Mousetraps, alligators and EDA

I didn’t go to the 2011 Design Automation Conference in San Diego because this year I decided to stay home and see what I could pick up virtually from video, audio and news coverage day to day.  It was much more cost effective and focused, despite the usual bandwidth problems with the convention center. My apologies for mixing metaphors but this is how I wrap up the issues arising out of DAC. 

It is said that if you build a better mousetrap the world will beat a path to your door, but when your customers are up to their asses in alligators, vermin are not their critical problem. 

Gary Smith gave his usual glowing report of the future for the industry (he thinks it’s well on the way to being a $6.6 Billion industry by 2015, and once again he claims that this year Electronic system level design (ESL) is going to be really big this year (just like it has every year for the past decade, according to Gary.)  But this year he added a big caveat.

He said that the industry needs to provide tools to the design community that they need to do their jobs.

Um, isn’t that why companies in EDA are in business? Smith’s caveat has the implication that they aren’t.  I agree with him.  Apparently so do the VCs who are pointedly NOT investing in EDA or semiconductor companies because neither can turn profits.

The problem with EDA is a simple one: failure to communicate.  

The industry largely concentrates on making tools that only sort of solve the problems their customers have, which forces the customers to hire more manpower to make those tools actually help them do their jobs, or design and maintain their own tools (Smith has said before that the primary competition for EDA tools is actually the tools their customers are making.)  The tools the customers make actually resolve the specific issues, but it keeps them from concentrating on the job at hand, i.e, making new complex ICs.

So why aren’t the companies making the right tools?  Because they have no idea what the customer really wants.

Most EDA companies start out to solve one problem for one design inside one IC company; either be a design team that spins out of another company or design consultants that discover a nifty resolution to the specific problem.  In the old days (pre 1990) that was enough to get a buttload of money from a VC and launch a new company, but this is not the old days and those one-off solutions are not the money makers they used to be.  The EDA industry, however, is still acting like it is.

Infant industries are always engineering driven. When they reach adolescence they morph to sales-driven philosophy.  Mature industries are market driven. EDA is stuck, however, between infancy and adolescence and can’t seem to break out of it.  People like Smith and investors like Jim Hogan have been telling them what to do do break out of it for years, and they all nod their heads annually to the advice, and when DAC comes to a close they go back to the cubicles and start the process all over again.

The industry needs to mature and do it really fast or there is going to come a reckoning. It will be consumed by more savvy industries that are already making inroads, judging from what I could see, hear and read from the various media portals I was monitoring.  They need to learn how to really speak with, rather than at their customers and stop using the tired old sales tools (trade shows and press releases) that have passed for marketing efforts over the past 20 years. 

If the engineers running these companies can’t figure out what I’m talking about, they need to step aside and bring real marketers into management.  If they don’t, then the investors need to start making some changes in management themselves.

It's not just the Semi industry that's clueless

I got an invitation to attend a webinar on best practices for Facebook pages from an organization I have often communicated with and considered a good information source.  So I signed up.

That's 30 minutes of my life I'll never get back.

Yes, you should provide interesting content on your page.  Yes, you should encourage engagement on your page.  Yes, you should post consistently and often.  Yes, you can do demographic research through the ad services for free.  And all the people on the seminar echoed everything being said on the seminar on the Twitter pages.  It made me want to scream.

The social media industry is becoming as clueless as those industries that claim social media is stupid.  They are patting themselves on the back and cross-selling to their buddies while there is a huge underserved market out there who desperately want to know how to make it relevant to their audiences. 

 It's no longer important to show people how neat it is to be the "mayor" of your local barista shop.  We all know it's neat.  But people want to know why they should care. Friends, social media has leaped the chasm and is now cresting into the long tail.  More than half the United States is engaged in social media, even if they don't know they are.  It's being used to shape new governments in some of the most economically and sociologically backward places in the world. But like the electronics industry has separated itself from its real market (with the exception of Apple), social media is glad-handing themselves into irrelevance.

I dunno.  Maybe I should keep my mouth shut.  Being able to explain why social media is important is starting to turn into a pretty good gig.  

