Under One Roof

By Ed Sperling
Microsoft’s decision to buy Nokia’s phone business, Apple’s move to build its own chips to more effectively run its software, and Google’s effort to develop its own hardware for next-generation platforms such as Google Glass mark an interesting reversal in the electronics industry.

Disaggregation was the answer to slow-moving giants such as big-iron companies. Starting in the 1980s, Intel, Microsoft and an army of applications developers dismantled the market that was owned by companies such as IBM, Unisys, Hewlett-Packard, Digital Equipment Corp. and a number of other large systems companies, creating ecosystems instead of captive developers. But as systems become more complex, with performance and power now dependent on tighter integration of software, hardware and IP—the parts that make up a system, including a system on chip, are coming back together in unique ways. Even Intel, which has a reputation for creating hardware on its own, is combining more third-party IP into its fab production.

So what does this mean for the tools and IP business? Is there a potential for more business and new customers, or simply the same customers with the same tools?

“One of the big differences you see is between the Apple and Android world,” said Serge Leef, vice president of new ventures and general manager of Mentor Graphics’ system-level engineering division. “Apple uses dark silicon with the authority to shut down portions of the applications processor based on heuristics. It turns off the things you don’t need or don’t use and it learns what you do use. In the Android world, which is disaggregated, there is no such thing. You pick performance based on standalone marketing. Power depends on which process you want to control. EDA supports the integrated view of system design. You can’t think about one IP block. The hardware is not in isolation of the software.”

At least that has been EDA’s vision, and it has been at the forefront of many of the chips created by companies such as Texas Instruments, STMicroelectronics and Infineon, as well as in IP from companies such as ARM. Unfortunately, the hooks for reducing power and turning off parts of an SoC that are not in use have not been widely supported by software available in the non-IDM market.

“We’ve always pushed hardware-software integration as imperative,” said Leef. “We’ve had Seamless co-verification since 1995, and while it was moderately successful it never became essential. We always thought it was ahead of its time. Market forces have always deferred and deferred as long as there was a way to linearly extend their way of doing things. But the trend may finally be here with hardware and software being brought under one roof.”

New partnerships
The whole EDA industry is watching this shift, trying to figure out what it means to them.

“The behavior we see from systems companies is greater connection between the hardware development to how they’re going to differentiate the end product,” said Kathryn Kranen, president and CEO of Jasper Design Automation. “That makes them much more bullish about EDA technologies. There’s also more willingness to invest in hardware because they’re not just building for a socket, and anything they can do to reduce risk and accelerate time to market is attractive to them.”

For systems companies, that means a much tighter relationship with EDA than in the past. It also pulls EDA companies deeper into strategic product development of systems, opening up ideas for new tools development.

“There’s a much greater willingness by some of the biggest companies to share with us,” said Kranen. “There’s more partnering happening again and a sense of pragmatism to get the job done.”

That relationship is being echoed across the EDA industry. But it also carries a price tag. Developing tools or modifying them for one big company can be lucrative, but it also can be costly if they’re not used in volume or they are abandoned as not useful enough. The investment in tools is enormous, and getting it wrong can be devastating to an EDA company.

Still, change driven by large systems companies is being viewed optimistically, at least for now. “Big rich systems companies refueling former leaders in chip design is good for all,” said Thomas Bollaert, vice president of applications engineering at Calypto. “Take the latest example of Microsoft announcing its acquisition of Nokia, a move clearly aimed to challenge Apple and Google. It’s actually part of a larger trend where mega-sized systems and software companies are acquiring and developing semiconductor IP and the capability to push the latest advancements in mobile computing.There will be a new wave of mobile devices enabling high definition videos, bringing more viewers and content providers together. Google has the most vested interest of any high-tech company to enable more people viewing videos. Why? Because it means advertisement revenue for Google.”

Bollaert said battle lines are forming across the design chain, and that preparedness is good for EDA.

Swinging pendulum
It was the U.S. government that originally prompted the disaggregation of the electronics industry. In 1956 it won an antitrust suit against IBM and forced it to sign a consent decree that wasn’t completely removed until the early part of the millennium. At issue was IBM’s practice of bundling hardware, software and services together in what it called a “market basket” offering for customers that was unbeatable. When other companies challenged IBM on any one of those three offerings, it underpriced them and made up the difference with the other two.

The U.S. Department of Justice held the consent decree over IBM’s head at the start of the PC era, prompting IBM to work with partners such as Microsoft for the first personal computer. The availability of software and hardware, though, led to what Intel president Renee James characterized this week as “the democratization of computing.” That process was accompanied by thousands of software and hardware startups that rushed to fill in the missing pieces ranging from software applications to processors and networking infrastructure.

While there has been continued consolidation in some markets, notably EDA and in many of the systems markets, the aggregation of hardware and software is a relatively new twist. Oracle’s acquisition of Sun in 2010, which follows on Cisco’s ongoing string of acquisitions and EMC’s acquisition of VMware back in 2004 are part of the same trend of solving very complex integration issues with a more vertically integrated company.

After years of promises about hardware-software co-development, system-level issues such as power modeling and debugging and better integration of customized platforms, EDA’s role in all of this appears to be gaining new traction—in part because the problems that need to be addressed are more difficult and time consuming to solve.

“The headline for us is that it ain’t just semiconductor customers anymore,” said Mike Gianfagna, vice president of corporate marketing at Atrenta. “This is an increase in market size. Otherwise, the acquisitions they’ve been making are not accretive, they’re dilutive, and that doesn’t make sense. Microsoft bought Nokia to do new things. That has to create more opportunities.”