EDA Inside: From Late Republic to Imperial Zone

When the Senate fell upon Julius Caesar in 44 B.C.E., ostensibly they did it to save the Republic. Unfortunately, the Republic was already long gone, having fallen victim to the excesses of power and consolidations of influence that had characterized the nation state for well over a generation at that point.

When the publishing industry fell on Richard Goering in 2007 C.E., ostensibly they did it to streamline coverage to more effectively serve the Republic of EDA. Unfortunately, the EDA Republic was already long gone, having fallen victim to the excesses of power and consolidations of influence that had killed the innovation state in EDA for well over a process generation at that point.


You think I’m overstating the situation? Do you know how many people have suggested to me, since the news broke on June 14th, that Richard Goering’s dismissal was tantamount to the Death of EDA? But is it really the Death of EDA, or the Death of the Republic of EDA? What is really going on when the single most influential journalist in the industry is laid off?

Here’s one spin on the story …


Your tools made chips denser and faster, which made data aggregation, manipulation, and transport more efficient, which enabled the PC and the Internet, which facilitated globally distributed design teams, which fed into the ever-present desire to reduce labor costs by additional outsourcing from higher overhead and direct cost economies to lower overhead and direct cost economies to bring down the cost of design, which threatened the historical design communities in North America, Europe, and Japan. Meanwhile, the tech boom turned to tech bust as the losses of 9/11 were layered on top of the unraveling of injudicious over-investments in dot.com and telecomm and Y2K, which led to precipitous declines in revenue for EDA vendors trying to sell into a struggling customer base, which was itself selling into a struggling customer base, so that everybody’s bottom line declined sharply, which led to fewer discretionary dollars for things like PR and advertising – particularly print advertising – which led to fewer ad pages and lower revenues for publishers and further motivation to put content, ads, and marketing campaigns online, because the cost of electrons appeared to be less than the cost of trees, ink, and mailmen, which was possible because the PC and Internet were being enabled by denser, faster chips.

But, the revenue from electron-based content, ads, and marketing campaigns was lower because the ROI for such spending was even more obscure to the advertisers, so there was even less money to be earned in publishing, so the publishers had even fewer discretionary dollars to spend on paper, ink, mailmen, and editors. And editorial heads began to roll. And the list of distinguished journalists who found their jobs and/or publications cancelled out from under them began to grow alarmingly, and the PR community had less and less access to editorial platforms for their clients. But then, even after the end-customers and their vendors and their vendors’ vendors – the EDA guys – started to recover with the uptick, particularly with the ferocious onset of worldwide demand for consumer electronics, the publishers could not recover from the irreparable damage that had been done to their paper-and-ink business models, and all the while, because of your faster, denser chips, the Internet got even faster and denser – but not necessarily more lucrative to the publishers – and the whole thing spiraled even further out of control, exacerbated by more and more self-publishing pundits throwing themselves into the online fray.

And the Big EDA vendors looked out across this shifting landscape, and added into their calculus the fact that faster, denser chips were harder to design and more expensive to manufacture, so the number of ASIC starts was beginning to decline – precipitously – so the customer base was beginning to shrink, and those same EDA vendors would not or could not innovate fast enough to satisfy that shrinking customer base to the extent needed to inspire the market to grow, or investments or stock valuations to climb, and so they decided to work even harder to corner the market with their suite of offerings. Meanwhile, many customers began to consolidate their R&D dollars through cross-corporate collaborations and hence began to revisit the ancient art of making their own tools in-house, and even worse, started to turn to other sources such as aggressive fabs and mega IP vendors for aid and assistance, so that the EDA vendors became even more obsessed with reaching out to just their own users and their own legacy markets – as well as to those same aggressive fabs and mega IP vendors – and worked even harder to guarantee lock-in among their customers, and increasingly concluded that their declining discretionary dollars were badly spent on industry-wide conferences and print ads, or even online ads, and were better spent on focused user conferences, focused online newsletters generated by their own in-house staff, and bigger compensation packages to reward their leadership for their pain and suffering and business savvy in a transient world.

More and more, the EDA vendors began to ask why they should be forced to support media outlets or conferences where independent-minded journalists continued to insist on saying whatever they wanted and overtly/covertly continued to resist the relentless shove coming from their publishers in the direction of ’sponsored editorial,’ the journalists clearly and continuously refusing to acknowledge their moral debt to the financially-strapped advertisers and economically-crippled publishers. And the thing spiraled even further out of control. Until one day in June of 2007, the Internet and the mess and the outsourcing and the in-housing and the over-investment and the under-returns and the shifting sands and the crippling and the spiraling and the madness and the pain and the suffering and the consolidation reached a climax and the unthinkable happened. The legendary Richard Goering was laid off, the PR community, starved for access to editorial platform, lost yet another long-cultivated conduit to that platform, a cry of collective pain went up, and …

… the Republic of EDA died.

Although, in truth, it had died quite some time ago. Already in the era of the Late Republic, the Big Three in EDA owned 50 percent of the market. Now in the Imperial era, the Big Four own more than 80 percent of the market. Good news for some constituencies, but not so good for others. More than a Greek tragedy sheathed in a Roman toga, the whole saga is downright Elizabethan, particularly for jettisoned editors:

“Et tu, Bro?”


News from in and around DAC …

It is my intention next time here in EDA Weekly to complete my DAC report – assuming EDA has not died in the interim. Meanwhile, among recent news items in EDA you’ll find three acquisitions, three endorsements, a conference, and the end of a rumor.

Mentor Graphics acquired Sierra Design (discussed in EDA Weekly on June 18th), Synopsys acquired ArchPro (see below), ARC acquired Tenison Technology EDA (also see below) and VaST announced endorsements from LSI, Freescale, and Infineon (below, as well).

On June 14th, 160+ technologists attended the “Logic NVM 2007 – Inside Tomorrow’s Consumer Electronics” conference in Silicon Valley, which focused on embedded non-volatile memory in applications such as mobile phones, MP3 players, USB controllers, and Flash drives. Speakers included eSilicon’s Jack Harding talking about “Smaller, Faster, Cheaper, Better” and iSuppli’s Jordan Selburn. The panel discussion included folks from Chartered, eMemory, Kilopass, Sidense, and Virage Logic. FSA, Chingis, Elliptic, Intersil, and SiTime made presentations as well. Happily, the whole event is now available online at http://www.logicnvmevent.com/.

Finally, the DAC-week rumors quoting “unnamed sources” that Cadence was in buy-out discussions with KKR and/or The Blackstone Group were put to rest by way of yet more rumors during the week of June 18th, also quoting “unnamed sources,“ that all discussions were off. Undeterred, Blackstone went public on June 22nd in the largest IPO in North America in the last 5 years. Wow.


EDA Inside …

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