Who's in charge? Act 2

So yesterday I talked about the failure of the semiconductor industry, as a whole, to accurately anticipate much of the market need.  I identified the causes of that failure as an inadequate funding of the marketing effort as well as a pervasive preference to withhold accurate data from industry analysis that is relied upon to develop new products.  How deep does this go?  I’m going to use the Electronic Design Automation (EDA) Industry as an example.  They support the semi industry with the tools they need to design and analyze complex products.

At the Electronic Design Automation Consortium (EDAC) industry forecast meeting this month it was pointed out that while semiconductor revenues have increased by double digits in 2010 while EDA is still in single digits (although it had decreased the previous two years).   Aart DeGeus, CEO of Synopsys, repeated an observation he has had many times in the past that EDA is not “getting its fair share” of the value it creates for its customers.

 Well, there are three reasons for that.  It could be any and all of them.

1. EDA is basing it’s forecasts on information provided by the industry analysis it’s customers provides... which we’ve already seen to be flawed.  So EDA is building products to support semiconductor and systems development that is going the wrong way.  (That may be a stretch.)


2. EDA has not done sufficient research into market needs to understand the what their customers value and is not communicating how they provide that value.  (That’s getting pretty close.)


3. Because EDA spends so little on real marketing and relies on rumor and tradition primarily as market research, it is not building products their customers’ value.  (I think we may have a winner.)

Here’s why I think the latter is more accurate.

Like many of his colleagues and competitors, DeGeus likes to trumpet how much money they spend on research and development.  I remember some years where it is as much as 20 percent of revenue for Synopsys.  I also know most of the companies in EDA have been increasing sales staff budgets every year.  I also know that every company in the industry has been cutting its marketing budget by an average of 10 percent every year for the past 10 years.

Now if you look at marketing as a function of sales, and that it’s duty is to crank out press releases, advertising and brochures; and to run trade show operations, well then you probably should look at ways to economize.  But marketing --real marketing-- is the advocate for the customer.  A marketer is supposed to converse with the customer through media, conduct professional surveys, and set up two-way channels of information between the company and the customer to get an accurate picture of what the customer needs before he know he needs it.  It’s a research function first and foremost. And that’s pretty much the way marketing works in every industry... except semiconductors.  And it’s even worse in the EDA world.

If Aart decided to take one percent of his R&D budget and put it back into marketing to do that kind of work, he would quintuple his marketing effort and possibly find out what the next big thing is going to be, not for EDA, but for the electronics industry.  It would make Synopsys the thought leader for his customers’ customers.  He would be able to explain his value clearly in hard numbers.

In fact, forget Synopsys.  Any EDA company, including the smallest startup, could do the same thing if they put some effort into marketing.  That means hiring a real marketer, and not an engineer with an MBA who once took a course on communications.

Instead EDA has marcom admins running Surveymonkey polls that make the statistician in my cringe.  

I recently got the results of a survey that I had participated in a few months ago.  The survey started out with an explanation of what engineering discipline was being explored.  

Right there, if I was an engineer from a different discipline, I would take a pass on the survey, so the only people that would take it are in that discipline.  OK, I can accept that in an effort to winnow out the non-relevant.  the next question was, “How important do you think (this discipline) is?” 

Gee, I wonder what the answer was? Sure enough, the survey result showed that a great majority of the engineers polled thought it was very important.  Whodathot?

The rest of the survey was pretty much the same: leading questions and obvious answers.  

What really caught my eye in the summary was a statement in the summary that estimated the savings a customer can realize from using this company’s technology was $5 million annually.  There was nothing in the survey that asked questions about costs.  There was one about “time savings.”  So I sent the CEO a question about how they arrived at that number.  They extrapolated that number from an assumption of the number of engineers a customer has and what they might be paid.  

This is a practice I’ve seen in every... I mean every... EDA company when I ask how they justify their product.  It’s based on sheer guess work.  they have no idea how much the customer is paying.  They don’t know the size of the engineering teams of the customers.  They don’t know anything about the market, other than the one or two companies they have actually sold product to.

So to answer the question: How deep does this lack of real marketing go?  Right to the core, baby.

To be continued.

Semiconductors: Where is the innovation?

You may have noticed that I have not been talking about marketing and media in EDA and semiconductors for a few months and I've been struggling with how to talk about it for some time.  It's finally reach a head, though, so I might as well say it.

