February 16, 2004
Getting More than You Pay For - Part I
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.
Peggy Aycinena - Contributing Editor

by Peggy Aycinena - 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!

Letter No. 2

I'm sure you've received a thousand messages letting you know that the published URL for the “real” history of the transistor should have been http://www.bellsystemmemorial.com/belllabs_transistor1.html. I think only those who cared enough to find the right link deserved to read the article [EDA Weekly, February 2nd]. Thanks for an interesting read. I hope someday to understand half of it.

Letter No. 3

You might be interested to know The ASIC Group had a great year last year. In response to some discussions with some customers over the past year, we came out with a little tips booklet. We had expected that almost everyone designing chips these days who is still in business would be using most, if not all, industry best practices. To our surprise, we found there are many people out there using “industry worst practices” and this inspired us to do the tips booklet.

James Lee
The ASIC Group

Letter No. 4

In reference to "But first, a Letter to the Editor" [EDA Weekly, February 9th]:

I found the "anon" customer comments interesting. I would welcome a discussion with anyone regarding Mentor Graphics Customer Support. I feel we are significantly better than the other EDA companies, and have statistics and comments from customers to back this us.

Mentor Graphics is SCP certified and has won the STAR award 5 times. We also recently won the ASP 10 Best Support Web Site award. The interesting thing about SCP, and the awards, is that you have to use customer reported opinions and system statistics to prove you are doing a good job.

Feel free to contact me any time if you would like to learn more.

Tom Floodeen
Vice President of World Wide Customer Support
Mentor Graphics Corp.

Letter No. 5

I, too, have to make a living in this business and therefore want my comments to be anonymous.

I admit that I have a parochial viewpoint. I've been in EDA sales for about 18 years and I'm concerned about the gap between the customer engineer trying to get a job done and the innovative EDA technologist. I think the customer has to own up to a large part of this.

I found your brief talk with Mr. Tobias very interesting. [EDA Weekly, Feb 9th]

In my opinion, he's getting what he pays for. The big FAM deals that Toshiba, Texas Instruments, Intel, etc. enjoy with Synopsys, Cadence, Mentor Graphics, Magma, etc. are driven strictly by the price tag (3-year TBL rates). There are no provisions in their (the customer's) FAM business model for technology innovation or support. The customer has “de-valued” that.

Furthermore, we now see several of these big customers trying to “limit the number of vendors” they do business with, claiming they can save cost by doing so.

I think they must think, “well, if this small company has a good product, one of our big vendors will eventually buy them and they'll become part of our FAM”.


One “Supply Management” person complained to me in negotiations with me on my product that he bought Simplex before the Cadence acquisition. He told me he had assumed that the Simplex products would automatically be included in his Cadence agreement. He was upset when he learned that Cadence did not want to lower their Simplex prices, and they were not compelled to do so contractually.

Technology innovation is not coming from the “Big 3,” as I like to refer to them. If you look at the history of EDA, the most innovative and revolutionary products have more often than not come from the small start-ups. There are several examples to support this:

- Verilog was not developed by CDS, but acquired from the Gateway Design Automation acquisition.

- HSPICE was not developed by Synopsys, but by Meta-Software.

- Compiled-Verilog was not developed by Cadence or Synopsys even after the Gateway Acquisition.

- Dracula was the only game in town and CDS 'milked' it until ISS came on the scene. CDS has never caught up.

- The list goes on and on.

In a previous job, I showed (proved it through evaluation) a prospective customer an ROI model where if they can save just one design iteration, the tools would pay for themselves. But, even though we proved this on a real project, we could never consummate business with them because they had on hand an abundance of inferior similar tools from a “Big 3” at a 14% TBL rate. The ROI model became superfluous to them and the decision was made to use the cheaper, technologically inferior tool.

Later, their failed first-silicon cost them over a million dollars because of the inferior tool. This is not an isolated example; the larger customers are not investing in superior technology or good support.

Just a quick side note on evaluations - imagine going to your local BMW dealer and saying “I'm interested in buying your top of the line model, but, I need to test drive it for three months, maybe longer, before I can make my decision. And, by the way, please don't have any salespeople call me, but, I will expect superior support during my test drive.”

The customers in this industry have an unparalleled opportunity to exhaustively evaluate tools for extended periods of time before they make a buy decision. They have an opportunity to greatly reduce their risk. So, if they are unhappy with what they get, who's at fault?

Another thing I find interesting about Mr. Tobias' comments (or lack of) is that customers are not willing to make the proper investment in their people to make themselves successful.

Training is a good example - no one wants to pay for it although it can make a huge difference in the ramping up of the productivity curve and learning how to get the best results from the tools. This often results in mis-use of the tool, poor results, and failed products. Coding guidelines are not enforced and so the “un-trained” engineer gets himself into trouble when his design doesn't work. So, the first thing they do is point a finger at the tools company.

From an economic perspective then, what are Mr. Tobias' options:

Debug your design in silicon

Develop your own tools

Continue to buy based on price then complain publicly about poor support

Hold yourself and the vendor accountable, take the initiative to build a “Win-Win” relationship with your vendors.

Take the low-risk decisions you had ample time to make through evaluations and protect your investment (e.g. train/qualify your people, employ good methodologies, enforce engineering disciplines, and offer a willingness to recognize that vendor support is of value.)

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-- Peggy Aycinena, EDACafe.com Contributing Editor.

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