harry … the ASIC guy

Thanks to Sean Murphy who alerted me to the 2 part piece (here and here) in EE Times on Cloud computing and Software-as-a-Service for EDA.

Those of you who have been reading this blog have already heard me discuss this topic (several times)and many of you have already added your thoughts to the conversation.  It looks like Daya Nadamuni and Gary Smith must either read my blog or have independently realized how the EDA industry is moving.  Either way, given Gary Smith’s and EE Times’ street cred, this will likely help to accelerate any move in that direction.

There is a lot more to be said, so look for my next post where I’ll address the EE Times articles directly.

Meanwhile, Happy Thanksgiving to those of you in the US.

harry the ASIC guy

I spoke to a friend of mine at Cadence yesterday morning.

“I came in this morning and tried to log on and I couldn’t.  Turns out I must have mistyped my password, but I was worried there for a minute.”

That seems to sum up the mood at Cadence yesterday as the Turk made his way through the hallways of Cadence worldwide. “I think I’m going to go on vacation for the rest of the day”, my friend said later.

By now, I’m sure you’ve heard it from friends, or read it in EE Times or on John Blyler’s blog, that Cadence cut “at least” 625 jobs or 12% of it’s workforce.  John Blyler’s sources say the impact will be closer to 1000 jobs once contractors and others are added in.

The speculation has been going on for several weeks including an interesting exchange on the Yahoo message boards as to how deeply and in what manner Cadence would cut.  Would they take out a scalpel and trim the fat from organizations across the board?  Or would they focus on key areas with technological advantage and hatchet off areas that were non-competitive? Cadence CTO Ted Vucurevich mocked the idea that Cadence would sell off any businesses. Yet, the official press release says that Cadence “emphasized those market segments where Cadence enjoys a leadership position, such as mixed-signal design, advanced verification, and low-power design”, implying it was de-emphasizing other businesses.

So … do we have any idea if these cuts were made with a scalpel or with a hatchet? Here is what I’ve been able to pick up from others regarding what Cadence is doing to save expenses:

• From the official 8-K report: “(e) Cadence has determined that no payment shall be made to Cadence’s named executive officers or the other participants in the Cadence Senior Executive Bonus Plan for performance in fiscal 2008.” I don’t think this eliminates the golden parachute, but at least it weighs a little less.
• At least some middle management was let go, including first line managers and some long-time Cadence employees. It seems they are trying to cut the “deadwood” like any organization does now and again but from the management side first. And the impact to the rank and file seems to be less than it could have been. Still, having gone through similar times at Synopsys before, I know that a lot of these people are experienced EDA veterans and good people to have in the organization and I wish them well.
• All, or a substantial part of their tech pubs was let go. (Makes sense since they can contract this out).
• IT was hit, though not sure how deep. (Can always move their infrastructure to the cloud or outsource IT - now wouldn’t that be ironic).
• Berkeley Labs was hit hard or perhaps even shut down (who needs research?)
• Their DFT R&D group was impacted, perhaps a signal as to their plans for this product line (just a bunch of IBMers anyway).

As yet, there is no indication that entire products are going away, but it’s still early.  Cadence has yet to speak to the investment community since the Fister resignation and delaying their earnings release due to the discovery of an “accounting error”. Personally, I think it will be painful for a company that has endeavored to provide a “complete flow”, to sell off a product and create a hole in that flow.  If they do sell off products, it will be around the edges, not in the core EDA flow.

Take a look at Gary Smith’s analysis from the time that Cadence bid to take over Mentor (can you believe it’s been  just over 4 months since the offer). The tools where Cadence has low market share and are possible targets for the hatchet:

• Design for Manufacturing
• Physical Verification
• Design For Test
• Static Timing Analysis
• Synthesis

What do you think? Can you see Cadence divesting any of these products?  Or do you think there are others that might go away? Which product would you definitely not let go?

Inquiring minds want to know….

harry the ASIC guy

Last Friday, I took the 45 minute drive from Torrance to Montrose to have coffee with Gary, a successful entrepreneur who is one of the founders of a fledgling IP company. I was introduced to Gary by a friend at Synopsys who suggested that I meet him because he’s had great success and has a lot of insight into how to run a successful business.

Gary brought along his partner, Art, and we had a very good conversation, almost an hour and a half. We discussed what I was working on, what his company was working on, and my revolutionary ideas about the EDA industry. Gary has a lot of experience and he provided some insights I had not heard before:

• How can EDA companies provide flexible pricing to smaller customers and not to their biggest customers?
• Software-as-a-Service works for cookie cutter processes like sales and HR and expense reports but not for customized processes like EDA tool flows

And he enforced some feedback that I had heard before:

• Why would a large EDA company want to cannibalize their long-term license sales with short-term licenses?
• It’s been tried before and failed.
• The guys with power have no reason to change the status quo.  They are holding 4 aces.

