Altium: EDA Oz-style

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Confused - I appreciate the interest and conversation. I guess you and the market will be the final judges of whether what we plan over the next six months is "a good and interesting thing", and the only judges that actually matter, I guess, along with our shareholders. We are definitely addressing future technology trends, and we've been talking to media in the US and Europe on where we see some of this (and this thread of comments resulted from some of that work).

Alan Smith - sure I looked at the Annual Report when I was trying to make sense out of this blog. As I said above, it seemed odd to me that Altium could grab so much market share from competitors, but lose money and layoff employees. From what I have heard the overall PCB market (TAM) is fairly stable, maybe even slightly on the rise. That's why the math doesn't add up for me. Anyway, it is good to know that Altium Marketing is hard at work. Hopefully you guys are looking at future technology trends and driving needed improvements into the product as well as positioning yourselves in the media as taking over the market from the big guys. Best of luck.

Dear Confused - yes, we do have plans up our sleeve, but you'll understand me keeping them there for now! Fourteen per cent fewer employees implies you watch us closely (or, at least, read our annual report). I guess we weren't alone in losing that kind of proportion of employees early last calendar year - but they all weren't from our support teams and definitely not from our R&D organization. We're known for our support (per the blog entries) but hopefully never complacent. Any drift in that direction would surely catch us out. Having a much larger user base does, of course, give us new opportunities to extend those relationships. And the survey to which all this (mostly anonymous) conversation relates also indicated that users like our product for what it delivers ahead of what it costs.

Alan Smith - so maybe you can clear up my confusion. An Altium User thinks you are using the razors / razor blades sales strategy. You are making less money with 500 new customers, so something crafty must be up your sleeve. I just can't figure out how these numbers add up and how you plan to sustain your (growing?) market share with 14 percent less employees? I mean, you do have to support those 500 new customers ... I think?

Glad to see that an Altium employee is reading this thread and providing feedback. The new package and video demos are very compelling as are the anecdotal testimonials here and on the website. It may be time to invest in an upgrade...

Hi. A note of clarification on John L's comments a few entires back. Altium is not a collection of tools or other companies, but a single application created using applications developed through the acquisition of a number of companies following our IPO in 1999. At the risk of over-stating the marketing messages (that's my job at Altium, so mea culpa) one of the defining differences of Altium Designer is that it is a single application accessing a single data model: one view for every designer working on a design project across the hardware, software and programmable hardware domains. The acid test is to ask yourself how many design tools you have linked together to do electronics design and data management across all three domains (and within design domains). If the answer is more than one, you're not using a unified design solution. I'll concede that some of the technology IP (for example, the FPGA compiler) originated with other companies. What we haven't done, though, is stitch together a chain if disparate tools to "make do". Instead, we created a new platform hosted on Windows which forms the platform for the schematic editor, simulator, PCB editor, autoplacer, text editor and others, all managed with a GUI manager and an IO manager (this is the short-form summary, you understand). And this has been developed continuously over the past 10 years.

All I can say is that this group of posts is very indicative of what I have seen in my past 12 years in Engineering; The old guys complain about the new guys (Insert guy using Protel 99SE), and see no value in changing? All the while, the world around them is changing and the spoils go to the guys that embrace it and reinvent the mouse trap (insert Altium). All I really know for sure is two things; EVERYONE I know that uses Mentor and Cadence complain about the lack of innovation, high maint costs, poor support, etc. While EVERYONE I have ever met using an Altium product is generally pleased and have much thicker wallets (infer it costs less!!!!) At the end of the day, in my business I see more and more of my customers requesting I use Altium than ever before and it has become my preferred tool. The reason? My customers get their designs faster which means they come back. I am at the point that when a customer asks me to support them in Cadence or Mentor that I say, sure. However, if you allow me to use Altium, I can get it to you much quicker. Inevitably they agree and usually end up buying Altium themselves. At first I resisted the FPGA stuff as well and did the usual, "I use the vendor tools". However, I gave a try and found that I can save DAYS of effort using Altium. It would take me a full day transferring pin constraints from ISE into my Cadence or Mentor tool chain. With Altium, it takes literally 15 seconds. If I want this in Cadence or Mentor I have to pay extra for yet another tool on the wood pile of recycled trash they already made me buy.... The person that said, "I don't understand why Altium keeps pushing that rock" doesn't seem to realize that is because Altium is embracing the future of design, not the past. Moreover, the days of having dedicated CAD people are over. Engineers now do their own layouts, and engineers use FPGA's... I leave you all with this: I certainly wouldn't want to be selling against these guys right now. 200% productivity improvement for a fraction of the cost. FUD sells life insurance; Value sells EDA. Altium seems to be the only one that has realized this and I, for one, am very happy to see them finally taking it to Cadence and Mentor!!!!