Innovation in the semiconductor sector is so rare now that it virtually does not exist.  That may be why no one in the semiconductor industry, outside of the giants, does any marketing.  But then, if you don't do marketing you won't know what needs to be innovated.  Vicious circle, that.

I've had a love/hate relationship with EDA and semis for a long time.  I've always thought they were incredibly important sectors and a source of great innovation.  I've worked with some of the most innovative and groundbreaking companies in both sectors and I always hoped to be a part of it.  But in the past few months I've come to understand what the VCs, entrepreneurs, government agencies and regional development agencies have been trying to tell me.  There is no longer any there there.

In the past year I have seen three significant innovative technologies absolutely crushed because their market -- semiconductor design and manufacturing -- was just not willing to change how they do things.  All they want to do is "reduce respins."  That's it.  Every VC I talk to has told me for the past three years that they know of no one in the industry that has a good idea anymore.  What's more, they tell me, all the truly innovative people in the EDA industry have left it for completely different niches.  

Last Wednesday I was attending a panel on worldwide innovation, sponsored by Silicon Valley Link and Eurocal Group.  On the panel were executives from SAP and they were discussing how their company encourages innovation within and without.  A lightbulb came on.  these guys said their company doesn't set a budget for innovation.  Their entire culture is based on innovation and as a result innovation happens.  By contrast, EDA and semiconductor guys brag about the percentage of their budget dedicated to R&D and, as a result, they just make incremental advances on 20-year-old technology.

So what I have seen in the past few months is where all the innovation is coming from.  And it is in software, not hardware.  Apple has been successful in creating software-enabling platforms and when they could not find a semiconductor company to listen to them and make what they needed, they went out and bought a couple of them.  Problem solved.  Don't need EDA at all anymore.

Cadence is making noise about innovation through software with their EDA360 program. I wish them luck, but the rank and file of the industry doesn't get it.  I know because I have talked to more than 60 EDA companies this year, desperately searching for some start-up that gets it and none of them do.  i have found maybe three semiconductor companies that get it, but they can't get funding... because the VCs know that the tools they need don't exist.  Even EDA Analyst Gary Smith says Cadence has a hard road in front of them because they lack the tools to make the vision happen, and no one is funding innovation in EDA so where will the tools com from?

So is this a bad thing?  Not really.  I've also been finding companies, that are getting funding, that are figuring out how to deliver functionality on off the shelf-hardware or letting their product reside on the cloud.  The semiconductor and EDA worlds are quickly just becoming a convenience store to technology; a place where you drop in when you need an overpriced bottle of milk at the last minute.

So I have found the innovation centers I have desperately wanted to support.  I will still look fondly back to my technology roots and will even take a meeting now and then, but the world has passed my old stomping grounds by.  Time to move with it.

What the "new" EE Times means to venture capitalists

I concluded a great week with a sit-down with Paul Miller, CEO of EE Times Group for United Business Media, regarding what the new format and philosophy for the venerable publication will mean for entrepreneurialism and investment in the electronics world. To me, everything looks to be moving up and to the right.  This interview was sponsored by Magma Design and Vpype.

Watch video live on Vpype Live Broadcaster

It's official: Products don't mean jack and you're not spending enough.

Paul Miller posted some stunning data this week in his blog.  I've reported for many years that companies in the semi industry (and yes, that include EDA) underspend in marketing, but I had no idea how low it had gotten.  

An Outsell report stated that most B2C companies are spending 4 percent of revenues on marketing while B2B companies spend 2.6 percent.  Semi's on the other hand spend less than one percent.  Since most surveys on the subject show that successful companies always spend between 5 and 10 percent, that explains our economy in a big way.  The report also said that companies are not doing enough to differentiate themselves (What? You mean calling yourself an industry leader isn't enough?)

Now, combine that with an EE Times survey Paul references that "technology leadership and great products" don't drive sales.  What does is service, support, cost and availability and that is something no one in the semi industry does well... if at all.

I talk to a lot of marketers and sales execs in semi and every one of them says the same thing: They know who the customer is and what they want, and what they want is cutting edge tech.  Most refuse to consider that they might not know their customer base well... if at all.  And all the companies are investing 20 to 30 percent of their revenues on R&D for products that their customers don't really want.

