Viewpoint

An Open Letter to the Electronics Industry Cadence's metamorphosis from a tool vendor to a design services company. by Joseph B. Costello

The 1990s hearkened a shift in the time-honored business model throughout the electronics industry. Pressures such as reduced time-to-market, increased costs, and more functionality requirements intensified to where traditional business and organizational structures within manufacturers required significant overhauls if companies were to survive.

The result has been a move toward a greater disaggregation of the industry. We observed you--our customers--take stock, identify your core competencies, and strive to become more efficient in the product development process.

It has become obvious to all of us that the 1980s EDA business model that served you is not the right model to address your needs today. Design automation tools are not enough. There is an obligation and the mandate to change the way we help you tackle your problems. In doing so, EDA must also transform the fundamental way we conduct our business, just as you have.

This is an opportunity to focus on providing expert help and resources on your complexity issues--and delivering results. EDA has been pushing in a new direction that offers a new value from a vendor relationship. It is critical that the EDA industry move closer to your business objectives, to better understand your core competencies, and to better understand how to help solve technology challenges.

This model has been successfully implemented A recent announcement from Motorola--its 7-Day CSIC program--accentuates the value of this approach. We assisted its semiconductor operations in reducing the turnaround time on a custom microcontroller design. This dramatic productivity improvement of several months per design to just seven working days came about by applying EDA technology from a variety of sources to the challenge, partnering with Motorola designers, and working side-by-side with them for almost two years.

The process transformation was the key added value, not just tools. And these benefits are easily measured from a resource, economic, and productivity standpoint.

Your core competency That's the catalyst for the shift inside Cadence away from being only a software tools and technology company to a complete solution company that offers a set of services required to make companies efficient and successful. We are certainly not all the way there yet, but feel that this shift must happen in order to keep pace with your own transformations.

The ultimate goal of EDA should be to allow our customers to focus on what they do best: architect innovative electronic product concepts. This not only improves their competitiveness, but drives new capabilities for end-users.

If the electronics industry is to realize the potential of the engineering expertise conceptualizing the future of high technology today, there must be continued transformation throughout all aspects of the way products are designed, manufactured, and brought to market. EDA is a critical component in that process. And, the lesson Cadence has learned is that we needed to offer more value and deliver against our customer's business direction, instead of focusing only on discrete tasks.

Joseph B. Costello is president and CEO of Cadence Design Systems Inc. (San Jose, CA).

To voice an opinion on this or any Integrated System Design article, please e-mail your message to michael@asic.com.

integrated system design  October 1996