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January 14, 2008
What if a Marketer From Outside EDA Were to Run an EDA Firm?
Please note that contributed articles, blog entries, and comments posted on EDACafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
Jack Horgan - Contributing Editor


by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!



Introduction


Most of the press announcements that I have seen on new executive hires or executive promotions tout the long and multiple company EDA or possibly semiconductor experience of the person involved. One could make the case that the EDA industry is a highly technical niche and therefore requires executives with relevant experience. Other industries routinely hire executives from outside their arena. The computer industry has two notably examples, one good and one not so good. Apple hired John Sculley as its CEO from PepsiCo where he had successfully launched the Pepsi Challenge campaign against Coke Cola. He ran Apple for 10 years. IBM hired Lou Gerstner the CEO of RJR Nabisco, Inc. who had
an 11-year career at American Express before RJR. He made the elephant dance.


If one hired a person with a marketing background to run an EDA company, what would you expect; crisp marketing positioning, superior collaterals and so forth. When Altium, the only Australian EDA company, wanted to hire someone to run its Marketing operation there was no native EDA firm to recruit from. So they went elsewhere and hired Emma LoRusso. Altium later made her president and chief operating officer. I had an opportunity to interview her recently. From the interview and the company website you can judge how this has worked out.


Would you give us a brief biography?

I joined Altium three years ago, originally to head up marketing. Prior to that my background was basically business and marketing. I was general manager of a commercial printing company in Sydney, advertising and graphic design. I joined Altium in the marketing side and worked my way up to Chief Operating Officer. I have been in the role of President and COO for 12 months now. I have no EDA background which is hard to find in Australia. There are not many EDA companies Australia in fact none other than Altium doing anything remotely like what we do. But having worked for some technologies companies, particularly with McClaury Bank and looking at different companies that we were investing in, it was just a very compelling story to go to work for this very exciting global company. It is based in the Northern Bases which is where I live. Originally to look after their go-to-market strategy. Great technology but how do we take that market? It was a lovely mix of my skills and the organization. Then, just realizing that when you have such a compelling enterprise solution such as Altium Designer, an electronics product development solution, that one of my skills that is required there is to be able to synthesize that message and make the compelling story for engineering management organization. That’s where my background was really able to come into play. Also I partnered very well with Nick Martin, our founder and CEO. He is also the CTO (Chief Technology Officer). He focuses on the strategic direction for our technology and products. I worry about making sure that we are able to take that to market and synchronize the organization behind that. I love it. I am enjoying it immensely. I am enjoying the global scope. We have 97% of our revenue outside Australia, yet we have 98% market share in Australia. It is a very interesting scenario where the total focus is on the world and the different dynamics. Being able to see how globalization and off-shoring are impacting across the regions. It is something we are able to observe, predict and be ready for. We are seeing a lot of strength and growth in Asia Pacific markets. We are seeing that continuing. At the same time we feel our technology is one that affords companies where the product design is being crafted and where features of the product are being determined that we have a solution that makes it really easy to focus on innovations that differentiate a company and their product with respect to their competitors. A very unique product that allows the focus to be there because it removes the barriers that are there with disparate tool solutions and makes that easily supported because you have a unified system through a single data model and version control to be able to outreach
that across a global network further down the supply chain.


Altium and all other EDA firms are essentially technology companies selling to knowledgeable, technically savvy customers and prospects. This is far different from marketing household goods to consumers. I suspect that the majority of EDA marketing executives came from within the EDA community or possible the semiconductor industry. Have you found it to be an asset or a liability to have come from outside the EDA community in terms of doing the marketing for Altium.

