Ecosystem competition heats up
By Ed Sperling, Editor in Chief -- EDN, June 5, 2007
For the past several years, many EDA companies thought they had discovered a safe haven inside of ecosystems from runaway R&D costs at the leading edge of Moore’s Law. That safety net is beginning to look a lot less secure than it once did, however.
Competition within ecosystems is beginning to heat up. Even though the idea behind these consortiums led by IBM, TSMC, UMC and others is that no single company can afford to do everything by itself anymore, the reality is that these consortiums can’t afford to support additional development and integration at the same level for all members.
In some cases, that means placing bets on unique tools or intellectual property. In others, it means looking for the best-of-breed solutions. In still others, it means eliminating all but the most tightly integrated technology.
“This is the reality of bandwidth,” said Kuo Wu, deputy director of TSMC’s product and design service marketing division. “The basic model says there should be no discrimination, but the reality is different.”
Wu said the different technology segments fall into core groups of ecosystem partners. In the overall EDA flow, for example, TSMC’s core group consists of Synopsys, Cadence, Mentor Graphics and Magma. In design for manufacturing, the core group has yet to be defined. But he noted that one of the big DFM software companies, which he declined to name, was almost removed from the core group recently because its algorithm was faulty.
“It’s always good to create competition,” Wu noted.
At IBM, the situation is much the same. “We pick three to four companies with deep relationships,” says Steve Longoria, VP in charge of the Common Platform. “It’s getting harder and harder for small companies.”
Still, who stays in the ecosystem and who gets sidelined or pushed out isn’t always intuitive. “This is really about customer choice,” said Kevin Meyer, VP of worldwide marketing and platform alliances at Chartered. “Anyone with an optimized solution across all platforms can join.”
The only caveat there is that the ecosystem partners cannot be direct competitors, and their business model has to be viable. But in areas such as DFM, Meyer says the Common Platform ecosystem has committees that pick the best in class and which solutions are optimized for the Common platform. And while companies can stay in the ecosystem, they don’t get the same kind of support as those with the deep relationships.
“Our investment is being driven by the customer channel and best in class,” he said. “We will always continue to evaluate new solutions, though.”
