Secure collaboration is a quiet trend at #52DAC

By Lou CoveyEditorial Director

While outsourcing software and design development is a common practice, the idea of putting your company’s crown jewels into the cloud for a freelancer to monkey with tends to drive sales of anti-emetics. Can you safely allow virtual strangers to access your server, or should you just suck it up and overwork your employees?

That has been a continuous conundrum of the Electronic Design Automation Industry (EDA) and its customers in the embedded software and semiconductor industries. Larger companies, like Synopsys and Intel either use internal security paradigms in the collaborative tools or work with some of the big players, like IBM and OpenText. The costs of those tools however don’t always fit in the budget for smaller companies and can be a hindrance to outsourcing companies.

What makes the whole issue more difficult is that while companies readily admit is is an important issue, not many are actually willing to talk about what they are doing about it.

At the Design Automation Conference in San Francisco this week, there was a noticeable presence of companies stating they actually do provide for secure collaboration  and were more than willing to tell you who they provided it for. One of the main players, OpenText, customers proudly proclaims their list of customers, including, in the electronics world, Alcatel-Lucent, Cirrus Logic and Renesas (see interview here).

Other players, like the recently funded Zentera, not so much. We visited Zentera’s booth at the Design Automation Conference and they were quite adamant about not saying anything substantial on the record, but their website touts a lot of partners, including Microsoft and Qualcomm.

Then you get into the realm of the EDA tool providers and the walls go up quickly. Mentor Graphics expressed surprise that one of their major customers, Qualcomm, was working with Zentera to provide secure collaboration. Synopsys and Cadence claim their own “cloud” solution, consisting of private servers stuffed in their headquarters building.

Dassault Systeme, on the other hand, was quite effusive about their Enovia collaborative platforms and focuses security according to roles, geography and hierarchy. Dassault is relatively new to the world of semiconductor design and is making a strong effort to differentiate itself from the “holy trinity” of Synopsys, Mentor Graphics and Cadence, and they have been miles ahead of the EDA industry on the issue of collaboration and security, simply because of their much broader range of customers including the mil-aerospace niches that require a standardized approach.

For third-party providers of design services these secure collaboration platforms can open doors for working with the most cutting-edge technologies that are often strapped for resources. Customers that want to integrate design environments from multiple sources can use them to integrate the external design teams into an all encompassing environment without giving up those aforementioned crown jewels. If the customer doesn’t want the additional expense, it might be worth the investment by outsourcers to adopt the collaboration platforms and work the cost into their services overall.

Outsourcing has become a zero sum game with benefits for many

This is the latest in our ongoing series of articles on outsourcing, benefits and downfalls. By Lou Covey Editorial Director

Outsourcing product design and manufacturing has become an international way of life despite the concern that it takes jobs world_of_outsourcingaway from one country in favor of another. As the practice has matured, it has become more of a zero-sum game as long as the participant realize it is best as a cooperative exercise.

The decision to outsource any part of a product lifecycle is not longer a matter of which country a company will choose, but which countries to choose. High precision work is still the realm of the United States with Western Europe a close second. Mass production of mid-quality products is an acceptable choice, even though costs are starting to rise. And Central Europe is rising as the choice for high-quality, low-cost software design.

In the end, companies have a much greater choice in how and where they choose to put together their products and services and it tends to result in jobs all around the world.

We spent some time talking to George Slawek, the managing partner of the software outsourcing company Eurocal Group , which features management , customer relations and sales in the United States, combined with software developers in Poland. We found he sees business as not either/or. He says Poland offers options not available elsewhere, but are not the be-all and end-all or options. You can listen to the 10 minute discussion here.

(Full-disclosure: Footwasher Media provides consultation to Eurocal Group on content and marketing strategy)

Sony hacks may force companies to eliminate passwords

This article is the first of a year-long series of articles looking at outsourcing services and how they are no longer just a means of saving money.  We look today into the arena of cybersecurity and a startup using contract software design to create a new security paradigm.

By Lou Covey, Editorial Director

gty_computer_password_ll_131204_16x9_992The hack and subsequent terror threat of Sony Pictures laid bare the inherent weakness of cyber security in the world. Even the most powerful firewall technology is vulnerable to the person with the right user name and password (credentials).  In the case of Sony, the administration credentials were stolen through an unsophisticated phishing attack, allowing the hackers to bypass the Sony firewalls and storm the corporate castle.  This is the most common way hackers take down a system.

We have all heard stories of new technologies that overcome this basic flaw, from biometric technology to two-step verification, none of which seems is taking significant hold in the cyber world. According to Jack Wolosewicz, CTO and co-founder of Eurocal Group, corporations are reluctant to move beyond the familiar.  Articles in the Harvard Business Review and Fast Company lean toward agreeing with him.  Companies are dedicated to giving customers what they are willing to accept, not necessarily what they need, and they won’t force new paradigms on them.  But Wolosewicz says here is no such thing as a strong password.

