Survival of the fittest EDA companies
It’s the 200th anniversary of Darwin’s birthday today. Not to mention Abraham Lincoln’s. On a personal note, Darwin went to university at Edinburgh and then Cambridge (the real one in England, not that one near Boston), as did I but in the opposite order (although I managed to graduate from both; he dropped out from Edinburgh after two years studying medicine there, which he apparently hated, but the biology building is named after him anyway).
One of the things that I find most odd about the US, along with pretty much any other immigrant and almost everyone in Silicon Valley period, is the politicization of evolution. It doesn’t seem to be that way in any other country. Evolution there is treated the same way as, say, thermodynamics. It is settled science despite the fact that there are minor disputes about little details around the edges. Politicians are not expected to have an opinion on evolution any more than they are expected to have an opinion on entropy (“during my administration entropy will no longer increase at the rate it has been doing over the last eight years”). Even mainstream Christianity, Catholicism for example, regards evolution as God’s way of guiding development rather than pretending it doesn’t exist.
A lot of people are under the assumption that Darwin and evolution has something to say about the origin of life. It does not, it only discuses how development proceeds once life has begun. The origin of life on earth remains an interesting mystery. There is a wonderful overview in chapter two of Casti’s book Paradigms Lost (which unfortunately seems to be out of print now; it is a wonderful read). I assume this is a bit out of date but the Wikipedia entry on abiogenesis doesn’t seem to cover much more than Casti.
I think the controversy about evolution, and that about nature/nurture or sexual differences, stems from the fact that what we would like to be true turns out not to be. We would like to think we are the pinnacle of some constructive biological process rather than the outcome of messy evolution, just like we would like to think that our impact as parents and educators has more impact on our children than is the case, or that men and women really are identical blank slates at birth. The trouble is that it just isn’t so. For example, here is Bryan Caplan summarizing current results on bringing up children: “within the normal range of parenting styles, how you raise your children has little effect on how your children turn out.”
So which EDA companies are going to turn out to be the fittest and survive? I think it is clear that most of the current batch of startups are going to get starved of further funding and are going to run out of money. One or two will be very successful and get picked up by either Cadence or Synopys. Some will become zombies, companies that are slightly cash-flow positive (or even slightly negative) so that they don’t need additional funding, but are not growing fast enough to interest anyone in acquiring them. They will join the batch of current zombies, EDA companies that have been around for years and are not-dead-yet athough I expect some of these will not weather the current downturn.
The Darwinian survivors look to me to be Cadence, Synopsys and Mentor. I think the prospects are poor for almost everyone else. So that leaves us with 2½ EDA companies.
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