Remember Furbys? The Must Have Toy of Christmas 1998? Remember how for a few weeks before Christmas Eve '98, $30 Furbys were selling for $500 on the black market? And for around six months, Furbys appeared, off and on, in the news? (I even remember one story about Furbys being considered a security risk at U.S. government classified sites because they recorded and played back sound bites of human conversations.)

I have a good friend, Matt, who has this odd hobby of collecting Furbys. (It's odd because Matt is a 34-year-old accountant.) When I asked Matt why, he said, "Because they're pure Americana. They went up like a fiery rocket and then dropped like a hot rock. Now they're yet another cheap toy for a kid. That's so very American."

Matt's words reminded me of what Steve Wolfe, the editor of the CAD Report newsletter (www.cadcamnet.com), noticed at the recent DAC. "At DAC '98 everyone was buzzing about 'intellectual property.' IP was going to be big business, transform the EDA industry.

This year nobody had anything nice to say about IP. Most IP companies are losing money. De Geus has shut up about it. Customers make jokes that IP stands for Incredible Pain," said Steve. "But designers ought to have better things to do than to rewrite standard stuff like PCI parts and microcontrollers. Yet the IP business doesn't work. Why not?"

Steve was right. IP was the Big Hot Thing then. It was in every DAC presentation. And when two EDA guys (one at Synopsys and another at Mentor) wrote a book ("the RMM book") about making IP, it generated a lot of talk among the EDA pundits like Janick Bergeron, Yatin Trivedi and Cliff Cummings. (ESNUG 298, 299, 300, 315 and 318)

I bounced Steve's observation off Jim Tully, Dataquest's IP analyst. "John, we're talking about a $417 million market that grew 36 percent last year. But IP isn't significant in the EDA market," Jim surprisingly replied. "Yes, some physical libraries like Artisan and Mentor's Inventra plus basic blocks like Synopsys DesignWare may overlap between the IP and EDA space, but the bulk of the IP market is in big parts like ARM cores. EDA companies only made $60 million of that $417 million. Mentor made $31.7 million, Synopsys made $24.5 million and Avanti made $3.8 million. That amounts to about 15 percent of all IP business and to less than 3 percent of the $2.5 billion EDA software business. Trivial, really."

My accountant friend, Matt, could have been talking EDA IP when he said, "Now that the hype is gone, an average Furby is worth less than what you paid for it. It's only the limited edition collector's Furbys that have value, and that's contrived."

John Cooley runs the e-mail synopsys users group (ESNUG), is a contract ASIC Designer, and loves hearing from engineers at (jcooley@world.std.com) or (508) 429-4357.