Editorial

Will Internet Change the Basic EDA Business Model? The business models for the EDA industry will need to be re-evaluated in light of new paradigms in data communications. by Jonah McLeod

I was taken by a conversation I had with A. Richard Newton. He will be the keynote speaker at the Design Automation Conference this June in San Francisco. Newton, who has been active in the design automation industry since its inception, has the perspective of an outsider from academia looking at the industry. He is head of the Department of Electronic Engineering and Computer Science at the University of California at Berkeley.

Newton says that design automation industry growth has been inhibited by the lack of a common platform upon which third-party suppliers can build product. He cites the success of the DOS/Windows and Intel hardware standard as an example of what the design automation industry is not doing.

Several attempts have been made to set a standard, he states, citing the early framework from Cadence Design Systems (San Jose, CA) and the Falcon Framework from Mentor Graphics (Beaverton, OR). Both failed because the sponsoring companies refused to put the frameworks in the public domain at no charge.

This lack of a standard has created a stunted industry worth $1 billion servicing an electronics industry that is over $100 billion. Newton reckons the design automation industry potentially could be 10 times larger.

Instead, the industry consists of four large companies and numerous smaller companies. The larger companies have grown by purchasing smaller entrepreneurial companies that have developed new tools. The cycle of acquistion is repetitive.

A large company acquires a new start-up and spends up to 18 months integrating the start-up's tool into their larger tool set. Thus, more R&D is spent integrating the new tool than in extending its feature set. In general, large companies spend so much of their R&D effort integrating new tools and upgrading their existing tools, they have little time to innovate new tools.

Furthermore, they have a disincentive to make significant innovations to existing tools. Take a major improvement to an existing behavioral simulator, for example. If a large company makes such an innovation, existing customers expect to receive it as part of ongoing software maintenance rather than pay a new license fee.

Newton says that a new force is coming onto the scene that could change all of this. It is the Internet, and what it promises to do is create the framework that is currently missing. At the same time, the network will dramatically change the way software is sold.

Today, Newton says, for several tens of thousands of dollars, users receive a compact disc containing programs and support documentation. However, with instant communications on the Internet, it is no longer necessary to own software and have it resident on a local workstation or server.

It is now possible, he believes, for tool vendors to offer their software for lease on the network. In this manner, a user can load his design description onto a remote server and perform simulation, logic synthesis, etc. on the remote host. He pays only for the amount of time he uses the tools. A completed netlist is then returned to the user.

To make this happen requires a common API that will allow the user to incorporate the remote tools into his local design tool environment, run the remote program, acquire the result and return the resulting file back to the local system. Newton believes it is only a matter of time before one is forthcoming. We hope so. The industry needs a good infusion of growth.

Jonah McLeod is editor-in-chief of Integrated System Design.

integrated system design  June 1995