I thin it is an asset because if it can’t be synthesized where you really focus on the benefits as opposed to the core technology feature which might be really exciting to a user that it is a good thing that is going to make their life different but you don’t know how that’s translated into time saving or cost saving or having an environment that really supports innovation and being able to tie more to the business story. I think that is where not having an EDA background provides an advantage in being able to do that, to be able to truly explore it in a way in which you think needs to be compelling to an organization for them to understand why go through the pain of retooling, why approach design in a different way. I think that has actually worked to my favor. One of the things I will not say is that you have to be a quick learner. It has not been very easy. I think it is possible if you have a strong desire to learn and a love of technology. For me one of the things I found always very compelling and I continue to do today is that I really believe in our company’s vision which is that we focus on helping people who want to create an intelligent device, get that to market quicker than anyone else. Our company is one hundred percent focused on that unlike other EDA companies who support ASIC design as their core business. They have their top 20 customers that bring 80% of their revenue and they make so much of their revenue from professional services. We are 100% focused on the electronics designers as a person or as a company who are trying to bring a product to market, trying to do something different, take advantage of a program or hardware so that they have true time to market or in market possibility of delivering new features, competitive differentiation. This is where we are focused. This is not a sub business, not part of our business. This is our sole focus, 100% commitment. All of our technology goes into the box. It is a shrink-wrap solution. People can take advantage of it the second they get it and deploy that in their organization. Companies are looking for that. We see extended design environments with our desktop NanoBoard. This is a highly reconfigurable development environment that affords again a number of advantages by allowing them to interact live with their design and be able to plug in whatever their choice of FPGA daughter board or plug-in peripheral boards. That really allows them to be able to see how their design is going to execute without having to go back to the redesign process. Our system autoconfigures around whatever set of peripherals are in these NanoBoards, making the process kind of focus on what you want your product to do. So designing in the intelligence rather than
manufacturing in your differentiation.


For me that made it easy to know where we are focused and therefore know what the benefit is of someone approaching design in a new way with an off-the-shelf solution that is made available. Our philosophy is to make sure we remove the barriers to having people get access to our product. So we have packaged it in a way to make it widely available. We put the best of our technology in the one product.


Surfing the Altium website I see some impressive graphics. Altium’s corporate brochure is as good as if not better than the major EDA firms. It would appear that you have a lot of time and effort developing these collaterals.

The thing is that all that collateral exists in a world. You can do it great or you can just do it. My view on everything that we do is that we want to do it great. The power of digital media today given that engineers see it mostly at their desk. They communicate through the web. They search. They learn. They find out what’s new. They forward links to their peers, colleagues and managers. Most media is being read, viewed and searched on a network. That is the area where we want to spend a lot of time delivering. We have invested a lot through everything from an on-line training center which is by far the most comprehensive in EDA, the demo center and now we are bring highly visual documentary style videos. When you have a look at the one that supports 3D design visualization that has just been delivered in 6.0, that was to really show what the value and what the intent was and then to actually hear that from the head of development and his team that were involved in that as well as from customers who are using it. That to me tells a much stronger story than trying to just write that down in a “what’s new” type of exercise. If you want to dig down deeper, look at the development training video. If you want to know how to do it, you might want the more technical demo. Or you might want the tutorial or the more pdf style how-to study
guide. That all exists. I think that highly visual way of communicating concepts is a very powerful way. Besides what we are doing is so unique, so different and so disruptive to the current EDA world. We are creating a new product category. We are the only ones there in terms of offering. We are the only vendor with a truly unified solution. It is hardware design, programmable hardware and software design capabilities within a single system with a single data model, version control and single project management that sits across that. It is not integrated it is unified. You make a change in your PCB or FPGA and it will automatically synchronize between those two domains.


People will talk about these concepts. It is not like the concept is a challenge. I have often talked to different companies who say “That sounds great but is it really true? Is it possible to be true?” We have been doing this. We have been in business over 21 years. It has been 8 years in development that we have been building the unified system. It is incredibly big and very comprehensive. We are now out winning not just where we originally played but we are now out winning the other vendors premium positioned products because of the depth of technology that exists in the product. But it is packaged and communicated in a way that makes it easy for people to get
their hands around.


You mentioned that 97% of Altium’s business is outside of Australia. In the EDA world most companies have a significant percentage of their business outside their home country but perhaps a third or more lies within their home country. Does Altium’s situation present any significant or special challenges?

