The principle subject of the DVCon 2009 Executive Panel in San Jose in February was "EDA: Dead or Alive?"

The seven speakers on the panel were unequivocal in the answer: EDA is definitely alive, because it’s the single most important pre-requsitive for progress in electronics. The electronics industry will never die and, therefore, neither will EDA.

In the weeks after the event, I spoke at length with all seven panelists individually to follow up on various topics discussed at DVCon. This article recaps my conversation with SpringSoft executive, Scott Sandler. Links to the rest of the conversations in the series can be found at the end of this article.

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EDA dead or alive ...

Scott Sandler – EDA is alive because it’s necessary, absolutely necessary! As I said at the DVCon panel, the question of whether the industry is healthy and profitable is a completely different question from whether EDA is alive. Is the business healthy? On the whole, the answer is no, but I can point to various funding announcement over the last few months to see that EDA is not dead. It may be challenged, but it’s definitely not dead!

Scott Sandler – I don’t think the differences between regions of the world are that important, but that’s no different in EDA than in any other industry. For example, there’s a lot more software innovation in the U.S. and Europe than in Asia, although SpringSoft is not the only significant software company in Asia. There are also a couple significant companies in Japan.

I think you can trace a lot of this to the educational systems in the different countries. The university systems in Europe seem to train people to higher levels of abstraction than here in the U.S. If you look at the adoption of different tools, I believe it reflects those educational differences.

Scott Sandler – If you look at the adoption of ESL tools, behavioral synthesis types of approaches, it’s much more common in Japan than U.S. Brett Cline’s business, Forte Design, is heavily centered in Japan. In Europe, as well, there’s much more adoption of SystemC tools. I’m not sure what to attribute this to, other than the general academics trends I mentioned earlier. And to a certain extent, consumer electronics platforms. There’s a much heavier emphasis on those technologies in Japan.

Scott Sandler – In the U.S. and Taiwan, although [our analysis indicates] our business matches the overall distribution of EDA business around the world.

Scott Sandler – The global semiconductor market is down quite a lot, with the weaker companies struggling. The larger companies are falling less, with some strength in wafer starts in Taiwan in particular. Even in this down period, however, we’re going to see some local blips and some local bright spots. The world is truly global.

Scott Sandler – It’s not ours to say what will happen to other vendors, but history indicates consolidations happen with a few companies getting bigger. I don’t see any immediate signs of change in the current situation, however. We’ve seen the rise of one medium size EDA vendor. With SpringSoft, we now see the rise of a second medium-size vendor with a sales channels leveraged beyond a single product.

The market is made up of a broad line of suppliers, not just a single line of providers. Strategically, sometimes companies get absorbed too early and their products die. If a company acquires good products, however – for instance, Gateway or Verisity – the acquisition [can be very successful]. That’s how the broadline EDA suppliers got so large. It’s not our intention at SpringSoft, however, to become [a broadline supplier at this time], only to focus on bringing the best value to our customers.

Scott Sandler – The Certess acquisition has nothing to do with the downturn. It was in the works long before the market crashed. It was the right thing to do when we thought of it, and it was right at the end as well. The Certess product is ready to sold, and already has great market acceptance.

Scott Sandler – I don’t know, but we’re doing some analysis to see what’s out there that would give us the same boost as the Certess acquisition. The critical thing is the fit with our strategy, that the acquisition aligns with our existing products.

Certess was just such an acquisition, because we didn’t build a simulator. There were two distinct product lines between our two companies, even after the consolidation. Last year, we also acquired a company called Innoveda. That team has been folded into our Laker products. As I look down the road, I’m looking at opportunities and seeing what’s out there. It’s a difficult puzzle and a constantly moving target.

Scott Sandler – We believe these things have to be done in parallel, but that’s not unique to EDA. For every 10 good product ideas, 3 will be developed and only 1 will succeed in the marketplace. Matching market research and product ideas [is difficult]. A lot of development never sees the light of day, or only has limited exposure to customers, whether it’s technology targeted at new markets or enhancing existing features.

However, if you don’t continue internal development on your next technology or product, you lose your edge as a company and might as well just be a holding company.

Scott Sandler – They have internal R&D going on all the time. The internal philosophies and investments vary, depending on the stage of the company and who’s in charge. But if you take Mentor for example, it’s widely understood that their Calibre line was completely based on internal development. Mentor did not acquire that technology. Similarly, PrimeTime at Synopsys was an internally developed technology. And, Cadence has one of the top 3 simulators in the market. Of course, they acquired Gateway, but their simulator was developed long after they acquired the Gateway simulator.

