Sonics: IP Pricing and Protocols

It makes it worthwhile to show up for work on days when you get to have a conversation with people like the folks of Sonics, a System IP vendor based in Silicon Valley. Articulate and knowledgeable, they have a nuanced understanding of how the IP business works, its challenges and opportunities.

When I spoke to them last week about my ongoing project to assemble IP for the chip in my Dick Tracy keychain, President & CEO Grant Pierce and VP of Operations Raymond Brinks were both on the call. We started by talking about how IP is priced.

Per Pierce: “The conditions under which various customers buy and use IP can be quite different. We have some customers who are fairly sophisticated. We sell [such customers] licensed IP, offer some initial training, and then off they go. After that, apart from an occasional email, we have little contact with them. There are customers, however, who are opposite in the extreme.

“Also, based on the type of IP,  some customers engage in a process where they only use the IP one time and that’s it, and [the pricing reflects that]. Our IP, however, tends to be used for multiple designs, so the pricing there is different.”

Referencing my design project, Pierce said, “For all of the IP you’ll be buying and pulling together in your chip, the process is going to involve your interacting with IP vendors who are in various stages of their own maturity and ability to deal with their customers. Often newer companies don’t like to quote numbers.”

“How much of your time is spent selling product and how much providing consulting services to help implement your IP in customers’ designs?” I asked.

Pierce answered, “This is the other part of the answer about how IP pricing is established. I wish I had a brilliant answer for you, but unfortunately I don’t.

“We are able to give a quote in the real world pretty easily for a block of IP, because we’ve been in business for well over 17 years – we’ve experience all of the different wants and needs of customers that we engage with. Nonetheless, we don’t just throw out a number and say this is our list price. We put a number on the table very quickly, however, when the customer understands that it’s just a starting point for the conversation.

“If you are shopping for IP for your project, you’ll quickly [see] it’s well understood that the IP industry even today, is still very much a continuously developing environment, and growing at a fast rate compared to the electronics market in general.

“[In fact], the IP business is growing at an astronomical rate, with lots of different business models. As an example, if you go to Synopsys – today one of the largest IP providers – and try to buy a single block of IP, good luck. It’s not sold that way.

“The only place I know where you can get a fixed price for a block of IP is if you walk into an ASIC vendor, someone who’s reselling IP, and that vendor says – I have a library, I charge an NRE of ‘X’ for your project, and I would be happy to build it for you.”

It seems like a very difficult and complicated environment within which to do business, I said.

Pierce agreed, “Sometimes we’ve ended up licensing IP sometimes through an ASIC, and it can be very confusing. What is interesting, however – and something you haven’t touched on – is just wait until you get to the actual license agreement. There again, you’ll see lots of various versions, many quite complicated.

“That being said, the IP industry is quite large and has some very experienced and sophisticated players. And it’s changing very rapidly. Certainly both Cadence and Synopsys are frothing at the mouth in their rush to build their IP offerings. I can tell you, however, for the years it was the case that Cadence and Synopsys wanted nothing to do with ‘IP stuff,’ because they felt that would make them more responsible for the end result of a design. Yet, now we sit here today with Cadence and Synopsys somewhere in the top five IP providers worldwide.”

“So what is Sonics’ story?” I asked.

Pierce answered, “The concept for Sonics when we started 17 years ago – I am one of the founders – was based on noting at the time that the whole system that underlies a given electronic device was increasingly becoming one chip, and the complexity of the integration of all of those functions onto one chip was something that was a system-level problem.

“We set out to offer a system-level solution. We wanted to be that IP provider who could address how to enable a customer to come in and, in a very rapid time, take any IP from any source and integrate it into any chip at any time.

“We’ve been successful, because we’ve been able to apply our technology in the form of an on-chip network to address this integration problem by being that universal entity in the middle of all of the protocols – the behaviors and voltages that appear on the chip – helping handle the tough integration problems, so our customer could and can solve design issues as a whole-system approach.

“Our business has been to license IP, and to deliver our products to customers along with a software environment they can use to configure our IP [within their design]. This is very different from selling, for example, a processor and then reusing that exact form many times. Our customers take our software and configure our network for a specific chip [comprised] of a collection of different cores. We do that work with a license fee and a royalty.”

I noted, “Where you say on-chip network, but I might say interface. Is that correct?”

Pierce responded, “An interface is essentially a definition at the border that you cross between one IP block and another, an interface with a defined protocol. We often talk with our customers about how the exchange of whatever it might be, happens there – how does one block on the chip communicate out its content, or whatever its message is, to a nearby block.

“An on-chip network, on the other hand, is what takes the payload of information that’s being communicated through an interface, packs it up, and moves it to the intended receiver. To boil down the definitions – an interface is about how I present information I wish to communicate; a protocol is how do I move that information.”

“Ray, do you agree?” Pierce asked.

Ray Brinks answered, “Yes, that is correct.”

“Protocols or interfaces, the industry standards change so quickly. How do you keep track of it all?” I asked.

Pierce chuckled and said, “Welcome to our world. It’s our life here at Sonics to try to support those interface standards that are most prevalent in the world we deal with.”

Brinks added, “Yes, there are interfaces like PCI or 802.11 [which are well understood], and then there are the internal core interfaces that are assembled into a chip. Those might be very confusing, so you have to be careful.”

Pierce continued, “The world you’re asking about – all of those standards and such – is a subset of the world exactly like Ray describes. It’s all about difficult interactions: How does one IP block communicate with some underlying strata of the silicon?

“Even today, there can still be a great deal of variation between interfaces, even though there are just a couple interfaces that show up most of the time. At Sonics, we build standard support for those interfaces, with more than just one protocol. For instance, we support whatever it takes to communicate with an ARM core, the AMBA buses defined by the ARM processor.”

[Another Sonics co-founder, CTO Drew Wingard, has been very active in the OCP-IP trade organization.]

Grant Pierce noted, “The work of OCP-IP, the Open Core Protocol International Partnership Association, has been about general purpose third party IP interfaces. Despite that work, however, it’s still a wild world of proprietary interfaces that we find inside our customers’ [organizations], when they have internally developed IP.

“One of our largest customers, for instance, doesn’t publish how their processor talks to the memory cache, or doesn’t say what the processor does when it interfaces off to a graphics processor. They don’t publish that information, so when we support that customer, we have to work within the limits they set for us.”

Pierce noted that Sonics has a long track record of working collaboratively with customers and other IP providers: “Along with our work over the years working with TI and Nokia, we are also close partners with ARM.

“We are a reviewing partner for the AMBA standard. When ARM changes that standard, or creates a new standard with a new processor, Sonics receives the pre-release specifications and gets a chance to comment and contribute to it.

“Beyond that, we’re partners with a number of different companies, one of which is Tensilica [purchased last year by Cadence]. Tensilica has an interface called PIF, which we have also elected to support.”

Pierce concluded, “Supporting various interface standards is hard work and involves committing human resources [to the effort], but we are protocol people. We are the experts in handling all of these different protocols!”

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Tags: AMBA, ARM, Cadence, Drew Wingard, Grant Pierce, IP, Nokia, OCP-IP, PIF, Raymond Brinks, Sonics, Synopsys, Tensilica, TI

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