“All passwords are weak because they are easily stolen and their complexity is irrelevant once a hacker has a copy of the password,” he explained. “This enables the hacker to masquerade as an administrator and, snap, the passwords, personal data and credit card numbers of millions of users are now in the criminal domain.”

However, Wolosewicz said, in the area of cybersecurity, that reluctance may give way to necessity. “We may be at the pain point where all of us are willing to look at something significantly different.”

Wolosewicz has a deep background in computer security and after working as CTO with the team at EuroCal Group, he realized he had the engineering resources to create a security system eliminating the password paradigm. And he could do it without the startup costs and headaches.  Certus was born.   Wolosewicz serves as the CTO of Certus, as well, managing the Eurocal engineering resources for both companies.

The Certus cryptographic protocol is based on a “one-time pad” cypher, proven unbreakable in 1945. The system creates a sonic digital handshake between a mobile phone and any device wishing to authenticate the user. If the phone is stolen or lost, the user just deactivates it. High security applications may be reinforced with 2nd factor authentication, so a lost cell phone in the wrong hands does not pose a threat.

“The Certus authentication system eliminates user credentials that can be separated from the user and misused in an attack,” Wolosewicz claimed. “It is significantly easier to use than two-factor verification and more reliable than biometrics. The cell phone has become an appendage for most of us and now it can become a universal key to the Internet. It’s keyless entry for the Web”. In payment systems applications, Certus never stores user credit card information, so even if a corporate system is somehow compromised, no credit card numbers or passwords can be stolen.

For the past few years, and going even further at this year’s CES, consumer electronic devices, from mobile phones to automobiles are filled with easily hacked technology, even if it isn’t currently activated.  There are already reports of smart TVs being used to harvest data on customers, without their knowledge, while they watch their favorite programs.  The rapidly growing popularity of streaming entertainment means a growing number of online accounts protected by the same user names and passwords for personal computing devices all of which makes individuals vulnerable to national cyber attacks.  For example, let’s say Sony does decide to release The Interview on streaming media.  It would be relatively easy right now for those same Korean hackers to collect the names and personal information of anyone who watches it.

We may have reached a pain point in electronic device security that goes so far beyond bandwidth, speed, latency, capacity and power usage it makes all those issues irrelevant to the current problem of security.

See part one of the interview.

This article sponsored by Blaylock Engineering, EuroCal Group, MeBox Media and Busivid.

Outsourcing 101: A new series

Outsourcing, both onshore and offshore, is here to stay and is very big business (link numbers), but it is not static.  Suppliers in Asia and the Indian subcontinent are still the leading players but significant resources are growing in the US and the European Union that are challenging that traditional hegemony. Outsourcing. Business Background.New Tech Press has been looking at this trend for the past few months and will begin publishing a series of articles and interviews beginning this month and running deep into 2015.  What has become clear is outsourcing falls into distinct groups:  Multinational enterprises providing soup-to-nuts services for large customers, foreign national organizations targeting US and Europe corporations and “blended” suppliers that feature local management with foreign-based resources.  The latter two often provide unique specialization in design and industrial niches, like security, automotive and web design.

There are also distinct divisions in the cost of these resources that range from expensive but necessary when customers lack internal resources but need high quality support, to very inexpensive when customers can fudge on quality, expertise and schedule.  The blended companies seem to span and straddle the differences.

Somewhat surprisingly, offshore resources located in the EU’s eastern most countries, Poland in particular, are demonstrating growth outstripping that of India and could soon reach parity.  Those countries, because of a closer relationship, culture and respect for intellectual property are becoming a favored source of higher end service once considered the exclusive domain of India.

Another clear trend is the return of importance of precision machining in the United States.  US based firms are finding that rising costs in personnel and shipping are negating offshoring benefits.  That fact, combined with the expected lower quality, environmental factors and the rising use of high-quality 3D printing is making US-based manufacturing highly desirable and profitable once again.

These are the aspects and trends New Tech Press will be looking at in the coming months.

The coverage is being underwritten by Eurocal Group, MeBox Media, Blaylock Engineering

Analysis: Time for the semi and wafer industries to make nice

By Lou CoveyEditorial Director

Last week we did a piece on the dysfunctional relationship between the semiconductor industry and the silicon wafer industry.  Both have the potential of healing the rift and ensuring a profitable give and take for several decades, but there is also the potential that, if attitudes do not change within the next decade, it will get even worse.

