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September 01, 2008
SpringSoft a major EDA company with an interesting name and a more interesting business model
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!


In May SpringSoft made news by acquiring and merging several companies in which it had previous held equity positions. Novas and Silicon Canvas were the best known of these firms. SpringSoft has had monthly revenue between NT$10M and NT$12M every month since the beginning of 2006. In 2007 SpringSoft had NT$1,350 or US$43M in revenue and profit of NT$640M or US$20M.

With apologizes to the company the name SpringSoft sounds more like a laundry detergent than an EDA company. Naming a company or a product (really getting everyone to agree on a name) is not as easy as it appears. You want it to be simple, easy to remember and perhaps convey something meaningful that will last over the life of the company. You also want to avoid conflicts with existing product and company names. Chevrolet famously named a car “Nova” which in Spanish is no go. In a similar vein NBC came out with a new logo to considerable fanfare only to learn it was nearly identical to Nebraska Broadcast Company.

When I co-founded a company we used the name XYZ on our business plans before raising our first round of funding and really starting the company. When we actually began, we needed to give the company a real name. Our VP of Marketing wanted it to begin with the letter A so that it would appear near the top of any list. After we struggled for some time to find an acceptable name, I came up with the name Aries Technology with some help from my wife. After a couple of venture rounds the VCs got concerned that we did not have a strong mark and therefore another firm could enter our market space with a similar sounding name. I though the Fortune 500 list had many firms on it whose name
contained terms like International, United, American, and General. These obvious weak marks had not stopped these very successful companies. We held a contest to rename the company. After reviewing the entries the VP of Marketing announced that the winner was Aries Technology.

When I was Senior VP at MICROCADAM, the sales team approached me wanting to change the company name. They said the “MICRO” part gave it a negative image. I said Microsoft is the largest software company, SUN Microsystems is one of the largest computer systems and Ingram Micro is the largest technology distributor. We did change the product name to Helix when we launched a next generation version. Then the sales people came and said that they wanted the name of the product and the company to be the same, namely Helix, like SolidWorks who was a fast growing company at the time. I responded that the most successful companies in the mechanical CAX arena were Dassault Systems with its
CATIA product line, PTC with its Pro/Engineer and Windchill product lines, and Autodesk with its AutoCAD line. So whatever problems MICROCADAM may have it was not the name of the company.

I had the opportunity to discuss not only the SpringSoft name but also the business model and products with Scott Sandler, Vice President of Corporate Marketing and President of SpringSoft USA.

Would you give us a brief biography?

I was born as a young child. I started my career at Intel after graduating from the University of Massachusetts in Computer Systems Engineering. What I did not know at the time when I joined Intel was that they wanted me to be a verification engineer. Only in hindsight since that term hit the market did I understand exactly what they were after in me. I had a little bit of simulation in my education. This was in ’83 right at the moment board level simulation and IC level simulation were actually being instituted as part of the verification process. People were not even calling it verification at that point. I think they called evaluation engineering. I was supposed to figure out whether the boards worked. We ended up doing the first ASICs that Intel had ever done to put on Mutlibus2 boards. I ended up doing simulation with a variety of different tools validating those ASICs down to LSI logic, doing a bunch of timing analysis manually with spread sheets and applying some tools form other internal Intel processor projects to board level design including synthesis and optimization. And inventing a whole flow that was top down with behavior modeling, TRL modeling. That was a foundational experience for me because I ended up evaluating RTL tools and concluding that I liked the tools better than the design. I ended up going to Gateway, the first application engineer for
Verilog. That was a great move. I stayed there through the Cadence transition. I left the industry for a while, a little over a year, and then came back as a consultant. I spent five years at Chrysalis and then came to Novas in 1999.

Of course we have just gone through a transition which I worked through with SpringSoft management to merge Novas with several other SpringSoft portfolio companies in order to create a new global organization.

You may remember from earlier interviews that my advanced degrees come from UMASS.

I do remember.

Well, one of us made good.

I never got the advanced degrees. So there are tradeoffs.

Smart move on your behalf.

I don’t know. I just call a yesterday from the school of engineering, a fund raising guy. He is after me for more for my next five years. Unfortunately they read the papers.

