Need Input on the Design Automation Conference

This is a solicitation for Input on the Design Automation Conference and how it can be improved.

Need Input on the Design Automation Conference

Patrick Groeneveld is the CTO at Magma and the Vice Chair in 2011 of the Design Automation Conference. He also chairs the   DAC Strategy Committee for 2011 and he has asked me to take part, representing user and startup concerns in the planning process.

My objective is to foster an exploration of some of the critical issues facing the industry and to suggest some possible roles that DAC can play in addressing them.

I believe that conferences and other face to face meetings are essential for establishing the trust necessary for key stakeholders and thought leaders to collaborate on common challenges.

I think that the EDA landscape has changed significantly in the last five to ten years and DAC has yet to adjust:

1. The rise of global teams as the default vehicle for product design and development. Designs never sleep: continuous configuration management and design dashboards are replacing face to face status meetings and PowerPoint decks. See also:
   • “Beat The Clock“
   • “Three Roundtables on Global Teams at DAC“
2. Customers are increasingly relying on outside service firms for significant aspects of the product development process. EDA services revenue may be as large as EDA software revenue.
3. Clearly imminent is a transition to cloud computing and SaaS models, whether at larger customers on virtualized datacenters or at smaller firms relying on third party cloud computing suppliers.

I welcome your suggestions for how DAC can assist small firms and working engineers. I am specifically interested in your opinion on:

1. What are the significant problems or emerging issues that DAC should foster conversation and collaboration to address.
2. What can DAC do to better serve the smaller innovative firms.
3. What can DAC do to enable innovative engineers to compare notes on current challenges. How do we recapture the roots of the conference as a community of practice where engineers share lessons learned around real design and product development challenges.

Please use https://www.skmurphy.com/contact to reach me.

Related posts:

• “Opportunities for Serious Conversation at DAC 2009“
• “Impressions from DAC 2009 Panel: Tweet, Blog, or News”
• “DAC 2009 Blog Coverage Roundup“
• “EDA Chiefs Hazard No Guesses on 2010 Market“
• “Getting Back to Growing the Pie in EDA“
• “Growing the Pie in EDA: As Revenue Shrinks So Does Analyst Interest”
• “Growing the Pie in EDA: Add Matlab“
• “DAC 2010 Blog Roundup“

PostScript – An exchange with Olivier Coudert on service vs. software business models in EDA

Olivier Coudert: service companies will eat EDA

Sean Murphy: Without violating confidences, what are some examples of EDA service companies that are thriving or that you believe will benefit from this emerging shift in semiconductor preference for service over software? I am not trying to challenge the accuracy of your statement, I am trying understand more specifically which companies you are talking about. In particular is it:
1. Service firms using commercial EDA tools to deliver a result (whether it’s a component of a design, an analysis for a design or design block, or a transformation of one aspect of a design into another), which means that someone is still buying tools and adding a service margin on top.
2. Service firms using internally developed tools, but selling services instead of tools.
3. services firms pirating tools and selling services based on operating them.
4. other: one or more that don’t fit into the first three categories.

Olivier Coudert: The truth is that EDA companies have been providing software solutions that are more and more seen as commodities. The license renewal rate is dropping and its volume is decreasing.  In a flat, if not slowly shrinking market, the EDA firms have to eat their competitors’ share if they want to grow or just survive. They drop their prices and fork free AE support to sweet the deal for the customer. The vast majority of the designs can be done with last year’s generation suite, thus there is no urgency to buy new design tools. Then semiconductor companies might indeed be better off with a dedicated service company, which provides hands-on design expertise, and will be judged on results, i.e., the final tapeout. This is a win-win situation: the customer can fully rely on the service company, and since this business model commands a much higher fee than for a software license, the service company can expand and further invest to be an intimate part of their customers’ flows.

EDA has better look around and see what is happening. Semiconductors companies will more and more rely on service companies, tailored to their needs. Chip design and verification looks more and more like an IP assembly that requires an expertise that EDA tools do no longer deliver. The value-added is in that expertise, not in the tools that are becoming more and more push-process.

It is true that VLSI service companies buy tools to EDA companies, but the service companies factorize the license usage between several customers, which means that overall, less licenses are needed. Today, TCS can easily rent any EDA tool from the big 3 by the week or by the month. Imagine tomorrow Synopsys, Cadence, and Mentor dealing only with the top 6 hardware design service companies, themselves servicing the top 20-30 in the semi industry: EDA will loose a lot of leverage in the sale negotiation process. If Magma ends up as a cheap provider of IC implementation solutions, all developed in India, it will lower the bar even more.

