I said almost a decade ago that the EDA industry was cutting its own throat by going to K-mart for it's marketing philosophy and cutting advertising budgets. The first indicator I was right was when VCs decided EDA was not a great investment (an indicator that has steadily grown over the first few years).

A few years ago I was predicting the same for the Fabless industry because they, too, have been downscaling marketing operations. Today I read in EE Times that the VC community is significantly downscaling it's interest in fabless companies. Guess what, folks? It's happening again.

The pattern goes like this: The market begins to slump so companies look for ways to cut expenses. Marketing goes just before the janitorial staff. Less time and effort is spent explaining the benefits the companies provide in their products and technologies. The publications that dedicate themselves to providing that explanation, faced with declining advertising spending, cut back their coverage of new companies. The VCs no longer get adequate explanation from the companies about what they are doing and have no third-party research. Investment dries up. Consolidation and market shrinkage becomes the standard.

And since the fabless industry is a key customer of EDA, guess what it means for EDA?

You might ask, who's next on my crystal ball? That would be the Embedded industry.