Introduction
Altium is an unusual company in that it its headquarters are in Australia. The firm has been around since 1985. Most of its business has been in the PCB arena but the firm now seeks to expand into FPGA and system design. At DAC I had a chance to talk with Nancy Eastman, President of Altium, Inc, the firm's US subsidiary.
Nancy's previous responsibilities included directing international sales and support and managing engineering after Altium acquired ACCEL Technologies in 2000. Nancy has over 25 years in developing and marketing software for engineers including 14 years in EDA. She has been in her current position for 5 years.
I should note that I once worked for Altium, actually a different Altium. After IBM sold its mechanical CADAM mainframe and workstation business to Dassault Systemes, the company changed its name from CADAM, Inc to Altium in order to avoid confusion with the product name CADAM. The remaining parts of the firm were Microcadam, IBM CAD, P-CAD and a joint venture in Japan. After the mechanical businesses split off, IBM sold Altium to Accel Technologies in 1995. Protel International acquired Accel in 2000 and in 2001 changed its name to Altium Limited.
On a quarterly basis I do a financial report of the EDA industry including Altium. Your firm is the toughest vendor to track because you report in Australian dollars with a geographical breakdown in terms of local currencies. How has the firm done in US dollars?
It's very difficult. We have performed very well year over year but the US dollar has weakened significantly against the Australian dollar. Where in fact we might have done 12% or 15% better it turns out -2%. It just kills us. Last year we did about AUD $42M. The exchange rate in today's dollars is about 75 cents, so US$32 to $33 million.
What's new at Altium?
We have expanded way beyond the PCB world into a holistic approach. We've created a brand new corporate brochure that reflects a lot of things that are happening at the company. We are going through a significant change. Our new product name Altium Designer is a product that spans three industries: PCB, FPGA and the embedded system industries. A single product, a single executable with many different individual brands and also licensing options of the Altium Designer product. You may be familiar with Protel, perhaps Nexar (the FPGA system) and our recent announcements regarding document viewing, PCAD release and so forth.
Let me give you a picture of where we are and why we see it as so significant. I describe Altium Designer as a kind of umbrella. Basically there are three industries as I mention. PCB, traditionally that has been the Protel product, FPGA capabilities released last year as Nexar, then we have the embedded systems that traditionally has been Tasking technology, these are compilers and debuggers that have run on hard processors. What we have done is brought that technology in so that we have compilers and debuggers running on soft cores on FPGAs in the Nexar product. All of that is called Altium Designer. A single executable. We have licensing options so that we can access different technologies or we even have a technology that covers all design entry whether it is for the PCB or for the FPGA, which is a product called Circuit Studio. In the future we will be able to have licenses for roles within an organization for example a CAD Librarian. A CAD Librarian might need pieces of this and that, some editors and some graphics capabilities to put the libraries together. Another role might be just the compiler and debuggers for targeting soft cores. So you can see how we will be able to grow. We can add technologies and we can assign them to any particular role we want, a great deal of flexibility. Altium Designer will be our new brand name moving forward. That's what's happening.
Altium Designer is significant in several different ways. We are spanning, truly spanning; a single product integrated between these three domains. But we also see that Altium Designer is available at a very important time in the industry. If we go back and look at microprocessor growth from the beginning, it was about 20 years when microprocessors became a commodity. After it became a commodity, it then allowed the microprocessor to be used in incredible ways people never thought about before. Put it in a toaster. All of those things we take for granted now. What happened at this point at the commodity juncture, it basically created a new industry, the embedded systems industry. What we see is the fact that the FPGAs are on a very similar curve. We are about 20 years out and these FPGAs have now become a commodity. We are at the point where we are starting to see embedded intelligence not only having the advantage of application software being reconfigurable and all the benefits that go around that, we are seeing that the entire system can be reconfigurable, the hardware and software side, soft microprocessors, soft peripheral interfaces plus the application software that run on them. All that will drive a new kind of thinking, a new paradigm in the way we approach electronic products. It is in preparation for this very steep curve, this flexibility that Altium Designer is already available for that approach to electronic produce design. It does that because all of a sudden the barriers that had been between these three industries come down. If all of a sudden you have things set up and you had an algorithm in software that you decided to tighten it up, so you create it in hardware, move that logic with relative ease. The same interface, the same integrated code. The same thing you can move logic between PCB and FPGA much more trivially. As we go forward moving from a PCB that is fairly complex that has an FPGA on it, it may have a processor on it and all the peripheral interface logic in hardware and then you might have your physically connection out and of course your application code running on your microprocessor. Altium Designer handles that case. We can handle the software development with the Tasking product line, we can handle the FPGA with the Nexar product line and we can do the PCB with the Protel but what Altium Designer does is move us into the future so that we look at a very simplistic PCB; put almost everything, all of your digital logic, and stuff it into the FPGA. Of course you have the analog and that has to remain on the board. And you still have the connections to go out. What we are saying is that more and more of your stuff is moved into a soft domain. This has incredible capacity, it has an incredible future. We say that Altium Designer future proofs you product design because as a company makes the transition from designing traditional ways into stuffing more and more logic into reprogrammable devices, this product is there and it is already allowing you to do that in whatever timeframe the company desires.