IBM is recycling silicon wafers for solar use

Last week’s article pointed out that the wafer companies stuck it to the semi industry when the solar boom hit 10 years ago.  Wafer fabs shifted resources to solar because the requirements for solar cells was not as stringent as those for semiconductors, and then they jacked up the prices for semi customers.  The chip companies took it in stride, but when the solar bubble popped five years ago they started demanding and getting price concessions and have been for several years, in the face of rising demand for computing silicon.

Here’s the rub.  The solar panels containing that silicon had a 20-year lifespan when they were installed.  It is now 10 years later and those early panels are showing degradation now, with an average degradation of 1 percent per year.  By the end of the second decade, early adopters will be back on the power grid unless they replace the older, less efficient panels.  That is going to create a new demand for silicon wafers for solar panel use in 10 years.

IBM stepped up with new processes to recycle semiconductor wafers and will be going into the business of supplying material to the solar industry, but the wafer industry as a whole could repeat history by looking to make a quick killing by selling cheap product to solar and jacking up prices again.  It’s time for both sides to sit down and plan accordingly.

Economics and Vengeance wreak havoc with wafer market


Deliveries are up, revenues are down for silicon wafters By Lou Covey Editorial Director

As Semicon West approaches in two months, there will be a rising chorus of predictions for 450mm manufacturing and test equipment. But silicon wafer industry revenues are heading in the wrong direction, dramatic technology advances in test and reclamation, and an overall urge for revenge among their customers over gouging during the solar boom.

In February, SEMI issued its annual report on the state of silicon wafer industry that showed a small increase in the delivery of wafers to customers in spite of a well-known glut of supply, but a sharp decline in revenues that outstripped reasons based on inventory. What is more, this appears to be developing into a trend over the past three years.

When questioned about the discrepancy, SEMI replied simply, but cryptically, that it was due to "market pressures and a weak yen.” Yet placing the blame on the decline of Japanese currency seemed knee-jerkish at best. While it is true the yen has plummeted over the past 20 years, the decline has relatively flattened out over the past five years. Japan, while still the leading supplier, has seen a significant increase in competition worldwide especially in China, Malaysia and even the US, modifying the yen's influence even more. The extremely vague explanation "market pressures" is even more suspect. Let’s take a look at test, for example.

A joint study by Hewlett Packard, the University of Oregon and the University of California, San Diego showed that applying data mining to optimize IC test resulted in significantly higher yields on virgin wafers. At ITC in 2013, Craig Nishizaki, Senior Director of ATE Development at NVIDIA, extolled the benefits of test data management methodologies. Higher yield through improved test reduces demand. Although, you wouldn’t know it talking to people in the test management industry.

Jim Reedholm, an independent representative of Yieldwerx, based in Austin Texas. “I haven’t seen any data that would backup any claim that effective test management would reduce demand for wafers, but it sounds right.” Executives at other semiconductor test management technology companies were either unresponsive or, strangely enough, unlocatable.

OK, so maybe no, maybe yes. How about reclaimed wafers?

According to Semico analyst Joanne Ito, improvements in reclamation processes for silicon wafers has dramatically dropped the demand for test wafers for semiconductor manufacturing and, according to SEMI, both revenue and material shipments are up 14 percent from last year. Ito believes that will be a trend going forward, but SEMI predicts that increase will flatten out by 2015. We might be getting closer to a reason for the discrepancy between revenue and shipments.

Reclaimed Silicon Wafer market is Spiking

According to Ito, during the solar boom up to 2008 there was a significant lack of raw material for wafers, which drove up prices for the high-quality virgin wafers that the semiconductor industry needs. That same solar demand ate up the capacity for 200mm and 300mm manufacturing. When the boom blew out, demand for the raw material dropped and a huge overcapacity developed in 200-300mm facilities.

OK, so oversupply tends to push down prices and revenues. Econ 101. There is only one problem. Demand has not decreased in the semi industry. It is increasing as demand for smart devices worldwide drives semi design starts. Hence, the steady increase in shipments to semi customers. Why the dramatic drop in revenue?

Ito thinks the answer might be vengeful purchasing executives in semiconductor companies.

“During the solar boom, the semi industry (which has higher requirements for the wafers than solar) saw an annual increase in prices of 10-12 percent from the wafer manufacturers because of the cost of silicon raw materials. So the semi industry said, ‘We paid you a when the cost went up, we want this cost reduction reflected in our prices.”

Now we have a better idea what “market pressures” are actually in play. The opportunity to return to the wafer manufacturers what they forced upon their customers a decade ago is too good to resist.

This quid pro quo may seem good for the industry in the short run. However, long-term it is causing significant problems. We will take a look at that next week…

Do you agree there is an element of vengeance going on, or do you see other factors at play? Leave a comment and tell us what you think.