Digital video is almost everywhere. And where it isn't now, it soon will be. As a result, the market for digital video intellectual property components--hardware, software, you name it--is wide open, with lots of opportunities for profit. And there are roughly five gazillion vendors jockeying for position within a highly fragmented field.
Companies like ARC and Tensilica are offering programmable (and sometimes customizable) hardware-plus-software silicon IP solutions for chip designers. Imagination Technologies and Hantro (recently acquired by On2) are offering hard-wired silicon IP. Software companies like MainConcept are offering proprietary implementations of standards-based compression algorithms ("codecs"). And then you have a gaggle of other companies, like Droplet Technologies and Ipera, that are selling proprietary algorithms for compression and pre- and post-processing.
Programmable chip vendors, of course, are increasingly providing software IP along with their video chips. For example, the video codec software provided by Texas Instruments for its DaVinci chips. Likewise for FPGA vendors, and for companies promoting massively parallel processors for applications like video post-production and surveillance.
With a few exceptions, the video IP market is characterized by a large number of small players. This market fragmentation is problematic for both IP vendors and their customers. If you're designing a video-oriented SoC, how do you go about choosing components that will play together? It's hard enough to evaluate the video performance of a single IP block or chip.
Predicting the performance of a slew of interoperating hardware and software components from multiple vendors can be virtually impossible. Not to mention the fact that it's anyone's guess which of these IP companies (many of whom are fledgling vendors with uncertain prospects) will survive.
On the flip side, if you're an IP vendor, how do you cut through the noise and get noticed? How do you gain customer confidence?
Here's what I think needs to happen: A bunch of these companies with complementary products need to join forces and offer "one-stop-shopping." By doing so, the IP vendors will benefit from economies of scale and can potentially reduce both real and perceived risks.
Meanwhile, SoC and system designers will have more clear-cut choices and can spend less time banging their heads against a wall trying to find all the pieces they need and make them work together.
Unfortunately, this is unlikely to happen--at least, not on a large scale. This is due in part to the fact that many video IP vendors are backed by venture capital, and VCs tend to take an all-or-nothing approach: They shoot for the stars in terms of their return on investment (via a public offering or highly profitable acquisition). If it doesn't work out, they throw in the towel.
This approach doesn't lend itself to, for example, a handful of small IP vendors joining forces. But there may be an opportunity for established companies with cash on hand to scoop up some of these smaller video IP companies, as Dolby did with its recent acquisition of Coding Technologies (that's in the audio market, but the same reasoning applies).
There are some good technologies out there that are ripe for integration into a bigger-picture product. A little consolidation might be just what the market needs.
Jeff Bier is the president of Berkeley Design Technology, Inc. (www.BDTI.com), a benchmarking and consulting firm focusing on digital signal processing technology. Jennifer Eyre White of BDTI contributed to this article.