Some of the advantages. Part of allowing this transition is breaking down these barriers. What does that mean? The Nexar product is our system design product in the FPGA space but it has some special characteristics. In the first place it comes with intellectual property. Included in there are IP cores 851, Z80 and a PIC, very basic 8-bit processors. We have the TSK3000, a 32-bit Altium processor with a small footprint, Harvard architecture, FPGA ready. We support the PowerPC through the hard processor inside the Virtex II Pro from Xilinx along with reprogrammable fabric. We have interfaces to that PowerPC and debuggers to support that. Additionally we have IP for high level things such as CAM interface, VGA, basic logic timers, adders, multiplexers … We have another interesting class of IP, virtual instruments. If you are testing a PCB, what do you use? A logical analyzer? We have virtual versions of instrumentation to test a PCB: logic analyzer, clock, clock control, frequency tester, digital I/O and so forth. You can set and also detect signals. We have taken this IP, test it and synthesized it for a range of target architectures. All of this IP can go to Xilinx Spartan (all of them), Xilinx Virtex (any of them), Altera (Cyclones, Stratix) and also Actel ProASIC+. We will continue to work on this list but that is what is available today.
Pre-synthesized, ready to go. All of the logic is tucked away and you don't have to worry about it any more. We are schematic driven. We have a schematic for the FPGA. You build up your system in the same way that you build your PCB. You take logic and add it to your design. In this manner, not in a single system manner, which is traditional today, to view the FPGA as a single piece of code. We are building a system using logic blocks in the same manner as a PCB is built. You can have a microprocessor, maybe a second microprocessor; we can add memory, some peripherals. You might want to be driving a CAM bus. You might have some basic logic, whatever. All of this gets connected using wires in a schematic. We then synthesize and download it onto the FPGA. In this case we have a development board. It could be anybody's development board. There are a couple of special things. Virtual instruments get linked right in here, so we might have a logic analyzer and probe the signals going in and out of the microprocessor or we might add an LAX here to detect what is going on with the peripherals, maybe set the clock with a frequency generator. The point is that we can take these instruments and place them right into the design. We can synthesize the design and download them into the FPGA they are actually within our design. As with any microprocessor we have separate application code that runs on the microprocessor within the FPGA. The way we test our system is that we have gotten completely rid of system simulation. You don't need to simulate this thing together. How do we test that? We actually run the software on the processor. We examine it using virtual instruments, we have soft panels up. In that way we have this interactive hardware testing going on. If things go wrong we change the hardware by changing our schematic, re-download and re-run in real time to see what's happening. We also have boundary scan capability that would be standard testing and we have a full source level debugger. It's multiprocessor debugging. You have full debugging capability; register checking, memory, stepping thru, watches … the same technology as the embedded system. That's the description of the Nexar product.
The advantages of Altium Designer is that we take it one step further. The FPGA of course goes onto the PCB. Within Altium designer we can also create the PCB using what has been branded as Protel. All of the pin and gating swapping (lets say you have hundreds of pins on your FPGA) is very well coordinated. We have a very elegant way of pin and gate swapping and synchronizing the PCB schematic with the FPGA schematic. You can either set signals within the PCB and back annotate them and force the FPGA to use those pins or you can create FPGA and force the pin outs on your PCB. You can go backwards and forward. That's kind of the view we see. The really nice thing about that is it lets us break down a lot of these barriers. If you have a guy who knows how to do PCBs, today for that person to go to FPG design they have to acquire HTL expertise, simulation expertise,.. They need to source tools from different locations. They need to purchase IP. They need to put it all together. What typically ends up happening is that you focus on a particular FPGA. Yu make decisions very early. Things like your IP and maybe even your tools are very focused to that target. We are completely vendor independent. We are independent. If later on you want to convert this 8 bit professor to a 32 bit processor, you can do that on the fly. You pull them out. They have similar link ups. We have some nice capabilities for bussing to make that fairly easy.
If you want to pull logic off your PCB, you can edit your PCB schematic, put logic into your FPGA schematic. So you see that many of the traditional barriers have now come down. A single product, single solution that is completely integrated. Altium Designer will in fact speed up the progress and allow this to happen. More and more intelligence can get into the FPGA and provide benefits to those companies who are creating electronic products to have the flexibility that reprogrammable hardware offers.
