been RS Components' DesignSpark PCB product. While this is a trimmed-down version of another (non-free) product, it represents the strongest threat to the established ECAD industry due to its "unlimited" capabilities.
DesignSpark PCB's business model is built on the back of increased component sales; it continues the supply chain connectivity mantra that Farnell began when they acquired EAGLE PCB. So what does this mean for the "big four" ECAD vendors (Altium, Cadence, Mentor, and Zuken)? Maybe Max Maxfield's recent question about whether PCB Layout Designers are becoming Endangered Species should also be asked of traditional PCB Layout Tools.
Of course, there is no need to panic as electronics design is hardly likely to go away overnight, but the emergence of free tools does pose a difficult conundrum for the establishment. Even as they recognize the encroaching waves, jumping on the free (or even low-cost) design tool band wagon would require a substantial shift in their operations.
With expensive, high-value sales teams and reseller networks, they can't sell an entry-level offering through the same channels because there isn't enough margin, and no self-respecting salesperson is going to sacrifice a $10,000 deal on account of a $100 product. So you can almost guarantee that the entry-level product will never be properly represented if existing channels are used.
The alternative is for established vendors to develop alternate channels that are better geared to volume. Maybe the tools will sell themselves on Amazon, but I doubt it. As for the component distributors, Mouser is one notable distributor that currently seems to have been left out in the cold, so maybe we'll see a scramble from the "big four" to strike a deal with them.
But this still doesn't deal with the elephant in the room -- free tools. Even if an alliance between ECAD vendors and the last available component distributors can be found, DesignSpark has already set the agenda, and new entrants are going to have to work pretty hard to find differentiation. Anything other than free is going to be a very hard sell indeed.
Maybe the ECAD vendor can scrape back some pennies by getting the distributor to part with a few $M each year, but even that is going to look like a pretty dismal blip on the P&L statement. This may still not be enough to compensate for the cannibalism of their existing high-end products -- not to mention the resource costs in creating, marketing, and supporting a whole new design tool.
The industry is set for a pretty substantial shakeup. There are glimmers of hope from the emerging business models, but I don't think we are there yet. If we assume that free ECAD tools will soon be "good enough," then it's my view that the next target for business innovation will be in the realm of supply-chain management and alleviating designers from the burden of turning electronics designs into physical assemblies.
Click here to see a more in-depth look at my musings on this topic. In the meantime, what do you think about all this?