( ESNUG 423 Item 7 ) -------------------------------------------- [02/26/04]
Subject: EDA Business Models, Licensing, FlexLM, and Pricing Questions
Macrovision (mfg of Flex_LM) collects truckloads of money from EDA vendors.
How do we get them to provide more value to end users trying to manage
their tool inventory?
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What different kind of licencing/use models for EDA software do they see
in the future? How are they responding to the computing on-demand trend
that is picking up steam in other industries?
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If companies like Magma, or even Cadence w/ Get2Chip now, want users to
try their tools, how hard is it to make a binary executable that doesn't
allow any output of pertinent design data, like .db, .v, .vhd, GDSII, or
whatever so that designers could take their tool and some available docs
and do benchmarks against their designs no questions asked??? With the
appropriate NDA to "Not release or backward engineer the executable"???
Would seem that in this day and age, with the way cost consciousness is
going that sometimes we designers want to "see what else is out there" but
have to get approval from Corporate CIO/CFO....
If we could PLAY with the tools to make a valid case, as a lowly design
engineer, maybe we could get someone to buy them.
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Would you be willing to adopt an open-source model for your products?
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Would love to hear their responses about cleaning up their licensing.
Generally speaking, the licensing of their products is a mess.
Considering the capability of the design software they sell, you would
think that there would be a better, more efficient and streamlined
process for ordering, delivery, maintaining the inventory of their
software tools, and keeping their licenses up and running. What are
they doing about improving this portion of their business? This
question is open to all of the panelists.
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3) Pricing and licensing. The trend towards more restrictive
terms on software licensing is an issue. Moving towards
leased or annual licensing in lieu of perpetual licensing
guarantees revenue for EDA suppliers and eliminates our ability to
negotiate. So where is the 'pony' for us in this pile?
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Hey John - leave me anon for this - but here's food for thought. I
just finished a COT design at a small company. Only because i set it up
during the depths of the recession was I able to rent the tools I needed
just for the short time periods for which I needed them, making the
whole thing affordable. Today, I would be asked to take expen$ive
long-term (at least 1 year) licenses from almost all the vendors, making
it un-economical. I believe that the reason the vendors (well, at least
Synopsys and Magma) cling to multi-year pricing rather than recognizing
the peak/valley nature of design and making it easy to do short-term
rentals (of one or many licenses) is that they would lose more money by
letting their big customers go to monthly as-needed pricing than they
would gain by making tools more available to small companies like ours.
However, the 'unintended consequences" are that all design is moving
back towards design centers (being also pushed by the larger breadth of
tools and technical expertise required for 130 and 90nm designs), which
will severely limit their number oc customers to those with large
critical mass. Is this really the future they want? Or might they want
to reconsider 'metered' pricing models in the hope that customers who
feel they are spending their dollars more efficiently will spend more
dollars. For example, for this design I had to buy one PrimeTime
license for a year, where what I really needed was 6 licenses for two
months....
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After a few years and a few acquisitions, EDA software and systems
tend to become a bungled bundle of Band-Aids.
- How long should EDA software be allowed to live?
- How should EDA software be killed and dissected to make
way for the next generation?
+ What should be kept, and what should be thrown away?
- How can the transition to the (real) next generation of
software be made as painless and transparent as possible for
your Customers?
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EDA vendors are rewarded for tool sales (revenue, margin, EPS, etc.). Tool
sales are only vaguely linked to the customer's success (working silicon
in volume production). One might argue that more tool sales could be a
cover-up for poor tool performance. Will this model remain, or is anybody
on the panel willing to step up and link tool revenue to working silicon?
ASIC vendors take that risk/reward profile every day. EDA vendors (and
design service vendors for that matter) do not. The result is an industry
with limited upside.
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EDA executives on the classic hardware/software divide - selling to hardware
people while managing software people. Do you have one suggestion for your
customers that would help them get what they want from your software
organization? Besides "more money".
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The question I like to ask is: is there on earth an affordable EDA tool
for IC design?
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When is the EDA industry going to get out of its boom and bust cycle?
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Why is it that the major EDA companies are pricing their products at a level
that is outside the reach of the average engineer in a small company and
appear to be steadily increasing those prices at rates well beyond
inflation? Isn't this a short sighted policy in the longer term?
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What work are you doing to make your software available and affordable for
small-to-medium enterprises (SME's) and start-up's worldwide? Have any
governments, through their various mechanisms for fostering start-ups and
SME's, requested this? What agreements etc. are in the public domain?
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Of course, customers would prefer paying at tapeout. But that would
bankrupt most EDA companies and cause EDA R&D to grind to a halt.
Those EDA vendors who do follow the tapeout model appear to offer it
to break into an account, or, at least, get consideration that they
wouldn't without offering the pay-at-tapeout arrangement. (And look
at how well those vendors are doing!)
What's the way out of this quagmire? Term based licenses still
doesn't seem to satisfy customers, especially when Cadence and
Synopsys can sell a full suite of tools at huge discounts.
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I have a question that we currently facing.
The way that current EDA business model is conducted such that these major
vendors are killing innovative startup. All you can eat with extreme
discount (90% or more) model pushes the small companies with unique
products' revenue way lower than it suppose to be. I think eventually
this model will hurt the whole EDA industry. Are they going to continously
doing business like this or they don't care ?
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