One of the things that drove the commodization of microprocessors was price. Aren't FPGAs still to expensive to be considered a commodity item?
It is getting pretty close. You should go to the Altera website. They are posting prices. They are selling in small blocks. In quantity it is below $10. But if you think what is coming off the board, the microprocessor. Maybe the 851 is cheap but if the 32 bit microprocessor is coming off the board, the peripherals for you interfacing. The pricing is getting close to being affordable depending upon your application. Adding $8 to a toaster may not be competitive. However, the more and more stuff you can do. Let's look at revision, making multiple revisions. We have a TiVo box in my house. All of a sudden TiVo is able to have a new version, download and upgrade itself, firmware update and charge a premium. What's that worth to a company? It's this kind of flexibility that goes beyond pricing. And the pricing we have been talking about, over the last two years $25 to $12 for the same kind of things, Spartan II devices. Maybe less than 1 million gates. But even under 1 million gates you can make a pretty sophisticated system using 8 bit processors. You probably need more than 1 million gates with a 32 bit processor. It's getting there.
Is this new vision for the company come with new management or was it simply a natural evolution?
Nick Martin is our founder. This is his vision from the late 90's. The vision was focused in the FPGA area. If you look at our IPO document, it talks about getting into this area. I think it has been refined but this is the culmination of about 6 years of time. During that period of time we acquired Tasking and used the technology within Altium Designer. We acquired a lot of FPGA technology and did a lot of development on top of that. Of course the PCB was the core technology. The vision is Nick's vision and it has been a long time in coming, 6 or 7 years at this point. Very fortunate it is culminating at good time.
What is the availability of Altium Designer?
It is selling. It's priced at $12,995, relatively inexpensive. It includes everything: full Protel product, Nexar, common front end design.
How long has it been available?
The announcement talks about the renaming. We've been selling a unified combination since a year ago February. In that period of time we made significant enhancements. It came out with only 3 8-bit microprocessors. Since then we have made enhancements on the Nexar and on the Protel side. This has matured with 32 bit support. We use a wishbone bus on the backplane. All plug-ins. We've added support for vendors and in the IP area we've added PowerPC.
How many units have been sold in 18 months?
The majority of sales have been made to PCB guys, Protel guys. I would say it has been selling very well. The reception has been extraordinary. We have not infiltrated the FPGA world. Over this period of time we have learned. We were talking about PCB on a chip, then board on a chip. We have been learning about messaging. We finally feel that we have the correct positioning. This had to with our announcement of Altium Designer. It really was the fact that we can solve entire electronic product design. This is our new position. We are selling it as an electronic product design solution not an FPGA world. You've got Altera and Xilinx out there. They have microprocessors. People are using those products relatively successfully. They have barriers. Devices get changed. The system level simulations become more burdensome. Our interactive approach gets beyond that and gets rid of that because we never have to do simulate the entire system.
If customers have FPGA expertise they can of course make their own HTL code, embed that right into their design and when we go to synthesize that all together we synthesize a custom block as well as any IP we provide from our libraries. So we have the capability for customers to expand the system and put their own IP into a library.
Is there an upgrade or migration path for existing Protel users?
Yes. Protel sells for $9,995. The upgrade price to Altium Designer is slightly more than the difference around $4K. We have made some good in inroads in our own customer base but we believe infiltration is not limited to that base.
Even though Altium is an Australian company, I understand that most of the business is outside that country.
2% of the business is in Australia, 50% to 55% in the US, more than 25% in Europe.
What challenges doe this present? Most EDA firms are US based and have challenges overseas. Of course language and culture is not an issue here.
From the benefit side having a foreign based company adds value, adds a different perceptive in the way software gets developed, in the ways it is approached and in the ways it is marketed. There maybe some advantages there. We are more of a global company because of that, less US centric in many ways. The challenge in running an office in San Diego is of course that the home office gets snapshots. Whatever that snapshot is, it is never true. That's the biggest challenge on both ends. Sometimes they get ecstatic over things that are only okay and sometimes they seem to need to probe about things that aren't necessarily so bad. It is trying to paint a clear picture of how things are going on. It is probably a challenge that a lot of other people don't have who have a headquarters right there and are selling right here.
Where is R&D located?
R&D is spread around the world. A good chunk of R&D is in Australia. We do have some R&D here through acquisitions, some of the Accel people are still here. We also have a Tasking guy working in Massachusetts. The other big site, we have about 60 people, in the Netherlands, again through acquisition (Tasking).
What's the total headcount?
We are under 300. Somewhere between 275 and 300 people?
How many in the US?
Under 40, around 36. We are a sales and support office.
With a $12 product price, what is your sales model?
We have shifted our sales model a little bit. We go direct. Worldwide we have offices here in the US, Germany, Switzerland, Japan and Australia. In smaller markets we have VARs. One exception to that is England. We have a VAR there, a long term relationship.