How do we fix this?  Maybe it's time to invest in a market conversation.

My turn for being pissy

A comment on an earlier post today stated that there were few journalists sitting in the technical sessions of ISSCC because the "lacked the technical depth" to be able to competently report on the subject matter.  Frankly, that kind of attitude really honks me off.  So just for the heck of it, I took 5 minutes looking up the bios of a handful of journalists that cover EDA and semiconductors.

Nic Mokhoff of EE Times has a BSEE and has been covering computer technology and research since 1985.

Paul Dempsey of EDA Tech Forum has twenty years as a technology and financial journalist and is the main US correspondent for for UK’s Institution of Engineering & Technology 

Ronald Wilson of EDN was a design engineer for Tektronix, Inc. developing bus interfaces and participating in processor- and graphics-engine architecture and design, as well as evaluation engineering and software-driver development. He's been covering technology for more than 20 years.

There is more technical depth in that group alone than in a lot of startups.  Maybe most startups.  If they are not sitting in a particular session at a trade show, it's because it either has no importance, or they cannot be in more than one place at a time.  I sure ain't because they lack "technical depth." That's all I have to say about that.   For now...

Rewrite = Edit = Improve

OK, so my last post kicked up a lot of dust over my comment about rewriting press releases.  See the above headline.

When I rewrite something for a client, I intend to make it better, clearer, less fluffy.  I learned to do that kind of writing/editing from 10 years as a daily journalist.  When a traditional journalist rewrites a press release, he screens out as much crap as he can before publishing it in a very abbreviated form.  Usually that includes erasing the quote from a CEO saying how "pleased" he is.  When a blogger rewrites a press release, he does the same editing as a traditional journalist, and then adds perspective, which is what traditional journalists used to be able to do.

Then there are traditional journalists and bloggers who don't even look at press releases before the write a story.  They do research and interviews to get a broad picture and write in-depth articles for major national publications.  We call those journalists, "unemployed."

Sorry if that offends anyone.

Where will innovation come from next?

The past two weeks have been a blur for me as we are coming to the tail end of a massive project for a client and looking for our next big thing. The project involved redesigning a very complex website, moving it to a new server and making the switchover look absolutely transparent to all the users.  We partnered with a very innovative web and software design company out of Costa Mesa, Apogeeinvent, who did an absolutely incredible job of innovating our way through the masses of data and content.

Innovation.  That's what I was looking for in taking on this project.  We couldn't ignore what had been accomplished, but the infrastructure that got the client there was showing signs of strain. And budgetary restraints made it difficult to maintain it.  So whole chunks of the supports had to be pulled out, redesigned and plugged in without having the whole thing collapse.  In the past 24 hours the changeover was accomplished and with some minor tweaks and turns of the screws it's looking pretty good.

And during the past 24 hours I've come to realize that this project was a metaphor for our times.  Everything we counted on in our society's infrastructure is strained or failing.  What we used to do to make a living may not be available tomorrow.  We are crying out for innovation, but at the same time we have the prevailing "wisdon" that there is no budget for innovation.

I had a couple of beers with a marketing exec in the semiconductor industry yesterday to maybe find a way to help him innovate within tight budgetary constraints.  Of course the discussion cam around to social media, which he believes can help, but he doesn't know how to sell it to the bean counters.  There always has the be a monetary ROI, you know.

Then my old buddy, Rich Wallace popped up this morning on the Next Silicon Valley blg/news site about innovation cropping up out of social media metrics.  The short of it was the explanation of what social media is for.  We keep saying it's for communication and community -- which it is -- but it is so much more: its for data mining, and that data will determine what the market needs, how that need will be met, and what people can afford to pay for it.

Most of the technology industry has been enamored with what the technology can do, leaving the customer the responsibility of figuring out what it is for.  When money was loose, that was a good plan: Let the customer figure out the innovation.  But the customers don't have time to figure that out.  they are too busy trying to meet the needs of their own customers who can't figure out the products.

The data derived from social media platforms and practices is the way companies will figure out what the customers will actually buy.  