Nonetheless, for all the internal development work that goes on, very little actually sees the light of day. If you already have several established products in your sales channel, you can’t always afford to distract your sales team with new products that won’t succeed. In larger companies, you have to be a lot more careful about what you push out. You tend to hold back more than you would at a startup. [But then], startups are often a flash in the pan, unable to get their sole product even to the first stage. This is a difficult process in all organizations.

Scott Sandler – Like all incumbents, it’s theirs to lose. But some fundamental change in the flow [may come along] that they couldn’t currently foresee. If they maintain strong balance sheets, however, they’ll have the inside track to remain on top. If you look at the status quo today in the EDA, it’s actually been there since the late-1980s. The leaders have been able to withstand challenges from other players and use that strength to maintain market position.

Now, whether or not their tactics have been healthy, you certainly could ask that question – the whole "value-pricing" thing. We could come to some very interesting opinions if we were to have that discussion, particularly if "value selling" is the process of selling something that’s just "less bad" than something else. This strategy doesn’t go very far, in my opinion.

You could also ask, for any given company, what’s the right thing to do [going forward]. Who are they trying to satisfy in terms of their investment community or their customers? The choices we make as EDA companies are often influenced by a wide variety of factors that may not always be clear.

Company leadership can be challenged internally if they fail to execute or see into the future accurately. They can also be challenged from the outside, if there are companies that produce things that are dramatically different [than the incumbent products in the market]. But, there’s no reason why the large EDA companies can’t see the same opportunities as the small companies see. Whether they’re willing to move on those opportunities or not, is a different question, however.

You could draw parallels with the computer industry. Companies like DEC and Data General completely failed to see that the world was going to change. There were huge changes, and they couldn’t keep up. I don’t see that happening in EDA, but people in this industry are always trying to change the world, including people in the big companies.

Scott Sandler – I don’t see any evidence that any large EDA companies are stuck because of a lack of willingness to move the market. Let’s say, for instance, there was going to be a sudden, wholesale shift from RTL to higher levels of abstraction. It could be that one of the large companies would execute on that shift, but I don’t see that happening without the other larger companies following suit.

Scott Sandler – I think it’s great that there’s a much wider conversation now due to the democratization of the media. Instead of having just one writer at EETimes, we have no centralized voice now, with lots of people talking. The lack of advertising [for traditional media] also makes it harder for any one channel [to control the conversation].

Information is like water. Engineers, by and large, don’t talk to the sales people from any vendor. AEs talk to the engineers and try to train them on the key messages. But AEs are also out there saying whatever they want to say. We expect them to be real engineers talking to real engineers. Engineers are a very skeptical audience. They ask a lot of questions and check everything. There’s a long process of education and hand holding to get from the initial niche installation of a tool to broad acceptance within the organization. And when a tool goes badly, and the engineer doesn’t see the value, the management who bought it gets fired and the old tool comes back into use.

It’s very rare that a company buys anything just because Cadence, for instance, told them to buy it. Some big deals may appear to be written that way but, by and large, these are technical decisions influenced by the dollars and what prices the vendors are willing to give. [Of course], when there or 2 or 3 products in the industry that are not well differentiated, you end up in a price war like with any commodity product. The truth is, it takes a lot of work to differentiate a product in EDA or any industry.

Scott Sandler – DAC has an enormous role to play here, an absolutely vital role having to do with technical conferences and the chance to know what research is going on out there. What I love about DAC, as well, is that all of the vendors are there talking about their latest products. At DAC you can see all the interesting stuff, and discover stuff you didn’t even know about.

Many people have tried, but the world has still not figured out how to put a trade show on line. It’s just not very rewarding. The word of mouth [communication] that takes place at DAC – "You should see what they’ve got over there at that booth!" – it’s still extremely valuable. The economics of travel being what they are today, there may be a dampening effect this year, but DAC still remains a vital Coming Out Party for everything in EDA.

Scott Sandler – I do! I can connect the dots between what we do and the difference we make between the user and the user’s organization. If I could not be convinced that my work, and that of my organization, did not bring value, I would not have any interest. But that’s not the case!

March 25, 2009

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Bio ...

Scott Sandler is President of SpringSoft USA, and formerly CEO of Novas before it was acquired by SpringSoft in 2008. Sandler began his career as a verification engineer at Intel, and quickly learned that he liked the tools a lot better than the designs. He entered the EDA world as the first AE for Verilog, and had stints at Cadence and Chrysalis before arriving at Novas in 1999 and leading it to the merger with Springsoft last year. Sandler has a BS-CSE from the University of Massachusetts.

Copyright (c) 2009, Peggy Aycinena. All rights reserved.