First lesson: Get out there! Low profiles don't work. Monterey often seemed to be a quiet, secretive company, whereas Magma was very much in the public view. In the early days, some saw Magma as boastful and full of hype, and even now some of the claims made by founder and CEO Rajeev Madhavan raise eyebrows — such as his belief that Magma will be one of the top two EDA vendors in a few years. But Magma is here and Monterey is not.

Second lesson: Take risks. When Magma launched its IPO in 2001, amid much skepticism. But that leap of faith paid off. Monterey hesitated and lost its window during the semiconductor recession.

Third lesson: Deliver ahead of the competition. Magma had a working product in the field earlier, when even a few months made a tremendous difference. Magma aggressively pursued benchmarks and met customer requests. Monterey didn't have production-ready products until after the recession hit, by which time it was too late for a fourth player in the market.

Fourth lesson: Don't be ahead of your time. Monterey's technology was built for parallel computing platforms, and inexpensive multi-processing machines were still several years away. Magma offered software that ran on what people had at the time. The EDA graveyard is littered with companies who were ahead of their times.

Monterey's story ended recently when the company sold its assets to Synopsys, for a fraction of the venture capital that went into Monterey. The company's tools, used in over 100 tapeouts, will not be continued.

Magma won the "race" with Monterey, but the finish line is still far away. Despite strong growth, Magma is far smaller than Synopsys or Cadence. The larger vendors are aggressively marketing RTL-to-GDSII design suites of their own. The EDA market is not growing, and fewer customers likely will tackle IC physical design at 90 and 65 nm.

Monterey's story has ended, but the most interesting and challenging part of Magma's story may just be starting.

Richard Goering is managing editor of Design Automation for EE Times.