The essence of good sales technique is to figure out the real need of the customer and sell him something that will meet that need.  But in the past 20 years, technologists have created products and forced them on customers. Take electronic design automation (EDA) for example.  I was talking to a design manager for a VERY big semiconductor company who told me that 10 years ago, 75 percent of their design work was done on commercial EDA tools.  Today he said it's around 35 percent.  Why? Because the tools the EDA industry keeps trying to sell him are variants of the same tools they've been selling him for the past 10 years, not anything that he actually needs now.  So the tools he uses most are the ones the company develops internally.

(Now I know I'm going to get a lot of screaming emails telling me I don't know what I am talking about.  I'm just telling you what a design manager from a major EDA customer -- $20M tool budget -- told me.  He doesn't run all the designs for the company, but he still has a significant budget)

How does this come about? It comes from sales and marketing teams whose data is based on personal experience from a decade ago; a belief that was was true in 1999 is true today.  And the reason they believe that is the mechanism that provided information to them about changes started disappearing 10 years ago.

It you want to succeed in the current economic paradigm, you are going to have to start figuring out what your customers need and what they can pay for.  There is a whole new generation of customer out there that you have never met.  And 85 percent of them are on social networks looking for answers.

Like Fox Mulder said, "The truth is out there." So go get it.  You can't afford not to.

Market research is not about you

I have relationships with a lot of industry analysts and, like journalists, their existence is hanging by a thread because very few people understand what they are for.

Take the redoubtable Gary Smith, a long time analyst for the EDA industry.  Gary worked most of his career for Gartner until that organization decided to stop covering the industry because... well... no one in the industry was supporting the effort, just like they weren't advertising.  Gary struck off on his own after the layoff and founded Gary Smith EDA and continued the good work.  He's making a decent living but people still don't understand what he is doing.

Long before the layoff, Gary started putting out a wall chart on the industry; what companies were in it and where they fit.  Over the years, as the industry grew, Gary started making more wall charts for different segments.  I think there are three now.  You need an magnifying glass and a comfortable seat to read them, but they are pretty comprehensive.

And most people in the industry complain about them.  "That company doesn't belong in that category!"  "That's not what we do!" "I thought he was an industry expert!"  All those complainers have no clue what the purpose of those charts are and what Gary does.

See, analysts don't report what the companies in a given industry tell them.  They listen to the customers of the industry.  They listen to current customers, past customer and potential customers, then they report what those people say.  Of course, Gary takes lots of meetings with vendors, listens politely, takes a few notes and nods sagely.  Then he goes back to his data from the customers and sees if it lines up with what they say.  Then he puts out his reports (available for a fee) and his free wall charts.  Personally, I think he way undercharges for the charts.

In today's world, getting a reality check about your messages and image in the market for free is INCREDIBLY valuable.  It doesn't matter if Gary or any other analyst can parrot back your corporate dreck, it matters what the market is hearing you say, hearing what others are saying, and that information getting back to you.  If what the analyst says what the market sees agrees with you, then you need to give your marketing team a pat on the back.  If it doesn't agree, you need to ask the team why.

I've had several clients get upset about analyst positioning and end up abandoning working with the analyst (like Gary), but on the rare occasion that I get them to cool down and reconsider their positioning statements, wonderful things happen.  New customers start calling them, sales people have their calls returned, and business looks good.

So I take my hat off the Gary and all his compatriots in the analyst field.  And it's time the rest of you went to him hat in hand and find out what your customers are really saying.

Getting through to Wall Street

Dan Nenni wrote this week that Wall Street Hates EDA.  He's not far wrong.  His post demonstrates the investment community's utter ignorance of what EDA actually does.  For example, Dan quotes a Deutches Bank AG report that says Synopsys "tests semiconductors."  

Now those in the engineering world know that was an ignorant statement.  Synopsys does a lot more than test.  But we have to consider that Wall Street is not an engineering audience.  They don't make things.  They make money off of companies that make things.  They are interested in what the financial upside is of any business, and EDA marketing does nothing to explain that.  Here's why.

Ask any EDA executive, from engineering to sales to the C office who they sell to and they will all say the same thing.  "We sell to engineers."  Every bit of communication created is designed to convince engineers to use their products.  And since EDA considers EDA the penultimate level of human evolution, they believe that everyone "beneath" that level should make an effort to understand what it is they are saying.  Whatever information is needed that does not relate to the engineer's needs is unnecessary.  