The rest of the world is on a different time zone. We tend to work more 24/7 to accommodate the fact that we are supporting our teams that are operating 12 hours out of the 24 hours that is available to you. The use of technology whether email or video conferencing. I’m in the US office this week. I was in the European office last week. Many of the senior management travel around. We do a lot of movement of our teams around to make sure that the culture is fostered in the way we want and that learning is able to be shared. The distance adds complexity. No question about that. But the beauty of it is that we do not get bound by any one kind of region dominating the thoughts and views of the teams that are developing, marketing or looking at where we are heading moving forward. We have this kind of lovely view of the world to see what is really happening there, what are the global trends, what has globalization done. You can say that is all off-shoring. But for anyone who is trying to create differentiation in their product by trying to maximize that in their hardware and to optimize their board design that is just not going to do it for them. They are just not going to be able to stay competitive because someone is going to be able to do that quicker, faster and cheaper and have that produced in next to no time in China or somewhere else in Asia. Really what needs to be done there is have a system and have a way making it easy to design in your differentiation which is your IP by using platform programmable hardware that allows full possibility in how to execute your design. As the trends continue they are more widely adopted and available, prices are coming down, performance is increasing, more data available to do more. So just like the microprocessor exponentially grew, the same thing is going to happen. It will be a system like ours that has been built from the ground up, architected so that becomes the core part of that, provides advantage to customers who would want to adopt that from the outset as opposed to just seeing FPGA as a
separate component.


One hundred years ago I worked for a company called CADAM who bought PCAD. IBM bought CADAM. IBM sold off CADAM’s mainframe and workstation mechanical product lines to Dassault Systemes and renamed the remainder Altium. They then sold the EDA portion, evidently to someone in Australia. I noticed that last June Altium announced the retirement of the PCAD product line over some 18 months. How has that retirement gone? What was the response of the PCAD customer base?

In honesty the customer base were not happy to hear that the tool that they have expertise in and that they know how to deliver their design and answer to their management that they can do this and that in a given timeframe would no longer be developed. We have really focused very hard on making the migration as easy as possible. We have done that through a range of things; a seamless migration of file formats, extensive training available, special support for customers doing that as well as online training, dedicated support teams to be able to do that. And then a nice migration offer to make it easy for them to move from PCAD Intelligent Designer. The core of that is that we are just being honest. This is where we see the future and this is where we are developing our products. We believe that for you to remain competitive as an employee, to future proof your career, but also to future proof your organization, you need to move in this way. It is different in its approach. The biggest thing you are overcoming is that someone is an expert in a domain today and you are asking them to relearn. We have focused on making that really easy. So 18 months later we have seen a large number of our customers make the transition over and we will continue to help them do that. But we have started to move on the critical mass. We did not listen to our customers that we should
continue to support it. We did not think that was the right thing for them or us. So we have moved them across.


How large an installed base did PCAD have?

We have just over 4,000 customers, probably 3 to 4 times that number of users.


Do you know how many users have migrated?

I would say that we are well over half who have made the transition. We have allowed those that were on maintenance to be able to continue their maintenance and apply that to the Altium Designer. PCAD had a pretty good maintenance take up. We gave that option for the customer to be able to do that whether they wanted a time license, a perpetual license, a traditional upgrade or a license plus maintenance. Customers were able to transfer immediately.


Is all of the development team located in Australia?

We have a very big development team in Sydney, a big team in the Netherlands, a team in the US and a team in Tasmania which is where Altium started. If you are not familiar, Tasmania is a little island that sits under the main island of Australia.


In terms of sales where does Altium do direct and where do you have resellers and distributors?

The major regions of America (North America and Canada), Germany, Switzerland, France, Scandinavia, Japan, China and Australia all have direct sales. In the US we have a number of offices. The one in San Diego is our head office. We also have offices in San Jose, Chicago and Boston. The rest of the world is covered by an extensive value added reseller channel that covers the rest of Europe, Asia Pacific and South America.


Were most of the PCAD resellers also Altium Designer resellers?

