…And How to Fix It
System-Level Design sat down to discuss how to fix what’s broken with John Bruggeman, Senior vice president and chief marketing officer at Cadence; Charles Janac, president and CEO of Arteris; Robert Hum, vice president and general manager of Mentor Graphics’ deep submicron division; Mike Gianfagna, vice president of marketing at Atrenta; and Bob Smith, vice president of of marketing and business development at Magma. What follows are excerpts of that conversation.
SLD: One of the top issues for customers involves co-design—lack of tools, lack of standards and lack of communication. How do we solve that?
Janac: We don’t, and here’s the reason: We’ve been whining about the EDA problem, but when you get up into the software world it gets much worse. You wind up with the ASP (average selling price) of a software tool being in the single-digit thousands. As much as we mind the ASP of EDA tools being in the tens of thousands and IP being in the hundreds of thousands, none of us are geared up to compete with our distribution channels and the support mechanisms in the single-digit thousands for tools, no matter what the volume is. Until the customer institutionalizes that the software is a huge amount of cost and that the reduction of that cost needs to be funded—this is a cultural issue, actually—then we’re going to have a worse problem than EDA has.
Hum: There is a problem in the semiconductor industry. Richard Beyer (CEO) of Freescale said he can’t deliver a chip without software and the software costs way more than the chip, but the buyer measures the chip and says this is what he’s paying.
Bruggeman: You’re hitting on a key point here. You talked about our joint customers are consolidating us out. The real issue is their customers are consolidating them out. To differentiate between one chip and another is virtually impossible these days unless you can get at that software layer, and the only way the chip manufacturers can truly differentiate themselves sustainably over time is through the software they deliver. The reason is that software is sticky.
Hum: Their customers are forcing them to create a software layer that has a standard API on top so they can go to another vendor and get the same chip.
Bruggeman: But that instantly commoditizes them. Once you standardize that software layer you’ve reached the lowest common denominator. Then you don’t get to call out any of the differentiating features of the hardware.
Hum: That’s what the handset guys are doing to the hardware suppliers.
SLD: How do we fix that?
Bruggeman: So if I’m a chip guy and I’m looking downstream at my EDA guy, they don’t get to differentiate so I want the same thing from my EDA vendor. I want co-design, standards and APIs so I can design the EDA vendor out anytime I don’t get the right pricing or a customized feature. If we in EDA don’t solve the higher-order problem we’ve relegated this industry to its own self-demise.
Hum: There are some examples where standardization helps. On one side, it helps to commoditize. You can swap out one tool for another. But every time the EDA industry has standardized something, that becomes the platform on which further innovation takes place. Before Verilog as a language showed up there were a zillion mediocre simulators. All of a sudden you had linting tools, ways of getting your netlists massaged and you had optimization tools. Once you didn’t have to write 15 parsers, we were able to reduce our costs. The latest standard that has helped is System Verilog. That has brought some fresh air into verification methodologies. Now we have to figure out what we can add.
Gianfagna: At one level you have to embrace that and see what you can add on top. If you try to avoid it so you won’t be designed out then you’re stuck. But that’s easier said than done. There aren’t enough financial resources in the industry to do that.
Smith: The heavy lifting is all in the software. At some point in the future it will be a pretty small club designing some pretty powerful chips surrounded by tens or hundreds of thousands of people writing the code. Once the chip is stabilized there will be a ton of verification and emulation.
Bruggeman: But if we all have to feed off of five or six guys that’s not sustainable. In addition, you have to wonder what happens to the other 300 companies because Moore’s Law doesn’t work for them. What’s going to happen is transformation of the value they provide. Rather than creating chip technology or chip IP they’re going to become integrators. They’re going to create only the IP that differentiates them. The rest is all re-use or integration of existing IP. Where EDA must innovate is in the area of integration. We provide horrible tooling for the other 300 companies. Companies like MediaTek have shown if they can be the best integrator they can be wildly successful. How do we tool up the Freescales and TIs? That’s a big opportunity.
SLD: But it’s more than just the software and the hardware, right? It’s also things like packaging. And the IP has to be thought about across the design and even across chip boundaries and geographical boundaries.
Hum: I just met with a medical company that integrates mechanical, chemical, electrical and physical.
Janac: One of the things happening to the customers is that companies used to doing all of their own IP are starting to focus on their commercial advantage.
Bruggeman: That makes a business for you.
Janac: And networking techniques are the best way to absorb this IP and integrate it. One of the things that mystified me was that at the architectural level the play is really the integration of IP and tools. The ESL market is a plant that is being watered year after year after year. It never grows and it eventually gets run over by a train. You have to let the customer adopt a PCB-type of methodology at the IC level. The other innovation is you want to expose the software stacks at the SoC level so you offer not just the hardware but a couple levels of software IP that get integrated at the software level. The EDA industry has done a miserable job of delivering on that even though that’s what the customers really need. Their margins no longer sustain writing all the software themselves.
Bruggeman: We’re focused on creation and not integration.
Hum: And I only want to pay $99 for it because that’s what the Microsoft suite costs me.
Janac: When you offer true value to someone they’re willing to pay. It’s only when you offer something they don’t want that they won’t pay.
Hum: I don’t think that’s true. People get trained for what they’re willing to pay. Ikos Systems had a simulator that ran 1 million times faster than a digital logic simulator. It really solved the problem. If you want to simulate your software stack on that it works great, too. The hardware guys will pay for that because they’re conditioned to pay for it. The software guys won’t.
Janac: We need to extend into the software stacks. They’re not used to paying for this, but their problems are becoming bigger and bigger.
Bruggeman: That’s not totally true. I come from that world and we sold open source software.
Janac: What was your revenue?
Bruggeman: $400 million. For free software we did pretty damn well. The customer was conditioned to not paying anything for open source. Yes, you have to re-train the customer and that’s non-trivial. But you have to tie your business model to the value of what the customer is getting and we don’t do that. We want this panacea of delivering the same value and we’ve lost the link between what we charge and the value the customer receives. We have to tie the value to the pain the customer is feeling, and that clearly extends into the software space. This is a huge challenge for us. Most of us can’t spell software.
Tags: Arteris, Atrenta, Cadence, Magma, Mentor Graphics