So whenever a financier, who is not an engineer, asks for a simplified version of an engineering term, the response is, "It's complicated.  You probably won't understand.  Give me some money."

And that sums up the relationship between EDA and Wall Street.

Almost every common term in engineering means one thing to an engineer and something else to everyone else.  I did a quick run through some EDA terms in a thesaurus and came up with some interesting results.

Engineer:verification

Common person : test

Engineer:  validation

CP:  test

Engineer : test

CP: test

And here's something that is stated over and over in EDA:  Verification and validation takes 70 percent of the time and budget of any design, and that percentage is growing.

So when you ask a common person what EDA does, based on what he has been told by the EDA industry, what will be the reply.

"They test semiconductors... I think."

Uncomfortable conversations is what we need

Reading a story in the SF Chron about the ongoing battle over Gay rights I saw a phrase from the late Harvey Milk that really caught my imagination.  

Uncomfortable conversations.

My dust-up over the fate of DATE last week is finally petering out, but what I ended up getting out of it is that we are still trying to avoid the truly uncomfortable conversation in the semiconductor industry.  We still want to pursue a philosophical discussion about how important our technologies are but we don't want to talk about what our fiscal responsibility is to expand that discussion beyond our little coffee klatch. 

10 years ago we didn't want to discuss the fact that our media was dying from lack of proper investment from the industry.  Now we don't want to discuss the fact that lack of investment will probably kill the last form of industry forum (trade shows and technical conferences) for the same reason.  We are still holding on to the false belief that the existence of our technologies is enough for them to succeed.

I've said it before and I'll keep saying it:  If you do not understand, invest in and execute effective communications efforts it doesn't matter how effective, exciting or important your technology is.  Until we start putting serious effort into that, we will continue in this recession.  The only survivors will be those who are making that kind of investment and effort.  This is true for start-ups, established private and public companies, industry forums and, maybe more importantly, the investment community.

This is the uncomfortable conversation that needs to begin and begin in earnest.

Oracle. Sun. Brilliant.

I woke this morning with my iPod Touch alerting me to Oracle buying Sun.  It took me a few minutes to get it through the sleep haze.  When things cleared the entire concept brought a big smile to my face.

I've know for many years that Oracle has been sniffing around the semiconductor world, trying to find a profitable way in.  They've looked at Sun avariciously through that entire time because it had the greatest profit potential, but it was either too expensive or had too many suitors.  The stock crash solved the expense issue and one by one the suitors went away with IBM finally bowing out.  I hadn't thought they would move this fast but they must have had everything ready to go for this moment.

There will be lots of people wonder what this will mean, but I have a pretty good idea.  The design and building of semiconductors is primarily a database issue, but one that is decades old technologically, incredibly fractured and extremely inefficient.  Who better to take it over than a company that has essentially defined the database industry.  The problem, however, is that IC design is also a highly specialized field and Oracle did not have that expertise at had, nor the management chops to deal with that kind of technology.  In buying Sun, they have purchased both.

Sun and the EDA world have long had a love/hate relationship.  The nature of IC design requires big server farms and Sun provided much of that hardware, both as a service and as product, but the EDA world kept trying to find ways to break their dependence on big Sun iron and many tools now work on souped up laptops.  That didn't sit well with Sun over the years.  And since Sun was, in itself, a semiconductor company as well, it made EDA pay for it's infidelity when buying EDA tools. Oracle adding its database knowledge to Sun's semiconductor experience makes is possible for Oracle to radically reinvent, and maybe even replace, the struggling EDA world.

EDA is hampered by many things but there are three issues I see as the greatest problems, they refuse to effectively market their technology because they believe that the engineers that use their products are immune to marketing (like it's some sort of black magic).  Second, they don't really try to sell their technology outside of their ever decreasing circle of customers.  Third, they are stuck in the technology paradigm that birthed them in the 1980s and refuse to consider standards and technology that could make their tools more efficient, therefore less expensive... ah, and less profitable ... even though it might help their customer base to grow.

Oracle has none of that problem.  They are a marketing behemoth and ruthless competitors in their markets.  They don't cut their prices to push competitors out of the market but make their products so feature rich and valuable to customers that it is almost a no brainer to buy them.  And if that doesn't work, they buy the competition.  But what is even more important is they keep reinventing themselves.  If they need to obsolete a technology to make the market grow, they do it.