Could you go back in time and describe the origins of SpringSoft. Maybe you could comment on the name. It sounds more like a laundry detergent than an EDA company.

Naming is the hardest thing. You have got to come up with something that sounds good, something that doesn’t sound pretentious. They came up with this name a long time ago. It really relates to kind of spring forth from our thoughts. It is sort of wholesome. I am not saying this well. I have not practiced this. No one has actually asked me that before. It refers to a spring, a wellspring of thought.

The origins of SpringSoft?

The guys who founded SpringSoft were originally working with Dr. Paul Hong and ECAD back in the day as they say, back in the early ‘80s. They were the ECAD Taiwan team. They were doing sales support. They were there through the merger with SDA to create Cadence, right there at the beginning of Cadence with Paul. They were the Cadence Taiwan team both R&D and sales. In the early ‘90s they decided to form their own company. They started out by doing contract engineering and some distribution. They also wrote some software. They got some investment. They bootstrapped from there by generating revenue before having product. Then they introduced the product themselves since they had
built a sales and support team in Taiwan. So that is the origin.

You joined them in ’99. Did they set up a US sales and marketing team? How did that happen?

That’s actually the unique and really special part of the whole organization. What they did instead of setting up a SpringSoft sales and support team in the North America, they decided and they really invented a business model by setting up Novas as a completely independent company. They were the initial investors but they treated that as a strategic investment. They set up a separate management team, a separate board. Their whole purpose was to be able to attract talent by the fact that the company would have independent equity and an independent direction. Of course it was closely aligned. It was the distribution arm for SpringSoft verification products and SpringSoft would be the
distributor for Novas products in Asia. And we would do joint development together. It was a pretty original concept. They got Dr. Hong to be the chairman and effectively the founder. They were able to have a strong starter in the US this way.

Were you at Novas on day one?

No, no! That was in the 1997. There was an initial team that came in. There was some turnover. But they got Debussy off the ground. I came in ’99. Debussey was already on the ground and had a team in place but needed to be branded. The point at which I came in was the point where we needed to brand Novas and establish it as an entity in the EDA market. We were not doing any branding of SpringSoft at that time. SpringSoft was behind the scene developing products and selling and supporting it in Taiwan. But in every other region, they set up these unique entities; Novas and in parallel Silicon Canvas for their backend products several years later. Also Novaflow in Japan. Where ever
you looked they set up these entrepreneurial entities where they were a board member, an investor and a strategic partner but not in absolute control.

It is not unusually for EDA firms or high tech firms in general that are US based to have some form of representation overseas with perhaps local involvement but it is unique for Taiwanese firms to come to the US. What challenges did you encounter with this unique arrangement?

This is going to sound strange but in point of fact no. Sure there are always challenges in business based upon my experience at Intel, Chrysalis and Cadence the fact that this arrangement, this business structure, was mutually beneficial to the extent that it helped overcome many of the internal political struggles you see in large corporations because we were focused on our objectives. We did not have a single global organization at those formative stages when we were immature. I think that worked very well.

You might ask what challenges we face now. I would say now that we are mature and we’ve known each other a long time, we are able to integrate the thing very smoothly without many of the challenges you would usually face in integrating such a diverse group of companies. So this model has been dramatically positive way. I know this will sound over the top but I absolutely mean it. It has been really surprising.

What has happened recently with these merger/acquisitions?

As we talked there was a model that had separate entities for distribution, marketing, branding the verification product and that was Novas (Debussy, Verdi, Siloti). There was separate organization for promoting, branding and selling and supporting physical design products, namely Laker. It was called Silicon Canvas. SpringSoft additionally invested in a startup called ForteLink that has been developing hardware assisted verification and simulation technology. They also set up back in 2000 a distribution company in Japan called Novaflow and worked closely with them. It has now acquired 100% off the stock of those entities. Prior to this they owned some of the stock. The percentages varied from company to company. It is really irrelevant. But now all of these became wholly owned subsidiaries. Then we merged them all together. So it is effectively one company globally. There is a legal entity in the US of which I am the president. That is simply a legal structural imperative and not a branding issue, a single global brand. The company also acquired a small startup here in San Jose called Nanovata, which is a routing technology company, led J. T. Lee who worked with Paul in various places, so knew these guys for years. But it was not a SpringSoft investment. This is kind a unique of element. It is different form all the rest. This is not like the others as they say on
Sesame Street. The only thing that was different is that is was not previously a SpringSoft which shows our willingness and ability to make acquisitions as well as to merge ourselves together.

