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dylan.mcgrath
@Robinho--Wouldn't surprise me if Magma had at some point done an all you can ...
Robinho
so Magma never shot itself in the foot with all you can eat deals?
EDA 'co-opertition'—a new era or more lip service?
Dylan McGrath
11/10/2010 1:59 PM EST
John Bruggeman certainly isn't the first to suggest that the EDA industry may be its own worst enemy. But Bruggeman—who joined Cadence Designs Systems Inc. last year as senior vice president and chief marketing officer after 20 years in technology marketing that included a similar role at embedded software vendor Wind River Systems Inc.—has a noteworthy perspective if for no other reason than he really hasn't been working in EDA that long.
Speaking at the ARM Technology Conference Tuesday (Nov. 9), Bruggeman preached cooperation among EDA vendors and the entire electronics supplier chain. EDA vendors can do a much better job working together to solve problems that customers are "screaming about" instead of bending over backwards to wrestle every scrap of business away from each other, Bruggeman said.
"It's nonsensical to me," Bruggeman said of the way the EDA business rolls.
Bruggeman said the semiconductor industry and all of its suppliers—including EDA firms—need to buddy up in the face of a new threat/opportunity—a "continuous revenue" business model pioneered by Apple Inc. Electronics vendors are scrambling to evolve to a model that enables them to generate revenue regularly from each user through services and applications, rather than once every X number of years when they buy a new device, Bruggeman said. He added that the average iPhone customer spends roughly the same amount that the handset costs every 18 months on applications and subscriptions.
As electronics firms evolve to this type of model, chip makers and their suppliers will have to adapt, too, be said.
Critics have frequently derided EDA's so-called "Big Three"—Cadence, Synopsys Inc. and Mentor Graphics Corp.—for fiercely competitive practices that many say undercut the whole industry. Though none of the vendors in the space are eager to discuss pricing, it has often been said that EDA vendors are all too willing to cut prices to the bone for the sake of market share, ultimately reducing the size of the pie for all.
One of these critics has been Rajeev Madhavan, chairman and CEO of Magma Design Automation Inc., who last year charged that the EDA industry "shoots itself in the foot" through "irresponsible" behavior that stifles innovation and hurts overall tool pricing. Madhavan was specifically criticizing "primary vendor" deals, where EDA vendors get customers to announce that they have standardized on the vendor's tool set, presumably in exchange for a deep discount. The practice has been employed in recent years by Synopsys and, prior to that, Cadence. But in an interview earlier this year Madhavan said the situation has improved on the tool pricing front, and he credited restraint by the relatively new Cadence management team that took over in 2008.
EDA executives frequently pay lip service to the need for cooperation, but there is rarely any substance to it. But on Tuesday, Bruggeman—who stole the show in a "fireside chat" with Simon Segars, ARM executive vice president and general manager of PIPD—returned to the theme of cooperation again and again, highlighting among other things cooperation between Cadence and ARM on a reference flow for ARM's Cortex-A15 MPCore processor. (Bruggeman also held up as a shining example of cooperation Linaro, a nonprofit formed over the summer by ARM and other heavyweights to devise open source software based on Linux for SOCs.)
Of course, it's one thing for Cadence and ARM to work together. The two companies are tight. According to Cadence's website, the two have collaborated for more than 10 years on ARM-based design and verification solutions. In July, the two companies announced an expanded collaboration to develop an optimized system realization solution for ARM processors with the goal of creating an end-to-end design flow including a full set of interoperable tools, ARM processor and physical IP, services and methodology from embedded Linux to GDSII.
The real question is whether Bruggeman's call for cooperation will be—or even should be—heeded by executives at his firm and their counterparts at Synopsys, Mentor, Magma and others. The companies have a culture that has been formed by years of fighting each other tooth and nail.
Bruggeman was vague on what form such cooperation would take, but made it clear he believes much is at stake and that "co-opertition" is essential. "We have an industry problem, and it's going to take an industry to solve it," he said.
Speaking at the ARM Technology Conference Tuesday (Nov. 9), Bruggeman preached cooperation among EDA vendors and the entire electronics supplier chain. EDA vendors can do a much better job working together to solve problems that customers are "screaming about" instead of bending over backwards to wrestle every scrap of business away from each other, Bruggeman said.
"It's nonsensical to me," Bruggeman said of the way the EDA business rolls.
Bruggeman said the semiconductor industry and all of its suppliers—including EDA firms—need to buddy up in the face of a new threat/opportunity—a "continuous revenue" business model pioneered by Apple Inc. Electronics vendors are scrambling to evolve to a model that enables them to generate revenue regularly from each user through services and applications, rather than once every X number of years when they buy a new device, Bruggeman said. He added that the average iPhone customer spends roughly the same amount that the handset costs every 18 months on applications and subscriptions.
As electronics firms evolve to this type of model, chip makers and their suppliers will have to adapt, too, be said.
Critics have frequently derided EDA's so-called "Big Three"—Cadence, Synopsys Inc. and Mentor Graphics Corp.—for fiercely competitive practices that many say undercut the whole industry. Though none of the vendors in the space are eager to discuss pricing, it has often been said that EDA vendors are all too willing to cut prices to the bone for the sake of market share, ultimately reducing the size of the pie for all.
One of these critics has been Rajeev Madhavan, chairman and CEO of Magma Design Automation Inc., who last year charged that the EDA industry "shoots itself in the foot" through "irresponsible" behavior that stifles innovation and hurts overall tool pricing. Madhavan was specifically criticizing "primary vendor" deals, where EDA vendors get customers to announce that they have standardized on the vendor's tool set, presumably in exchange for a deep discount. The practice has been employed in recent years by Synopsys and, prior to that, Cadence. But in an interview earlier this year Madhavan said the situation has improved on the tool pricing front, and he credited restraint by the relatively new Cadence management team that took over in 2008. EDA executives frequently pay lip service to the need for cooperation, but there is rarely any substance to it. But on Tuesday, Bruggeman—who stole the show in a "fireside chat" with Simon Segars, ARM executive vice president and general manager of PIPD—returned to the theme of cooperation again and again, highlighting among other things cooperation between Cadence and ARM on a reference flow for ARM's Cortex-A15 MPCore processor. (Bruggeman also held up as a shining example of cooperation Linaro, a nonprofit formed over the summer by ARM and other heavyweights to devise open source software based on Linux for SOCs.)
Of course, it's one thing for Cadence and ARM to work together. The two companies are tight. According to Cadence's website, the two have collaborated for more than 10 years on ARM-based design and verification solutions. In July, the two companies announced an expanded collaboration to develop an optimized system realization solution for ARM processors with the goal of creating an end-to-end design flow including a full set of interoperable tools, ARM processor and physical IP, services and methodology from embedded Linux to GDSII.
The real question is whether Bruggeman's call for cooperation will be—or even should be—heeded by executives at his firm and their counterparts at Synopsys, Mentor, Magma and others. The companies have a culture that has been formed by years of fighting each other tooth and nail.
Bruggeman was vague on what form such cooperation would take, but made it clear he believes much is at stake and that "co-opertition" is essential. "We have an industry problem, and it's going to take an industry to solve it," he said.
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Mike Santarini
11/10/2010 7:58 PM EST
So does this mean Cadence is going to open up SKILL and Pcells? Put up or shut up...
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Robinho
11/20/2010 3:08 PM EST
so Magma never shot itself in the foot with all you can eat deals?
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dylan.mcgrath
12/10/2010 1:06 AM EST
@Robinho--Wouldn't surprise me if Magma had at some point done an all you can eat deal or two. But I really don't know for sure. Do you have specific knowledge of one?
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