Confused: Yes, it was Paul's guess of 5-10 seats per company, I apologize for attributing it to you. I would guess that many of the sales are 1-2 seats and that you are correct that many are "new" seats. In particular large design groups are not likely to drop current software instantaneously, or possibly at all, given all the costs of switching. Smaller companies can be more nimble as only a few people need to agree on switching and how to go about it and the users are generally more aware of the cost/value of the software. I'm not being defensive (and no I don't work for Altium, own the stock, etc), its just that I'm cranky in my old age and I get frustrated when shopping for EDA tools because it's very hard to make an informed decision on what software is best for a design team. Like Paul pointed out in his opening, Mentor and Cadence seem to sit around and complain that the EDA business is tough rather than looking where they can add value for customers. On the other hand, I think Altium is really making a sustained effort to offer useful features to users and put careful consideration into the entire design process so I don't like to see them being dismissed for not having the market power to maintain high margins. It's true Altium used a low per seat cost to gain customers (they had various promotions throwing in training, hardware, or other seats) but it may turn out to be a very good strategy if they convert those seats to ongoing subscriptions. Just look at the business model of US cell phone services or video game consoles, by giving away or deeply discounting the upfront cost they can more than make up for it in additional subscription costs. We'll see how it pans out in 2-3 years.

An Altium user ... did your read Paul's blog? I did not make up any numbers - those are numbers in the article above and from the Altium Annual report. I wondered why Paul would proliferate information that does not add up. You may be correct that 500 new customers is not a lie, but I highly doubt they converted anywhere near that many users from other tools. I am guessing they simply dropped their tools in for (nearly) free and called it a new customer ... and you are right, that is marketing ... but not a sustainable business plan. btw ... you seem a little defensive.

An Altium User: While you're correct that I'm running a 10 year old version of design software, I don't feel that it is fundamentally different. I wouldn't be suprised to see that the Altium Designer codebase has remnants of the original Protel software. While I understand the need for software maintenance that has not always been an available option for Altium/Protel. I would probably have opted for purchasing maintenance if it was available at a reasonable cost, or the newer versions of the software if there was a discount and a demonstrated improvement in usability and/or functionality. Instead there were always some new features but very few bug fixes and usually several new bugs. With the goal of producing correctly designed boards as the fundamental use of the software it's been very hard to get excited about taking on the next set of bugs and workarounds that accompanied each Altium release. And while I appreciate that they have to revise the software to stay competitive and marketable there should've been a matching effort to improve the quality and reduce errors. We basically like the software and do feel that it's a good value. We have made money off of the boards that we produced with it and have learned most of the workarounds and gotchas. We are occasionally still suprised. By the way we run Windows 7 and XP - not Windows 3.1.

I'm an Altium user. We converted from a Mentor DxDesigner/PADS flow last year and I previously used Orcad. Overall Altium is much better design software for our mixed signal PCBs and I don't hesitate to recommend it. I'm certain in at least one case the switch to Altium saved us a board spin which in itself would pay for a seat of Altium. For things that need to be done on every project it is very efficient, such as generating all the documentation need for fab, assembly and test. We haven't fully integrated it into our FPGA flow yet so I can't comment on that portion of it. I've been very happy with Altium and the price is a steal. I'm really surprised at the negativity from other posters, especially since most of them apparently have never used or possibly seen Altium Designer. Autorouting guy: Why all the FUD? Have you looked at how Cadence, Mentor, etc. have performed? Do you really think a company can't continue after a round of layoffs? A successful company that hasn't had a round of layoffs is the exception, not the rule. AM confused: Maybe your confused because you made up some numbers and then said they don't match Altium's numbers. Maybe you should consider that the purchases are from companies with less than 5 seats each and/or Altium offered some promotional pricing to win new accounts. Altium's claim isn't a lie, its called sales and marketing. Sure, they put their best foot forward and may pick some stats that make them look good but their is nothing wrong with that. In fact, our experience with Altium is that they are much more straightforward to deal with than most other EDA companies. Steven Ackerman: Do you really think commenting on a 10 year old version of different design software helps people evaluate Altium's offering? Are you still using Windows 3.1? Software subscription/maintenance costs are very common in the industry: Mathworks, Mentor, Cadence, National Instruments, Altera, etc. Just like Altium they charge maintenance to help pay for technical support staff and to develop new features. Altium's support cost is quite reasonable for the value you get and that they release new features and updates at least twice a year. Alex D: I agree with you to some extent. For me, the key was realizing that in many cases Altium can be expert friendly so on first use something can be unintuitive but once a function is learned it is very efficient and powerful. It's a bit like Linux versus Windows: there are things I can do in Linux by typing a few characters that would take hunting through layers of GUI in Windows.