From whom did SpringSoft purchase the equity that they did not already have?

To be flip, from the shareholders. There were outside investors in Novas. All of these preferred shareholders were bought out. Of course there were also option holders from seven or eight years of hiring people, granting them stock options, and having them vest those options. So they bought all the preferred shares form the outside investors and inside option holders.

Did they pay in cash or in a stock swap?

It was all cash.

What was the relative size of Novas, Silicon Canvas and the others?

Novas is clearly the largest. Silicon Canvas the second largest of them. Then comes Novaflow and Fortelink. They are both very small technology companies, kind of pre-product. So a few people each. Novas had grown to about 80 people worldwide. The combined organization is now over 400 people.

So of those 400 people, 300 were SpringSoft, 80 were Novas and 30 or so the remainder?

Right. 420 people, about 30 at Silicon Canvas. Around those numbers.

Novas had its own R&D operation but Silicon Canvas did not.

Yes. The Siloti product and part of the Verdi product were the output of Novas R&D. The R&D for Laker was done in Taiwan.

What was the prime motivation for making the move now as opposed to a year from now or a year earlier?

Great question. That is really important to understand. Basically the original model had fulfilled the objective. We had established a broad product line with strong brands and we had established a customer base. So there was a platform in place. What happens as you mature, you start getting bigger ideas and having to strategic direction. During the planning process last year, we realized that we would be stronger together henceforward than being separate. We realized the model had done its job. It was time for a new model that would take us into the future more strongly.

Would you explain the likely synergy between Novas and Silicon Canvas?

Let’s not look too deeply for technical synergy. These are tools that operate at very different points in the design flow. But of course the customers are the same; the IC design companies, whether they are IDMs or fabless companies they need these tools. Some companies need more on the verification side and some companies need more on the design side. But by and large when we go to work with customers there are different users but the management structures, the CAD teams, etc are the same people. So if you look at the management synergies, we now have a globalized management team that is quite unique. There are no other EDA companies that I know of that has executives both in
Taiwan and in the United States. That’s out unique structure. So we can leverage that talent globally. We each have our strengths. We put it all together rather than have five different management teams. It is now integrated. That’s a lot of leverage. There are shared functions in marketing and sales of course that can be leveraged across the product lines. Customers are dealing with a sales force they know and trust. Now that sales force has more products to offer them.

Where are SpringSoft sales geographically? Where is the customer activity the strongest?

It is a global market. That is the interesting thing. Customers might buy in North America but have engineers all over the world. That’s an interesting question to have to answer. It ebbs and flows. And as you know the overall global economy has its challenges at the moment. But when you look at IC sales, they are pretty strong. We are not having a subprime crisis in IC right now. People are being cautious but they are moving forward with the tools that give them ROI. That is what it comes down to. If you can show people that they are going to get their chips done more productively with better profitability and on time, they will look seriously. Where is this occurring the most? It
is really spread all around. I don’t really see a regional focus there. We all know that there has been a trend to shift seats and engineers from North America and Europe to Asia. That trend continues but I would say that we are over the hump in that and it is kind of stable right now. There is really a lot of consolidation in the IC space as well. You look at joint ventures that are being announced in Europe, spin outs and things like that. There is a lot of stuff moving around.

You have used the word “branding” several times. Are you going to be branding Novas, Silicon Canvas or SpringSoft?

Here is the brand structure. We are definitely emphasizing SpringSoft because that is the company name. We are retaining the Novas name as a product line brand for verification enhancement products. SpringSoft has a line of verification enhancement products that is the Novas line which includes Verdi Debug, Siloti visibility Automation System. We are also retaining the Laker name as a product line name for physical design products. So we have the Laker lien of custom IC design solutions. That is the brand architecture: SpringSoft, Novas, and Silicon Canvas.

Do you sell direct or use third parties?

