Apache's acquisition is Optimal

Don’t know if you’ve heard it yet but Apache announced it has acquired Optimal Corp. for an undisclosed amount.

I’ve written about a lot of these EDA M&A deals over the years and this is one of the most promising acquitions, yet. Let’s face it, most EDA startups are launched with the express intent of getting purchased by a big vendor as soon as possible to get VCs and the startup’s highest officers a premium ROI as soon as possible. In short, making a quick buck is first–creating a real innovative technology is second or third. But Apache’s one of those companies that from the get-go has been doing it the right way— technology first.

The company made its first splash with its Redhawk power integrity tool. A few years back, Apache was one of the only privately held EDA firms to get selected for TSMCs reference flow on the strengths of Redhawk. As a few folks have pointed out, these days, making TSMCs reference flow seems about as hard as gaining membership to Costco, but back in 2000, Apache getting the nod from TSMC was quite an accomplishment.

While most companies, would usually give up the ghost and agree to get purchased by big vendors who didn’t yet offer those tools, Apache resisted and didn’t rest on its laurels: it actually worked hard to make itself profitable. Then Apache moved on and leveraged its position in power integrity to introduce a complimentary signal integrity tool called PsiWinder, which has also seen great success.

Then last year, the company took another step, perhaps maybe a step a might too early, to address on-chip thermal analysis. Of course, in these days where leakage is a primary concern for designers doing 90nm digital ICs, it logically follows that thermal design would also become a mainstream problem, because heat increases leakage, which in turn creates heat—spinning into vicious circle—perhaps a thermal runaway. Most mainstream designers are just now starting to use low power techniques, even if they don’t want to but they haven’t started using on chip thermal tools. But, if you read my report on tools for 45nm (“How low can you go? A look at 45-nm-IC-design challenges”), you’ll see that the folks in Freescale’s wireless group, one of the early adopters of 45nm, are starting to use on-chip thermal analysis tools (I didn’t ask if they are using Apache or Gradient, which was the first to offer a tool for on chip thermal). So, it seems that it’s just a matter of time for thermal tools to make it mainstream—that is, if things keep tracking with bleeding edge flows becoming mainstream flows.

Apache could certainly just have waited around for thermal to become more mainstream but it hasn’t, and indeed earlier this year, Apache jumped into the broader world of chip-to-package signal integrity (in this case EMI) and power analysis with its introduction of Sentinel. That tool focuses on-chip and package analysis. And when the company announced the tool, Apache’s CEO Andrew Yang said the company also realized it needed some way to account for signal and power integrity across not only the chip and package, but also the PCB.

Here’s where the Optimal acquisition makes great sense. Optimal specializes in package to board analysis and seemingly offers a very formidable tool in this space, as Optimal has also been on TSMC’s reference flows for the last 4 years. To boot, Optimal has a complimentary package and board thermal analysis product. So adding Apache’s know how in on-chip analysis to Optimal’s know how in package to board seems like a perfect fit.

For years, we’ve heard from users and vendors that there was a great need for a true chip, package, and PCB design and analysis flow. It’s been one of those pipe dream/holy grail technologies.

Often times, when a startup develops a promising technology and then is bought by a big vendor, nothing more is heard of the technology or simply the technology does not reach its full potential (big vendors may make a killing selling a new tool to their large customer base but the technology development often slows as the original innovators are seemingly busy tuning their new Ferraris).

What’s encouraging about Apache buying Optimal is that the Apache folks have a track record of doing it right: technology first, and business results have followed. (It’s interesting to note that while Apache’s been a strong company in terms of technology and innovation, it’s been equally strong as a business. The company’s been profitable for the last five years. How many other EDA startups can claim that?)

I’m usually a pretty skeptical editor, but everything about this acquisition looks promising to me: Apache strengthens Sentinel and Sahara, tools that are already visionary. It’s been fun to watch Apache grow and it will be interesting to see what the future holds: acquisition? IPO? Perhaps Yang et al will be happy to keep it private ala succesful EDA and IP vendor Denali Software? I hope other EDA entrepreneurs take note (public firms should take not too)…Apache’s doing it right.