The idea of getting "volume royalties" is bizarre: It's like a ball-point-pen manufacturer asking for royalties from everyone copyrighting something they wrote with that pen.
Tool output belongs to the tool user, not to the tool maker.
Actually, "belongs" is a bad word for it, too: There is no such thing as "intellectual property". The usual application of this silly term is to copyright and patent. However, both copyrights and patents are administrative decisions, not ownership decisions: They are Federal agreements to help the originator control COPYING (copyright) or USE (patent) of ideas. One might as well say that, because a court assigned custody of a child to a father, the father "owns" the child. "Offspring property"?
If EDA vendors want to improve their cash flow, they should start by dropping deceptive, misdirective ideas such as "intellectual property".
It's a terrible misconception that all semiconductor companies have fabs. For every semiconductor company with fabs, there are 10's of fabless electronics design companies which make a lot of money. And with the advent of the state-of-the-art DFM tools, it's no longer a PC with electricity that EDA companies need but sophisticated research involving partnership with fabs and fabless design companies, which involves significant costs. Without EDA, the semiconductor companies cannot even survive, yet they underpay them significantly. What's necessary is the need for EDA companies to speakup for themselves and communicate more with the design companies, asking for their rightful share. It doesn't hurt to hire Marketing personnel from other business areas to bargain better with the misery design companies.
Yes, it's apples and oranges, but the EDA industry makes virtually no investment in communicating their value to their customers, nor do they make any real effort to hear what their customers want.
As much as you may think EDA invests in marketing, the numbers don't add up. The entire industry has, at best, been flat in marketing expenditures since 1999. Mentor has made some effort to increase expenditures, but Synopsys, Cadence and Magma have been cutting every year for the past 5. Sales, on the other hand, has been increasing annually for the past 5, but the complaint from that side is "no one knows what we do."
Rajeev Madhavan mentioned this lack of communication, when he was elected to the EDAC board last Spring. He said the industry has done a poor job of marketing for years and needs to explain its value better. But that's not going to happen with the industry's current direction. We're going to see even less communication in the coming years.
The author makes some good points about the pressures of running an EDA company however he doesn't understand that you cannot compare a semiconductor business with a software business in terms of margins and costs. These are two radically different businesses, apples and oranges. Semiconductor companies with fabs have high production costs, inventory and legions of relatively low-paid fab works. EDA software companies have little to no inventory, and high-paid developers, AEs, Sales and Marketing people. The barriers to entry for semiconductor companies with fabs can be in the billions, while the barriers to entry for an EDA company are very low - basically a good idea, PCs and electricity.
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