We have a global direct sales operation with people throughout North America, Europe and Asia. SpringSoft KK has been created by merger in Novaflow. So we are direct in Japan. We have a joint venture distribution in Korea. We have traditional distribution arrangements in Singapore and India.

What is the latest and greats in the Novas product line?

The Novas product line consists of the Verdi automated debug system and the Siloti visibility automation system. We continue to enhance these products in order to bring more productivity to our users and enhance their ROI. The biggest news there is that we are on the leading edge with System Verilog testbench debug capabilities. This will be emphasized by us throughout the year in terms of promoting to our users that we are a technology leader in this space because we have invented some things that are unique and powerful. I think you are aware that System Verilog testbench is a kind of whole new animal compared to previous generations of languages. It really requires some unique
approaches when it comes to unified holistic verification across the design and the testbench. That is a big push for us. Siloti continue to grow. Its evolution is focused on the replay module which helps you delve into timing specific behavior. That’s an enhancement.

On the Laker side the interesting stuff is around PKs. We will have some announcements about that in the near future. Noting I can say specifically about that right now. Keep in mind that we were a founder of the IPL Alliance. There is really important work going on there that will open up the market such that people can more efficiently choose the best in class tools for physical layout, custom layout. There is some other major work going on in the PDK development. Stay tuned.

Novas had been lauded in the EE Times as Number 1 in customer satisfaction. How has Novas been able to achieve that?

That is a great scene to talk about. There is really no one ting. There is no great secret to this success. Basically you have to commit up and down the organization to putting the customer first. It sounds cliché. It is just amazing how many times you come to a decision point and you say “What does the customer need?” If you do that, you end up satisfying the customer. That does not mean that you give them the first price they ask for. Everybody knows that there is a negotiation that goes on around price. We do not do this by under charging. We get a fair price for our product. We promise X and deliver X+. That’s what it comes down to.

Who do you view as competition against the Novas product line?

In the debug space every simulator comes with a debug interface. There is waveform, source code viewing and various other features in every simulator. You can call that competition. What happens is that when users look at the Verdi system, they are able to conclude that they can cut their debug time in half. This result is the conclusion of survey after survey that we do on a yearly basis. We keep getting the same answer year after year as we enhance the product even as designs get more complex and the flows change. We keep up with that. Consider for example the System Verilog Testbench that I described for you. A year ago people were clamoring for that. We didn’t have a solution
for them. Our R&D team invented a solution. We have been rolling it out to customers. We will announce that in the coming months. That shows our commitment to staying in tuned, aligned with our customer’s advancements in their flows. That is really the competition. Do you stick with the built-in stuff or do you invest in something that cuts your debug time in half.

What is happening on the Laker front? Who is the competition there?

Clearly, Cadence is the dominant force in customized IC layout. However, they are lots of things that people need to do in customized layout. Laker does some of them things better than any other solution. There are a variety of other companies showing alternatives to Cadence. I think we have a very strong position there and a lot to offer in automation technology. That is our corporate position that we offer products that deliver unique automation technology that save engineers time. We do that with Lakers.

Good to see a UMASS guy make good.

Go Minutemen.

Editor: Colleges, universities and professional sports organizations give names to their sports teams. Some teams are called after animals (Bears, Tigers, Seahawks, Bruins, Bulls, Eagles, Lions, Bengals, Colts, and Dolphins). Some are named after their uniforms like the Red Sox and White Sox. Some are named after local industry such as the Green Bay Packers and the Pittsburg Steelers. And of course there is the Fighting Irish of Notre Dame. Some teams are given generic Indian names (Cleveland Indians, Kansas City Chiefs, Atlanta Braves, and Washington Redskins) or the name of an Indian tribe, e.g. Florida Seminoles. Indian activist groups have objected and campaigned
to change these names and the use of mascots dressed in Indian garb and war paint. This has become an issue of political correctness. For years up until 1972 the UMASS teams were known as the Redman. In 1972 the university switched to the name Minutemen after a militia type force in the America Revolutionary War which could assemble for a fight at a moment’s notice. The Minutemen were part of the first battle of the revolution at Lexington and Concord in 1775.

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-- Jack Horgan, EDACafe.com Contributing Editor.

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