EDA has to evolve quickly if it does not want to be sidelined as just an enabler. The EDA industry must be part of the design expertise, and work closely with its customers, even if it means its solution is no longer generic. And yes, as I said in the past, the value-added is in the system-level software, and this is where resides the growth of hardware designs. So the EDA industry must go into chip software design and verification if it wants to be relevant in five years from now.

Sean Murphy: thanks for the update, it looks like the EDA Industry’s economic center of gravity has shifted to India (about 20 years faster than Peggy Aycinena predicted in 2006 in http://www10.edacafe.com/nbc/articles/view_weekly.php?section=Magazine&articleid=321147

Here were her concluding paragraphs

Here’s how the common wisdom goes. Cal is about real people. People who don’t come from money. People who are honest, urban, authentic, rebels, thinkers, innovators, agitators, and fun. Stanford is about the Bubble People. People who come from money, live in a Bubble, and go to school on The Farm. Stanford people are polite, well-dressed, pleasant, tidy and smart. Sometimes they can play a good game of football, but more likely they’re busy winning Nobel Prizes. Cal people wear jeans. Stanford people wear slacks. Cal people wear sweatshirts or t-shirts. Stanford people wear cardigan sweaters. Cal people drive clunkers, if they own a car at all. Stanford people drive BMWs. I think you get the idea.

But you know what the other idea is that you should also get? Cal and Stanford people, at least the ones who were swapping barbs over dinner tonight at the Marriott Hotel, are both equally capable of losing sight of the fact that not everybody in EDA gets it. Not everybody in EDA thinks that the center of gravity of the world is somewhere on the straight line that connects Hoover Tower to the Campanile. Not everybody in EDA thinks that Northern California, or EDAC in particular, is actually the center of the world.

And I’m guessing the majority of those people – the ones who don’t get it – are working away somewhere on the other side of the International Date Line. They’re not thinking about the frat boys – be they from Cal or Stanford – at the back of the room, or the presentations and power brokers – be they from Cal or Stanford – at the front of the room. In fact the people on the other side of the International Date Line, probably aren’t thinking about the Kaufman Award dinner at all.

Because, in the opinion of this bemused school marm-turned-industry freeloader, those people are the Real People. For them, the differences between Cal and Stanford are totally negligible – smaller even than 45 nanometers – when compared to the differences between the entire well-heeled, well-fed, highly motivated, incredibly creative, innovate, and self-obsessed Bay Area population of techno-successes, and those folks in other geographies who are working hard to wrest control of the technical momentum in this century.

Whatever was going on tonight at the Marriott Hotel (and I can promise there was lots!), whatever politics caused the Head Honcho of the Numero Uno company in EDA to be sitting at the back, and caused the other two CEOs to be sitting at the front, whatever caused the next Executive Director of EDAC not to be named tonight, whatever caused the CEO of the Numero Cuatro company in EDA not to be sitting in the room at all – all of those politics, and more, pale in comparison to the real sea change that’s underway in the industry and the world.

The center of gravity for the entire universe of high-tech is moving. Profoundly, steadily, and undeniably. Ten years from now, twenty years from now, 30 years from now — when all of the very well dressed (even those from Cal), very well fed, very well paid people who were in the Marriott tonight have either retired or gone to their great reward – this whole event will be happening somewhere else. Where that will be, is anybody’s guess.

It won’t be in Northern California. It may not even be in North America. But it will happen. Because people who are real, authentic, hard working, and don’t come from money today are working hard to see that their children are well fed and well paid tomorrow. Those people are going to beat tonight’s crowd at their own game. Creating CAD tools that serve their local markets, and then serve global markets. It’s inevitable. And they’ll give awards to those who are most successful at contributing to the game.

Olivier Coudert: Sean, I unfortunately believe that you are right, and I don’t see much effort by the EDA industry to reverse the trend.

The fact that high-tech industries establish themselves in India or China is not new, and I personally cannot see anything wrong with it as long as you agree on the rules of free-market, competition, and transparency. There are plenty of high-tech companies with huge facilities in India and China (Google, Microsoft, Yahoo, SAP, Cisco, etc) that are firmly anchored in the US as far as strategy and innovation is concerned. It looks like EDA gave up and its promises some time ago, for instance when Synopsys and Cadence ramped up services and consulting business units that eventually staled or regressed. The big 3 have no more momentum left. The VLSI service units in India (and much smaller ones in the US and Europe) are gaining into the customer flows. If a Tata consulting can buy a few ICC licenses to cover 20% of the next ASIC designs, the biggest looser will be Synopsys (take your tool and substitute your company’s name). That is exactly the scenario that is looming unless EDA companies can have a consistent strategy to address customers’ needs, and work with them as partners, not as enablers. Else it will not be long before the bulk of the design and implementation can be fully covered by services, making an independent EDA industry a thing of the past.