Oh, and Altium has the strangest help file. Or rather, it doesn't have one at all. Instead, they have a million (actually, hundreds of) PDFs. Each pdf is typically 10-40 pages long--a sort of article concerning some area of PCB design. These are good to read, if a little wordy. But, no actual help file. Altium is a strange little software.

I use Altium because it's the best. Yet at the same time it frustrates and saddens me. In particular, it has the appearance of a great, easy-to-use UI. And in some respects it's true (perhaps compared to its competition). Yet so many commands have obtuse labels, so many things are split into five different commands when one interface would be ideal, and it's all pretty poorly organized. For example, consider these options in the "Board Shape" submenu of "Design": - Redefine Board Shape - Move Board Vertices - Move Board Shape - Define from selected objects - Define from 3D body - Create primitives from board shape - Define board cutout - Auto-Position Sheet Sigh. W t f. This was clearly designed by programmers mapping the UI to internal functions 1:1, with little input from UI designers or users. The FPGA component I've never used. When I briefly looked at them, they seemed far inferior to Altera's amazing Quartus SOPC Builder. Of course, the UI is similarly bitter-sweet. I don't know why they keep pushing that FPGA rock. And yet... Altium has a huge, huge array of features (as the above list might hint at), and the UI isn't actually as horrible as that of many of most of its brethren. I wish Altium was doing better financially than it is. I really root for them. But they need to get their stuff together. They've spent a huge amount on marketing, on their website, on making videos (all of which have turned out beautifully), and not so much attention on the elephant in the room: the odd UI.

Facts on this industry (EDA).. hard to verify/prove. Because Altium is the combination of several companies/products.. I find the numbers a bit suspect. Not using Altium , I was curious about it.... reviewed it's history with another engineer (25 years experience) Appeared to be ideal product - integrating so many aspects of the design process. However, his experience indicates otherwise. He gets schematics from a number of Altium users (they do the front end schematic , he does pcb layout and checking of design). He has NEVER gotten a clean design from a Altium user. Always a few design conflicts are found. He finds the errors when importing into CADint for pcb layout. He supports getting front end schematics from numerous CAD systems and doesn't see consistent issues with other CAD systems. He is using CADint (Sweden).. see cadint.com I think it's main base of customers are in Europe. While CADint doesn't integrate the FPGA design into it's environment, it does a great job in nearly all other aspects of schematic capture, pcb layout, CAM tools, 3D viewing/exporting, etc.. (my opinion) I have used most of the mentioned EDA product lines, though I don't claim to be expert at most recent versions. Most at this point in their evolution will get the job done reasonably well. I am very skeptical of claims of "improvement". It generally indicates a lack of optimization of processes with prior software. Poor comparison... Most real improvements come from re-visiting a company' processes .... with a given set of tools. And the level of training people have given. Basically, a company has to decide if - a new tool will work with their processes? or - Do you try to re-vamp the processes to match a new tool? As a Engineer responsible for the entire process and as one who has worked in a fortune 500 company's engineering support group (cad group).. I do have a current preference...I prefer CADint (sorry .. but the piece was already an advertisement for another product)

Would love for Altium to make it. We've used Protel since version 2.8, and bought the 'upgrade' to Protel99SE. There's a few show stoppers in Protel99SE SP6 including the ability to make a DRC error free board that doesn't match the schematic - but, if you're aware of the warts and don't mind the crashes and lockups, you can make boards. Altium's response has always been to 'buy the latest version' but that's an expensive proposition just to get bug fixes. They just raised the price by $2500 as of March 1st.

Paul, does this make sense? You are reporting that they added 500 customers (estimated 2500 to 5000 users). At $5K a seat - that is $12.5 - $25M in revenue. I just took a look at their annual report and their 2009 revenue numbers dropped by 4 percent. Also, with so many new customers, how do they do they manage with 14 percent fewer employees year over year. Either they are losing customers faster than they are adding them or these numbers do not add up.

Good perspective could have been added by reviewing Altium's latest financial release and asking your Altium interview subjects about how to mesh that data with their spectacular new customer numbers. Their end-2009 6-month financial update report showed a big drop in revenue from the same period in 2008, a swing to a financial loss, and a massive cut in employees. Again, I'm not great at reading these things, so the document is available to anyone on their web site to correct the record. So maybe you could get a quote from your interview subjects about how they plan to support all these new customers and keep the doors open. They're obviously doing something right with all the product sold! But increasing sales orders while decreasing revenue, staff, and losing money is not sustainable.

What about the future of Cadence Allegro and Mentor Expedition?