Direct sales, direct support. We have used a phone sales model very successfully but we are finding and this is one of the more recent changes with Altium Designer and the fact that we are spanning departments. We need to sell up. Our traditional field sales have been to end users. We have always been an underground company, grass roots. We are used to infiltrating companies this way on the Protel side. It has been very successful. What we need to do is to tweak our sales model. We have redirected our people to move up the ladder. The person who has this vision is not typically the end user. We have got to get to the engineering manager, the director and sometimes the VP, the person who has the responsibility for pulling everything together. We have hired some account managers for key account development. We are also educating our entire telesales organization to know how to reach into an organization. We are in the midst of changing that. That has happened since April.
The higher up you go in an end user organization, the greater the need for executive presence.
That maybe true. We have a global sales manager. Matter of fact we made a visit, a short notice visit, to a large company in Texas. We had a conversation last week. We've have visitors coming from Australia. The conversation was “We have so and so in town. Any interest in getting together?” We brought the global sales guy in from Germany along with a couple of people. That is the kind of executive presence we are ready and able to do. The company is mobile. For instance right now we have 6 people here form overseas. We are committed to making this model work. We will invest there. That is a change, to have a global sales position.
What level of support can you afford to provide for a $12K product?
Very interesting. If you take a look at who has this kind of vision, there are not many companies there. Let's take Mentor Graphics, they probably have the closest. There you can spend a very large sum of money to pull this together. We are a mainstream company. People who use us can not expect us to have a dedicated AE on site. That will not happen. If they require that to happen, we are not a good match for them. It is very important that we recognize that there is business that is not our business. If anyone expects to use FPGAs for IC flows, we have to be very, very careful about getting involved in that area. Sometimes we can do that. Prototypes are fine. But as far as feeding the IC business, sometimes the requirements are very different and may not be our business. Somebody who needs an AE on site, somebody who needs 24 hour support, we can not provide 24 hour support, although we are making changes to get to that point. We now have a customer care group. Issues that we don't get to by the end of the day we move to Australia. We are looking at being more proactive. There is business that we won't take and there is business that is not appropriate. We are a mainstream company.
Is Altium Designer limited to designs with one FPGA?
That's not a problem. We identify multiple boards in a chain. We identify all the JTAG enabled devices on those boards. From there inside each programmable device, we can identify the soft FPGA components. What that means is that our Nano board itself only has a spot for 1 FPGA. However, you can connect a user board with multiple FPGAs and we will recognize them.
Is your primary market designs with only one FPGA?
Not at all. Very complex systems. There are two ways to mock that up. First, you could have a user board that already has multiple FPGAs on it or you can create a test environment by stringing multiple Nano boards together. The system can be and is prepared to be very complex: multiple FPGAs, multiple processors, multiple peripheral devices.
Does the schematic approach map well into multiple FPGA designs?
Absolutely! What ends up happening is that we have the concept of a project. A project basically consists of one or more PCB schematics and an FPGA schematic for each FPGA. There can be any number of these.
What end user applications is the Altium Designer best suited for?
We are very broad based. If you look at the applications that would be exclusionary: very high end consumer products, very high volume that require high performance that would justify an ASIC. They are not the applications that would be good for us. Wherever an FPGA makes sense from a fiscal and from an operational standpoint, Altium Designer makes sense. There are industry drivers that make it not practical. Those might be where the cost of an ASIC is justified because of the high volume. There may be some other instances where the clock speed is beyond where the peripherals that we are providing operate. Again high speed applications might be exclusionary. Our target is mainstream, 80% of all designs. Niche areas we are not targeting are probably 15% to 20%.
Whom do you see as your primary competition?
We are in a very unique position at this point in time. We have competition from a couple of different places but don't feel it is particularly direct. For instance Mentor has pieces. They sell pieces that one could describe as being a complete system. However, they are priced significantly higher. They target a different group of people. They'll argue that. They will say that they are mainstream but we don't see them in the mainstream market. Mainstream people can not afford the collection of tools required by Mentor.
The other area in the reprogrammable world comes from Xilinx, Altera and Lattice. We see the value there. We have added value in a different way. That's part of our messaging: how do you do above and beyond what people are doing today with FPGA software. A lot of that has to do with the way it fits onto the PCB. The vendor independence that we provide, they can't. The multiple processors, the quality of software development, the interactive methodology for building and testing and so forth that we are providing that they aren't. It depends on how you define the market. If you say FPGA today, by far the competition is the FPGA vendors themselves. We do see our market as different from the FPGA market. Our market spans embedded systems and PCBs. And in that space we truly have no competitor other than Mentor but Mentor is not a true competitor in the mainstream.
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