In short, my discussion with Gary amounted to this … your idea has tremendous value to the end user, the designer, the customer, the small startup or design services company … but the big boys, who have all the power, have no incentive to play ball, and every incentive to leave everything as it is. Gary never came out and said this verbatim, but the message was clear … “you don’t stand a chance!”

_______________

As I drove back from my meeting with Gary, a little discouraged, yet grateful for the honest feedback, I turned on the audiobook version of Seth Godin’s new book Tribes : We Need You To Lead Us, which I wrote about in my last post. Somewhere around downtown LA, near Chinatown, I heard the following:

“All you need to know is 2 things.

• The first thing you need to know is that individuals have far more power than ever before in history. One person can change an industry. One person can declare war. One person can reinvent science or politics or technology.
• The second thing you need to know is that the only thing holding you back from becoming the kind of person who changes things is this: lack of faith. Faith that you can do it. Faith that it’s worth doing. Faith that failure won’t destroy you.

… More and more people, good people, people on a mission, with ideas that matter, are stepping forward and making a difference … An individual, or a small group, has the power to turn an existing system on its head. Now, most of the time, we call heretics, leaders. The heretics are winning. You can, no, you must, join them.”

In short, Seth Godin’s book “Tribes” amounted to this … the technology that is available today via the internet (blogs, podcasts, social networks, etc, etc, etc)  provides the leverage to enable one person to initiate and lead a movement that can change the world. All that is necessary is to conquer the fear, to selflessly lead a tribe of people where they already want to go, to enable them to work together to achieve the goal. The message was clear … “you can do it!”

 _______________

So, who’s right, Gary or Seth? This will sound like a cop out, but they are both right.

Gary is right about all the challenges that exist to keep a change from happening.  In EDA, as in many industries, the status quo has tremendous inertia. Those who benefit from the status quo are usually those who have the most tangible power. And they will use that power to maintain the status quo. For all the reasons that Gary gave me.

And Seth is right, that despite all the reasons that change is hard to initiate, change can be ignited from a single spark. And long established industry giants can fall.

Look at the music industry, where the accessibility of music production and distribution capabilities has made the record companies increasingly irrelevant. Independent artists can self-produce and self-distribute their work, without have to sell their futures to the record companies.

It will be the same in the EDA industry. Independent EDA tool developers will be able to self-produce and self-distribute their work, without having to look to an acquisition by one of the “big 3″. I’d like to lead this movement, but I need to be honest … I’m a little scared.

• Scared for my reputation as a reasonable level headed person.
• Scared for my relationships with people in the EDA industry who stand to lose out from this change.
• Scared that I’ll waste several years chasing something that is never going to happen.

I’d like to know that I am not alone. That others will offer their support, their time, their effort, to make this happen. That we can build a Tribe that can change the industry.

If you agree with me … if you feel the same as I do … then let me know. Encourage me so I can encourage you.

And we’ll change the world. (Well, at least the EDA industry).

 harry the ASIC guy

At the end of last Sunday’s Chargers-Bronco’s game, Referee Ed Hochuli blew a call that cost the San Diego Charger’s the football game.  Here’s a somewhat comical look at what happened:

Probably not so comical if you’re a Charger’s fan

Well, last week I got a chance to do some more “research” into the Cadence announcement of a SaaS offering. Although I got the substance of the call correct, in haste I also got one important detail incorrect.  (As, Mark Twain once said, “a lie can travel halfway around the world while the truth is putting on its shoes.” Today, a lie can travel around the world several hundred times while you put on your shoes).

I had inferred from the use of the term “Software-as-a-Service“, that the Hosted Design offering would include a “pay per use … pay as you go” or similar on-demand licensing model. Upon further review … this is not the case.  Here are some of the things I found out:

1. No on-demand licensing, no eDACard … only monthly granularity for licensing. If you want to scale the size of the hosted environment, several weeks lead time may be needed to obtain and configure the additional CPUs unless they are otherwise available.
2. The “flows” that are offered are the Cadence reference flows (e.g. Low-Power Design Flow), not a production flow that Cadence may or may not be developing.
3. Cadence says that it can host any third party EDA software … just license it to Cadence’s hostid.

Despite some limitations, this is still a big step. Small companies can now obtain the necessary hardware, software, and IT support to do chip design at a lower initial cost than building their own infrastructure. The VCs should like that.