All this makes the purchase of Sun by Oracle a very dangerous outcome for established EDA companies who expect to continue competing with this big dog and a very welcome move for all the little EDA companies trying to compete against the hidebound EDA leaders.  Oracle now has the resources to completely change how chips are designed and, at the same time, design the chips themselves.  They will market the hell out of their approach and bury the big four if not consume them.  And they will actively encourage innovation through startups, investing in them and acquiring the best of the lot.

A few months ago, Rajeev Madahavan at Magma predicted that there would only be two EDA firms left before five years are gone.   I disagreed with him to a certain extent, but I might now agree with him.  There will be Oracle... and the EDA Consortium made up of a whole bunch of startups.  I think we might also see the end of EDA conferences, like DAC and DesignCon.  All of that will be moved into OracleWorld.

That's my take.  An I'm sure a lot of you are going to say I'm completely nuts.  We'll find out in about five years.  In the meantime, Big EDA might want to start putting together their contingency plans for when the Oracle M&A ream comes knocking on their doors.

Covering the Logo

We recently put out a New Tech Press article that is starting to filter through our network, but something interesting has happened in the process.  Some people are complaining that something got left out.

Here's an analogy.  There was a TV show a while back where everyone used Mac computers.  That was because Apple had paid for that visibility.  Sales started to rise for Macs.  At one point, Apple decided not to pay.  Little round stickers showed up on the computers, covering the Apple logo.  Sales started to drop.  Apple recanted and paid the sponsorship and the stickers came off and sales went up.

That's kind of what New Tech Press is all about.  We want to put out good information.  That process of developing the information costs something and has to be paid for.  That's what the sponsors do.  In the case of this particular article, we had a lot of companies excited about doing this article.  They wanted on board.  We decided to break our model regarding commitments and do the whole thing on spec.  We did hours of interviews, spent hours writing and editing, called dozens of analysts and industry pundits to verify the information.  But only one company had actually committed to being a sponsor.

We produced a three part series on the subject and were about to deliver it to all the potential sponsors, but one by one, they started dropping out.  The primary sponsor didn't want to pay the full freight for the three-part series.  So we had to start editing.  We cut the entire piece by half and folded it all into a single story.  That took a lot of work and back and forth with the sponsor to get it coherent.  The end product was a good, not great article on a subject that no publication had yet covered.  A little choppy, admittedly, but a strong effort.  In fact, not a single product of the sponsor was mentioned in the article, although competing products were.  And that is to the credit of the sponsor.

So today I get an email from one of the lapsed sponsors wondering why certain things were not mentioned.  The answer: you don't support the process, your logo gets covered up.

New Tech Press is in the business of distributing important information to, and fostering discussion within the tech community. But there is no free lunch.

The engineer as marketer

Along with the furor over Cadence senior exec turnover, tiny little LogicVision also announced a shakeup.  They dropped their CFO, VP of marketing and VP of operations and replaced them with new beancounters and engineers.

LogicVision has been struggling in the market for almost a decade, primarily because their competition has made a greater investment in marketing than they have.  LogicVision actually has a superior product and one that is uniquely suited to large, complex semiconductor design.  The competition has been squeezing out as much value of old technology as possible, but gets their message out much more effectively than LogicVision ever has.

And every year, LogicVision decides to reduce their effort to communicate with the market, fight holding actions on their remaining market share, and ... replace marketing expertise with engineering.

Can't be done, folks.  The best technology ALWAYS loses to superior marketing,

That's gotta be embarrassing

Yesterday, San Jose Magazine came out with a glowing tribute the Cadence Design and it's leader Mike Fister.  Today, Cadence announced that Fister has resigned.  The WSJ coverage also pointed out that Cadence is lowering guidance prior to the October 22 financials.

Timing is everything.

The ball is in .... my court now

Sometimes you have to think about what you wish for.

Last week I tossed off a post about an industry group asking for and RFP and I said we would take a pass because we didn't think it could be done the way they expect it to be done for the budget they proposed

. 

Well, late last week I got a call from them.  I expected to be chewed out.  I didn't get chewed out.  They apologized for not being clear.  They don't want to do things the way they have always been done.  They want to try something new. And they really want us to come up with an idea.

