Executive Insight: Prakash Narain

Real Intent’s president and CEO talks about risky decisions, M&A activity in EDA, where the future opportunities are, and what changes are needed to reshape the industry.

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SE: What’s your biggest concern?

Narain: We are a smaller company, and ultimately we compete on the basis of the quality of the solutions we provide to customers. What’s the value proposition? How many X better will our solution be compared to the existing solutions that are in deployed in the market? You make a projection about it in your mind, and you make investments, and until they’re validated there is some degree of uncertainty about it. That’s the biggest concern. However, a close second is the ability to execute on this, so you can do it efficiently, with the proper information flow checkpoints, proper decisionmaking, navigation. It’s the ability to execute effectively to successfully deliver a high-value proposition solution.

SE: So how do you know when you have the balance right?

Narain: You cannot do this in a vacuum. It takes a lot of things to come together for a new solution to be crafted and delivered. You need to perceive and identify needs or trends. Some of them are much better defined, and some are very nebulous. So if you look at static solutions, they’ve found a very strong place in design flows. Today customers have organizations around static solutions. Ten years back it was like conceptual exploration. In talking to different people, you get different trends and perspectives. But what if there is no technology to be able to deliver these solutions and build these solutions? Customers are asking for solutions, but what if you cannot think of a synthesis of technologies to solve the problem? It takes many things to come together for the solution to finally happen. At every point in time, there are things that are better defined and those that are more nebulous. Some of it is based upon evidence, some is based on gut feel. You make a call and you keep cross-checking your assumptions as your efforts evolve to see if you’re on track or have to make some adjustments.

SE: Did anything surprise you in your own history?

Narain: Yes, and you always have to make adjustments. You’re never 100% on the money from day one. And you have to organize and be prepared to make adjustments. You just hope you make those adjustments at the right time, and who really knows what’s the right time? In terms of surprises, if you look at formal verification, when I started this company it was supposed to be something more immediate. It took a whole lot of time to emerge.

SE: It’s the same with emulation and high-level synthesis. If you’re building a business, you don’t have the same luxury to sit back and wait like a big company, right?

Narain: You asked what worries me. It’s that. The cost can be very high. We take greater risks as a midsize company. We don’t have the luxury of waiting for some market to emerge. So we have to take more pioneering approaches, and those approaches are inherently risky. Over a period of time, the ability to spot and make corrections has improved. We can make adjustments on the fly and navigate better. A midsize company needs to be able to make the course correction and navigate effectively. That is very important for success.

SE: Could you start another Real Intent today given the current conditions?

Narain: I don’t think so.

SE: What’s changed?

Narain: The investment available for EDA is less. The buying practices of customer companies have changed very significantly. There is a great reliance on large deals as opposed to trying to put together the best-in-class flows. For various reasons, the challenges for a startup EDA company are a whole lot larger than when Real Intent was started.

SE: Is part of that just the complexity of the design, or is it the market itself?

Narain: It’s everything. When we started Real Intent I had just finished a microprocessor design project at Sun Microsystems and the design size would have been about 250,000 gates. At that time you could get away with a more raw form of products. At this point in time, given the volume of information and complexity, the productization requirements have gone up tremendously. It’s not just about technology. It’s also about the whole application and product concept. Just building the infrastructure for a billion-gate design is a non-trivial task. And that’s needed even before the technology comes into play. Bringing a product to market today is a lot harder than it used to be.

SE: What’s the next big opportunity? Is it 2.5D, finFETs all the way down to 7nm?

Narain: We play in the front end, and we see increased complexity, increasing sizes, and new applications. Functionality changes based upon the changing applications. But the physical parameters at a high level stay the same. We will be continuously facing increased complexity, and the design companies are going to be facing unpredictable schedules, so their methodologies will change and evolve. We have to match the solutions to their methodologies. And new applications will bring new verification challenges. At the back end, you’d get a different answer.

SE: As you look out at the Internet of Things, is that a real opportunity for EDA?

Narain: The Internet of Things is probably a lot more interesting for our customers. The more design starts, the different characteristics, the better it is for us. We will be prepared to meet their needs by crafting solutions that will make them more effective. So the Internet of Things doesn’t directly affect us. But it will affect us indirectly through a larger customer base, and newer forms of devices that will need our solutions—be it new startups, new companies, new groups in existing companies. But it will basically be more design starts.

SE: When those companies buy tools do they buy a complete flow from a Synopsys or Cadence, or will they look for best-in-class tools?

Narain: It’s always a mix and match of some sort. In certain aspects of the flow, for example, a flow from Cadence or Mentor may be better than Synopsys. We intend to provide best-in-class for the domains in which we are involved. We believe those domains will be of interest to companies out there. For the larger companies, design is such a complex process that so many different tools are needed. We expect to be able to win business based on best-in-class tools.

SE: New companies are making chips these days. What are they asking for that’s different?

Narain: I can’t name any names, of course, but we are seeing new companies that are doing some cutting-edge work. Their requirements are around what will make successful silicon, and they may be quite unique. There are companies out there that are very sensitive to having the best flows, and there are companies that are less sensitive to that. They may only want to make incremental additions to flows. It depends on what principles you synthesize into how you’re going to compete out there. Companies looking to build best-in-class have a very different approach to the generalist companies.

SE: On a geographical basis, where are you seeing the most interest in your tools?

Narain: We see a lot of innovation in North America. Companies are global, so they have presence everywhere, but many of them are headquartered in the United States. That’s why there is a lot of activity in the United States. But as far as support, we see that as very geographically distributed. We see a lot of activity in South Korea, for example. There is activity in Taiwan and China. Europe is a little slower, but clearly there is interesting activity there. Israel has a lot of activity, as well. In some cases interesting things are happening in very large companies, and in some cases it’s happening in smaller companies, but it’s really happening everywhere.

SE: There has been so much M&A activity in this industry that the pool of startups is almost gone. Do you see more money coming into startups in this industry or is that done?

Narain: We are in a spiral of consolidation right now in EDA and semiconductors. Until something dramatically changes, I don’t see any shift. If the semiconductor industry suddenly starts hurting for innovation and speedy delivery of solutions, perhaps there will be changes. But until that happens, the spiral will continue. We will see more consolidation, less startup activity, less funding for EDA, and that has implications. Smaller EDA companies take chances. Some are more successful than others and they compete hard and try harder. If you take that away, it’s going to have an impact on the quality of flows. Will there be corrective action? I don’t see that happening now.

SE: Is it also getting so complex to design chips that selling the value proposition of new tools to VCs is too difficult to understand?

Narain: Getting to proof of concept has become much harder. Previously EDA companies would get funded on the strength of technology. The productization requirements are bigger than the technology requirements. It will become riskier and harder for investors who are not EDA-savvy to evaluate opportunities. That directly contributes to the lack of availability of funds.

SE: Do you see any new opportunities for Real Intent?

Narain: I see static signoff as a very big opportunity. We have not yet reached any kind of a plateau here. The cost of silicon failure is very high and very worrisome for a lot of people. It creates 10X or better solutions for a specific problem compared to dynamic approaches, and that’s a very interesting number. We’re only standing at the beginning of it, and that’s where the biggest opportunity is for us.