The market is recovering with consumer electronics leading the way, but the freewheeling days of the Internet bubble are long gone. Today's electronics companies are concerned about budget, and are conscious of spending large sums on design tools.

Starting a business now is a serious endeavor that requires careful thinking. Venture money is tight and the conditions far more rigid than they have been. The market, too, is more stable and more strategic. Design starts are flat and not increasing. Instead, chips are now quite large and getting larger. The composition is changing and there are more types of chips, from application-specific integrated circuits and structured ASICs to customer-owned tooling and field-programmable gate arrays.

Electronics companies whose products can meet the return-on-investment (ROI) criteria set down by their customers are proving to have a far better chance of surviving this economic downturn and navigating in uncertain waters.

The electronic design automation industry, in general, has found that its software and hardware product sales today are driven by affordability, good value and ROI for electronics companies to justify the purchase. That's not to say we're skimping on functionality or product features. Instead, given today's economy and restraint, there's just no room for lavish events or dancing girls, which is indeed a contrast to the go-go years.

A good example is the traditional high-end emulation market, which has seen a dramatic drop-off in sales in the last year. Most high-end emulation providers, independent companies or large EDA companies' emulation divisions, are surviving on maintenance contracts.

Consequently, we're learning that this market sector can't operate as usual. A business model of restraint is fundamental, where affordability and the use of the best available technology are combined with new architectural ideas and competent development efforts. One important part of our innovation in the ZeBu product line was, for example, to take a new approach that minimizes the amount of efforts needed to port the software from one product generation to another. This new model enables a company like EVE to deliver new products that meet the needs and the constraints of its customers, making both investors and customers very confident of our ability to grow the business even if the economy gets worse.

Luc Burgun, President and CEO,Emulation and Verification Engineering (EVE), San Jose, Calif., and Palaiseau, France