The Virtual Component Exchange (VCX), until now primarily funded by the Scottish government, will emerge as a private company next week (Sept. 22) to be called VCX Software Ltd.
With Scottish government funding ended, the fledgling company must derive revenues from silicon intellectual property creators and purchasers by licensing software products.
In October 2000, the non-profit VCX organization launched the onlineVirtual Component Exchange, intended to be the first regulated buyer-to-buyer exchange for silicon IP. The idea was to create a virtual "trade floor" from which IP buyers and purchasers could negotiate and conclude deals. More recently, however, VCX started licensing software that operates on a company's own server.
"We are more or less closing down the central exchange part of the offering," said Andy Travers, VCX Software's CEO. "Essentially the IP business is built on paranoia, and most of the companies wanted to see a software solution in their own environment, so we've unbundled a lot of what was in the exchange."
The private VCX will sell database solutions to both IP buyers and sellers. Given that two thirds of the former VCX's funding came from the government-backed Scottish Enterprise, the new VCX has a long way to go to become self sustaining. But Travers predicted the new company can break even in about 12 months, and probably won't need additional funding unless it wants to accelerate sales and marketing efforts.
"We've got traction with a pipeline of customers we've been building over the last 12 months, so that's why we've chosen to go ahead now," Travers said. "Customers have said they want to see us as a private company before they invest."
Since Travers was CEO of the former VCX, there's little change in day-to-day management. One notable addition to the VCX board of directors is Simon Davidmann, founder and president of Co-Design Automation. He joined the board as chairman.
At the outset, the private VCX will continue selling two bundled packages that are already shipping to customers " IP Vendor and IP Buyer. The former includes the Storebuilder database, along with utilities for packaging, distribution, monitoring leads and licensing.
A commercial roadmap for Storebuilder will bring it added functionality, including alignment with Virtual Socket Interface Alliance packaging standards, Travers said. "The teenage, formative years of the IP providers is over now," he said. "Buyers are saying they need some control over quality and adherence to packaging."
The IP Buyer package includes an IP repository that allows users to search for IP, store information, set requirements, control access to deliverables, control and track requests for information and feed IP data into internal catalogs. Users get one free copy of the repository and can then license more, Travers said. He noted that services usually come along with the software.
While VCX expects to have about three IP provider customers for every IP user customer, the revenue split will probably be close to 50-50, Travers said. That's because clients on the user side have increased purchases.
The evolution of VCX into a private company is a planned strategy, not a desperation move, Travers said. "They Scottish Enterprise have a policy to make sure anything they create has some commercial viability and can stand on its own two feet. They don't want to fund things in perpetuity," he said.
"What we've seen from customers is that they don't want us to be a charity. They want us to supply solutions in a commercial manner," Travers said.
VCX is located in Livingston, Scotland, and expects to have a U.S. presence during the next three to six months, Travers said.