But there are some limitations.  First, although the Cadence VCAD chamber provides security, it lacks the instant scalability and on-demand pricing that cloud computing would provide. Second, although reference flows are provided, it lacks a real production design environment that designers can just pick up and use.  Third, despite Cadence’s assurances that they will allow other EDA tools to be hosted, competitive tools likely will be discouraged since the ultimate objective is to further lock customers into an all Cadence tool flow.

So, the question now is … What Will Synopsys Do (W.W.S.D)?

Before that, we have to ask What “Has” Synopsys Done?  You see, Synopsys tried and then abandoned a similar idea about 7 years ago. At the time, companies were not “comfortable with the idea that their computers and data were in a remote building operated by a third party”.  But they are now (at least more than before).  At that time, Synopsys had no production design environment available to offer. They do now.

Synopsys could probably go one better and offer a superior solution if it wanted to, combining their DesignSphere infrastructure and Pilot Design Environment.  If fact, they have done this for select customers already, but not as a standard offering. There is some legwork that they’d need to do, but the real barrier is Synopsys itself. They’ve got to decide to go after this market and put together a standard offering like Cadence has.

And while they are at it, if they host it on a secure cloud to make it universally accessible and scalable, and if they offer on-demand licensing, and if they make it truly open by allowing third party tools to plug into their flow, they can own the high ground in the upcoming revolution.

What do you think?

harry the ASIC guy

Last week I predicted a Revolution in EDA. I said that “the sooner the EDA companies learn to swim with the tide, the better off they will be after the revolution”. 

Well, today Cadence just jumped into the water and started swimming. Like Michael Phelps!!! You can read the traditional Cadence marketing speak on this new offering here.

In a nutshell, Cadence has made public what it has been offering select customers for some time … hardware, software, design flow, and applications support as a Software-as-a-Service model.  Pay per use … pay as you go.

If you are a small startup that can’t afford the upfront costs for software and hardware and the part-time IT guy…

If you are a small-medium sized design services firm that wants to do turnkey design but can’t afford to keep idle software lying around in between client projects…

If you want to do place and route from your iPhone…

This may be for you.

More next week….

harry the ASIC guy

I can’t sleep at night.

This Idea has been bouncing around in my head for the past few months. I can’t shake it. If you know me, then you’ve probably heard me talk about the Idea or ask your opinion about the Idea or whether I’m crazy. I’ve been itching to blog about this Idea, but haven’t been able to figure out the right way to approach it.

Then, the other day, Ron Ploof gave me a way to approach the Idea in my blog. Please read Ron’s post on the Birth of a New Media Revolution first before continuing. It’s damn good, you’ll get something out of it, and it gives context to this post.

OK … done? Good.

Ron’s main point is that a revolution can’t happen until all the enabling pieces are in place. New media required easy-to-use publishing tools, simple syndication (i.e. media distribution), and low-cost bandwidth.  Once those were in place, new media hit the tipping point.

Well, I’m going to go out on a limb today with a prediction:

The pieces are coming together for a revolution in EDA. Like most revolutions, it is starting small, hardly noticed by the big guys on the block. In the next 5 years, it will change our industry forever by leveling the playing field, allowing smaller EDA companies to compete with larger ones, giving customers greater flexibility on how and when they access tools and which vendor’s tools they use.

It’s going to happen.  And just as with new media, there are three barriers that will need to come down before we hit that tipping point.  They are:

1. The high cost of sales, marketing, and support.
2. Licensing models that lock-in customers.
3. Lack of comprehensive standards for tool interoperability.

If you’ve been staring at the EDA horizon like I have, you’ve already seen that all of these barriers are starting to come down:

1. A week ago, a company called Xuropa launched an online tradeshow platform that could greatly reduce the cost of sales for EDA companies and enable greater access to designers to evaluate tools.
2. For several years now, Cadence has provided access to short-term licenses through their eDACard model and Synopsys will introduce a similar offering before the end of the year. Cadence also provides a service through their consulting organization called “hosted VCAD” whereby customers can access software and hardware on a Software-as-a-Service basis. How long before the other vendors follow?
3. As Karen Bartleson noted on her blog yesterday, the EDA industry has moved into an “Age of Responsiveness” with regards to tool interoperability where tools are expected to be open and inclusive.  As witnessed in the latest OVM / VMM standards war, open standards are required as the price of admission and “woe be to those” that do not heed this call.

I’m a realist. This EDA revolution is just beginning and will take some time.  It won’t happen without a fight from those who stand to lose out. But I believe that the revolution is inexorable.  And the sooner the EDA companies learn to swim with the tide, the better off they will be after the revolution.

There’s a lot more that I need to say before I can sleep at night, but too much for one post.  Stay tuned.

harry the ASIC guy