PCAD was primarily just a big North American client base with probably under 15% or so being European based. It was never widely proliferated from that point so that the majority of our PCAD resellers with the exception of Korea (PCAD was reasonably big in Korea) were also Altium Designer resellers. We have been very successful because of multi-language support, true type font support. We support Japanese, Chinese and Korean in our product. That is one of the key thing in helping the migration to Altium Designer as well.


Altium Designer is your main product. Version 6.8 was released in late November. Would you give us on overview and cover what’s new in the latest release?

Altium Designer is the world’s first unified electronic design system and by that I mean that it is a single platform that allows for everything from concept through to manufacturing, so design entry, PCB design, programmable hardware systems design as well as embedded software design. Version 6.8 is significant in terms of what that represents in completing that. It is the first C to hardware compiler which allows literally at a tick box the possibility for a system designer or embedded software designer to able to execute their design and see how that is going to perform on an FPGA in a seamless way, to allow them to do it without having to know anything really about
hardware. That is the basis of the system. You can be a board designer and you do not have to know anything about FPGA to port and use the FPGA as a base to push as much of your previously hardwired design. You are able to do that in a software design way on the FPGA. You do not have to learn a different language or know anything about FPGAs to do that. A great unified system together with the NanoBoard allows someone to have a complete electronic design, a development environment that is highly reconfigurable, very focused.


3D design visualization. We have one system. We focus very much on the usability aspects, making it easy to design. A highly graphical interface. You are ultimately building a 3D product. You should be able to visualize what it will look like. This development environment with a desktop NanoBoard and then easily re-port that reuse bits of design in either in that environment or in your custom PCB or the next time you are going to do a design reuse parts of your design and re-port that. Highly, highly configurable. Very much around design reuse, design portability, and design visualization. Removal of all barriers within the system. Design synchronization throughout. If you make a change in one domain, it is recognized throughout the whole system. It is a case of seeing is believing. It supports the latest FPGA devices. It is FPGA vendor independent so that you are able to do your design once, plug your daughterboard and down load that design. Then if you want to see how that is going to perform on another FPGA, you plug in that daughterboard. It autoconfigures to that. You get the ability to see in real time and to interact with your design live how that is going to work. For someone looking from an economic buying perspective, you are not really bound to any single vendor, you do not get caught where you have had to pre-select your device, have to pre-select how your
design is going to be executed before you have actually started the process of doing your design. We allow for that to be completely fluid right until the end including post the design.




What are some of the features of the new version?

The main thing we delivered was real time 3D design visualization. That is very compelling. I encourage you to have a look at our 3D video just to get a sense of what that represents and how the board is able to be explored. We delivered the SETA hardware complier. That was one of our big areas, being able to execute your software design into the FPGA without needing to know anything on the embedded side. A very simplified introduction into signal harnessing objects. I’m just going through the main features such as differential pair support. There were over 300 features that were delivered into the product. They are mostly significant features as opposed to just enhancements and
minor features.


What is the pricing and packaging of Altium Designer? Is it a monolithic package or a base with optional add-ons?

Basically, it is a very flexible system in terms of how it deploys. You have the option for the unified capabilities which together with the NanoBoard ends up being approximately $15,000. But you can deploy the foundation throughout engineering for around $5,000. All of our technology comes in the box, all the IP is pre-synthesized. You do not have to look to do that as part of your design flow. You can have confidence that this is all been kind of pre-optimized and shipped in the product. Your job is plug & play.


Is the licensing perpetual or time based?

We give all those options to the customer. Our view, part of our philosophy of removing barriers, is having it how customers want to license. We offer perpetual and time based licensing. We offer software assurance or maintenance if that’s the way a customers feels more inclined to not worry about whether they have the latest features.


You said that no one else has as integrated or as comprehensive solution as Altium. Who do you see as the principal competition?

It is an interesting thing. We don’t have just an integrated solution, it is truly unified, so a single system. From that perspective there are no competitors. In terms of who we are displacing, I think it is the major EDA vendors. This is beyond the low end products. We are now competing against the 10 times the price options available from the majors; you know Mentor and Cadence offerings. Winning if not from this is just a better away of doing what I did before or a more efficient way of doing what I did before but this is a much better way of approaching electronic design. This is a huge step forward. If you want to really differentiate, our technology is quite disruptive
to the industry. It allows a company that is trying to get that advantage.


