PALO ALTO, Calif. It's not a memory chip company, but it knows the intimate details of just about every memory chip on the market. It's not an electronic design automation company, but it builds proprietary design tools. And it's hard to call it a full-fledged intellectual-property (IP) company, though it creates and sells register-transfer level IP.
That people find it so hard to put Denali Software Inc. into a neatly labeled box doesn't bother those in charge of this 70-person company, here. "It really doesn't matter," said co-founder and chief executive officer Sanjay Srivastava.
What does matter is that Denali has found a way to exploit the gaps separating memory chip makers and memory subsystem designers, and make a profit along the way. Its memory chip models have been downloaded by some 400 customers and Denali claims it has 10,000 to 12,000 installed software seats, where designers can use the models to build memory subsystems.
Now Denali is about to open Act II, taking what it has learned in building memory subsystems and applying it to chip-to-chip interfaces, backplanes and other communications protocols. And if the economic winds start blowing toward prosperity again, the move into communications interfaces could be a prelude to an initial public offering by the end of next year.
Denali's first job was to convince memory makers to send over models of all their different memory types something that system designers used to get from chip vendors themselves if they happened to call on a good day. It then collected the models into a database and linked them to its proprietary development tools. In some cases, Denali got a hand from customers such as Cisco Systems Inc., which helped persuade memory chip makers that hadn't yet signed on to start sending models Denali's way.
More recently, Denali started designing and selling memory controllers. A designer building a network processor, for example, could choose a ready-made interface when the time came rather than risk building one and tossing it out later if the memory requirement changed. Its latest Databahn controller for double data rate, for example, works with DDR-1 and can be tweaked later to comply with the coming DDR-2 spec, which is expected to reach volume production in 2004.
The company also furnishes development tools that work with any HDL or C-level development tools as well as cycle-accurate simulators. Designers who sign up can experiment with different memory configurations using Web-based tools and recall case histories to troubleshoot. Ultimately the tools help make sure that timing specs are met, which can be difficult since designers change their memory configuration four times on average for every chip design, said chief technology officer and co-founder Mark Gogolewski.
Now the company is about to branch off from memory designs. It has developed what it calls a "modeling and verification IP" for the PCI Express specification, the first of several interconnect schemes Denali will target as part of its Pure-Spec program, to be launched in January. Like memory chips, I/O standards are proliferating rapidly and Denali is betting that designers need a way to test-drive their options before they commit to silicon.
Of all the I/O schemes it plans to support including Rapid I/O and Gigabit Ethernet PCI Express is the youngest, having been ratified last summer, and perhaps the least understood. Already there are signs that different interpretations of the spec are starting to crop up.
"The biggest pain tends to be found in the interfaces that are new," Gogolewski said.
Eventually, Denali wants to provide the blocks of IP for those I/O standards, just as it provides memory controllers today. In that sense Denali is evolving into an IP company, but it's doing so in an unusual way. Normally an IP company provides blocks of circuitry and worries about service and support later; for Denali, this sequence is reversed.
The possibility of being perceived as an IP company, which these days often connotes a state of vulnerability, doesn't worry Denali. "I'll say it: We're an IP company," Gogolewski said.
Denali officials declined to disclose sales and revenue figures for the privately owned company, but Srivastava said the company has been growing consistently and is profitable. Denali started with just $10,000 and three computers and has never had to solicit money from venture capitalists. It became profitable soon after opening up shop, and got used to seeing its sales jump 30 percent or more each year.
This year, the company will only manage to increase its sales by 5 to 10 percent. Even so, Srivastava is betting, like many others in his position, that the outlook will turn more bullish in the next six months, setting the stage for an initial public offering by the second half of 2003.
Perhaps at that point the investment community will find a convenient way to categorize this still-amorphous company, which has come to symbolize a chip industry that is becoming more dispersed.