Traditionally, the big EDA players have not been capable of developing viable technology. Rather than fostering innovations developed internally or by startups, big EDA companies have continued to push legacy software and have acquired startups only to kill off their technology. This type of culture has been responsible for the bottleneck in EDA technology advancement.
Two cultural shifts are key to breaking the bottleneck. The first is an open and aggressive corporate culture, with a team that has the awareness and foresight to retire old products after they've become obsolete. Magma, for example, has rewritten parts of its software code over the years and regularly has two teams competing against each other to develop improvements.
The second shift is to focus on nurturing startups. It's harder today to get funding than it was in the early days of Ambit Design Automation, a company I founded in 1995 and that was acquired in 1998 by Cadence Design Systems. Every venture capital firm that I solicited rejected me. Ambit was funded by a group of individual investors. Conversely, when Magma Design Automation went looking for funding in 1997, it took a mere 45 minutes and a 10-page business plan to raise $2 million. In total, Magma raised $113 million before its successful IPO in 2001 and invested more than $60 million in developing the integrated solutions we provide.
These fund-raising scenarios are unimaginable today. Not only was it easier to raise capital in the past, but companies like Ambit and Magma had years to develop a product. A startup today has less time to develop a product and reach profitability. It needs a weighty business plan that proves in great detail what, when and how the startup will deliver a useful product within 12 months and make money. Venture capitalists need proof that the product is good enough to replace existing software or hardware because EDA consumer budgets aren't growing.
My experiences at startups LogicVision, Ambit and Magma have proven to me that it's imperative for EDA leaders to take an active role in helping the industry grow. A startup-friendly industry culture should be the mantra we live by.
Magma has a program designed to provide seed funding, direction and guidance to fledgling entrepreneurial companies. In return, these EDA startups write software that fits our strategy for a unified design flow model. When the software works as intended, we'll look at possible business relationships. At the same time, we continue to develop radically new technologies internally that reduce the design costs of complex silicon chips.
The economic climate will improve and the EDA industry will need new ideas, technologies and methodologies. EDA industry leaders must change their corporate culture to be ready for the upturn.