Do I have ideas?  Oh yeah.  Have they ever been done before?  Oh no.

But the gauntlet has been thrown down.  It's time for me to put up or shut up.

Ya'll pray for me.

Mutschler leaves EDN and we start part three of 'Is journalism a profession?"

The big news to day is that Ann Mutschler is leaving EDN
after 7 total years (She came to work with me after two years, bounced around
the PR trade and then went back five years ago).  That's bad news for the electronics industry who is losing yet another experienced, credible third-party voice.  It's bad news for EDN, too.  Ann has been a prodigious writer for the Reed
publications.  She was brought in
by Ed Sperling and survived several rounds of layoffs (including Mike
Santarini, Sperling, and Maury Wright) before deciding that she could make it
on her own as a freelancer.  She
has several contracts lined up and I have her targeted for work with New Tech
Press.

I'm using this as a lead in the part three on the
"profession" of journalism because it proves my point in a timely manner. 
In the last entry, I made the claim that journalism really doesn't meet
the criteria for being called a profession; that it might be more properly
labeled as a trade.

What is going on in the world of journalism I think plays
that out and Ann is an example. 
Journalism is not rocket science. 
I think it is harder than that. 
You can't create a formula in mass communication that will create a
repeatable desired outcome.  Rocket
science and electronic design cannot deal with uncertainty, but a journalist
has to.  So what we do is nuanced,
crafted, edited, thought about and then launched without really knowing how it
will affect the audience.  You can
make a guess based on experience about how it will work, but you never really
know until you put it out there.

Being salaried doesn't really work for journalists.  Newsrooms around the world appreciate
the craftsmanship of an experience journalist and they want to hire them.  But very few can actually afford to pay
them what they are worth and there are novices willing to work for peanuts,
which drives down the salaries artificially.  Except for the very small Newspaper Guild, there is no
salary range that actually works for journalists.  You can't get a job without significant experience, but you
can't really get paid a living wage.

But tradesmen have a significantly different situation.  They contract with their employers and
unions and guilds set the prices and provide the benefits.  Yes, the work can be seasonal and there
are long dry periods, so the craftsman has to learn to budget
appropriately.  But there is a
significant flexibility that is lacking in salaried work, along with the
ability to set your own standards.

Ann is moving out into this frontier of journalism and while
it is a little scary, it has as much future certainty as working in a newsroom
for a paycheck.  She is working for
people that look at journalism as "black magic" because try as they
might, they can't string together two coherent sentences without a string a
buzz words that end up saying nothing.

There is still a place for newsrooms and publications, but
those places are increasingly becoming the training grounds for journalism; the
place for apprentices and new journeymen. 
The publications will still require the skills of a master craftsman,
but increasingly, the craftsman will become the gatekeeper of the skill. How
will this come about?  Well, we're
gonna get into that next.  In the
meantime, welcome to the rest of your life, Ann.  You're going to do just fine.

Some positive news for a change

Brian Fuller reported today that Richard Wallace was taking over the EiC seat at EE Times and Techonline, which would be good news if it weren't true.  The truth is even better.

Wallace, vice president of international operations and editorial director for Techinsights, will oversee the editorial content development for both EE Times and Techonline as well as lead the integration of both organizations.  This means that Junko Yoshida will have help in her overwhelming job of leading EE Times print and online, as well as the international beat.  And Patrick Mannion and Rich Nass at Techonline and Embedded Systems Design print and online will have similar support.

Talking with Rich on the phone this morning, he explained that the disparate arenas of Techinsights have never been fully integrated.  Each operated separately, although the team leaders al interacted with each other on a daily basis.  While EE Times is well known as a "print" publication, it actually is more powerful in it's online presence, but that presence is largely separate from Techonline and ESD online and in print.

I know from experience that getting people to understand where all three connect and separate is not easy.  As a media relations consultant, I understand it because I work with it daily.  But the companies that knew how it worked 10 years ago are confused.  Rich will be very helpful in demonstrating and further integrating the relationships.

Rich is an experienced and solid journalist who "gets" new media technology.  And he knows things have to change if we want to see a strong press return to technology.

I'm thrilled

Fabless Semi: the next domino

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.