On the embedded side again there are different players out there but their proposition is very different from what we have to offer. Again it is making this widely available to people who previously would not have been able to play in all these domains. If anything it is the solution that bypasses the need for a specialist FPGA engineers.


Do you see the overall market for Altium Designer growing? Is the growth principally by cannibalizing from competitors?

I think we have a lot of traction taking market share that exists out of the traditional domain. But where we see our future is what we are allowing is any designer today in a specialist domain to be able to become a system designer, a unified designer if you will. We draw the analogy going back to Adobe where you had your specialist typesetter, specialist illustrator, specialist PhotoShop artist and production specialist. Today you can’t hire anyone and you would not want to hire anyone that does not have all those skills. Use the Adobe Creative suite as an example because the tool and the interface between all those domains is so easy to work. Anyone of those functions within the design process including multimedia elements is what you want. Our solution is really saying for all those companies and for all those people who want to stay future proof and be able to influence the product design features of a product, you should be able to play in that domain, you should have that available to you, you should be able to influence that and you do not have to re-skill. You use the skills that you have today by having a system that supports that by making it highly intuitive and highly graphical. What that means if we extrapolate further in time, you might need to have a specialist engineering degree to be able to use a system to do these things. It is not
going to hurt you to be able to do more complex designs. It means that there is a market that we believe today together with the NanoBoard in a way we able to do these and by shipping the IP within our product we make it easy to put it into your custom PCB design. That actually opens a market that does not really exist today.


What end products or for what end markets are Altium end users developing? Is it consumer electronics, automotive, defense, ..?

The thing about our customer base, there are some 40,000 users of our Altium Designer. They vary from everything. We just announced that NASA has standardized on our solution. Not that long ago National Semiconductor. Everything from a whole deign center such as Houston that just standardized on Altium Designer, is creating electronics in the arm of the satellite probe, the electronics in the spacesuits to electronics in test and communication systems. We see it there. We see it at BMW. And we see it in Formula One racing cars. ResMed do all of their designs for the world leading slate. Cochlear global leading in hearing implants. We have a number of government agencies that use our software. It is also used by companies building remote garage door openers. It is varied in terms of large to small, from the single guy trying to bring his product to market, his niche. It is really varied. We can say it is communications, aerospace, and medical. In the consumer product area Bosch uses our technology. Siemens uses it. It tends to be a solution for someone looking for something different. It is more the friend if you like of the product manager who is trying to bring a new product to market. It is very strong in R&D, in those types of companies; Philips, Sony and Microsoft where it is new concepts being brought to market with a very easy out to manufacturing systems
that allows them to innovate and create and take that to manufacturing and do that seamlessly. It is really varied. It is not one strength. We are not pursuing one vertical. We do see a lot of alignments. When we go into those large organizations, we generally look for the team or division who are responsible for new product design. It is R&D or a certain team that is responsible for a fast changing product. Where they are not looking for the kind of basic solution where it is low cost and high volume production.


What is the annual revenue stream for Altium?

Being an Australian public company we report in Australian dollars. Last year it was AUX$57.5 million. We have had six quarter with 30% growth. Last quarter we reported a loss in product sales growth but maintained strong revenue. That was a short term technical hit from a management change here in the US. But the US has been in excess of 35% growth for the last 2.5 years.


How many employees does Altium have?

We have 325 people, 71 in the US.


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  • Virage Logic to Present at the Tenth Annual Needham Growth Stock Conference  
  • QuickLogic and Chrontel Deliver Simultaneous LCD and Video Output for Handheld Devices  
  • VeriSilicon Introduces VZ.AudioHD: A Complete, Licensable Audio Solution for Exploding High Definition Market  
  • Analog Devices Completes Sale of CPU Voltage and PC Thermal Monitoring Business to ON Semiconductor 
  • Avnet, Inc. Acquires YEL Electronics Hong Kong Ltd.


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    -- Jack Horgan, EDACafe.com Contributing Editor.


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