Value propositions

I spent some time earlier this week giving someone a bit of free consulting about value propositions in EDA. If you take the high-level view then there seem to be three main value propositions in EDA: optimization, productivity and price.

Optimization means that your tool produces a better result than alternatives. A place and route tool that produces smaller designs. A synthesis tool that produces less negative slack. A power-reduction tool that reduces power. This is the most compelling value proposition you can have since the result from using your tool as opposed to sticking with the status quo shows through in the final chip affecting its price, performance or power. The higher the volume the chip is expected to run at, the higher the value of optimizing it.

Productivity means that your tool produces an equivalent result to the alternatives but does it in less time. My experience is that this is an incredibly difficult value proposition to sell unless the productivity difference is so large that it is a qualitative change: 10X not just 50% better. Users are risk-averse and just won’t move if they have “predictable pain.” It may take an extra week or an extra engineer, but it is predictable and the problem is understood and well-controlled. A new tool might fail, causing unpredictable pain, and so the productivity gain needs to be enormous to get interest. Otherwise the least risky approach is to spend the extra money on schedule or manpower to buy predictability.

The third value proposition is that you get the same result in the same time but the tool is cheaper. For something mission-critical this is just not a very interesting value proposition, sort of like being a discount heart surgeon. Only for very mature product spaces where testing is easy is price really a driver: Verilog simulation for example. The only product I can think of that strongly used price as its competitive edge was the original ModelSim VHDL simulator, and even then it was probably simply the best simulator and the low price simply left money on the table.

Another dimension of value proposition is whether the tool is must-have or nice-to-have. By must-have I don’t mean that customers must buy your tool (nice work if you can get it) but that they must buy either from you or one of your competitors or roll their own. Nice-to-have means that a chip can be designed without a tool in that space, doing stuff by hand, creating custom scripts, having a longer schedule or whatever. It is almost impossible to build a big business on a nice-to-have tool.

Moore’s law makes must-have a moving target. Signal integrity analysis ten years ago was, perhaps, nice-to-have. Then for designers in leading edge processes it became must-have. Eventually the technology got rolled into place and route tools since everybody needed it.

That is actually a fairly typical route for technology. Some new wrinkle comes on the scene and somebody creates a verification tool to detect the handful of fatal wrinkles that can then be fixed by hand. A couple of process generations later, there are 100,000 fatal wrinkles being detected and so it is no longer adequate to have just a verification tool. It becomes necessary to build at least some wrinkle avoidance into the creation tools so that fatal wrinkles are not created, or are only created in manageable numbers again. So the tool goes from nice-to-have, to must-have to incorporated into the main flow.

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