Strategy Session

Ah, the joys of doing business in the consumer world when you are accustomed to the business-to-business universe. You need to validate the software on the IC you’re manufacturing months before the manufacturing is complete to stay on schedule. What, you partnered with a company that overestimated demand for a consumer product? Guess you’re stuck with 40 weeks of product inventory.

As I reported in “Moving in: electronics companies shift—with some pain--to the consumer world,” companies will need to make adjustments—sometimes drastic ones—to play successfully in the market.

Would you change your company’s entire accounting system for a new class of customer? That’s what Seagate Technology did. “For a company that’s been around for more than twenty years, that’s difficult,” says Brian Dexheimer, executive vice president and chief sales and marketing officer for Seagate, regarding the transition. Why did the company change its accounting systems? Seagate’s traditional customers want 60- to 90-day price protection, but Dexheimer learned that many retailers demand unlimited price protection. Now there’s an adjustment.

Companies changing their ways of doing business aren’t limited to ones close to the end user—in this case, the consumer. The whole value chain is making adjustments, and even companies that supply technology tools. Craig Johnson, corporate vice president of marketing and strategy for Cadence, says that the digital revolution in the home has made the tool maker more focused on the “customer’s customer.” That translates into providing a category of tool that can validate software while hardware is still in development.

“When a consumer device comes to market, a huge percentage of effort that goes into it is the software that goes on the IC,” Johnson explains. “If there’s the added pressure of a schedule involved, you often don’t have the luxury of having the IC manufactured and completed and see if the software works on it in the proper way.”

Cadence has emulators and accelerators that can behave exactly like the chip that the designers are designing. “We can use the exact same logic and emulate it on a piece of hardware so it allows the software to be validated. So, they know the chip is going to work just like they want it to with the software on it,” he says.

Johnson says that some of his customers have saved months in time to market with the tools. Bottom line: the schedule-centric nature of the consumer market makes efficiency that much more critical for any company in the value chain. 

I hope you’ll learn from the stories that Dexheimer and others interviewed for the Special Report share. If you would like to add your own story, please feel free to email me at debra.bulkeley@reedbusiness.com.