IBM changes EDA strategy; going independents' route

Electronic News, June 19, 1995

SAN FRANCISCO--IBM, which until last December was marketing its electronic design automation products and services through a distributor, last week disclosed that it has changed its strategy to forming partnerships with independent vendors.

At last week's Design Automation Conference, IBM reported it had formed independent marketing agreements with Pacific Numerix Corp. (PNC) and Scientific Computing Associates (SCA). And more such partnerships are planned in the near future, Kevyn A. Salsburg, leader of IBM's EDA consulting services, told Electronic News.

Asked if IBM has plans for more such partnerships, Ms. Salsburg said: "Yes, there are. Watch this space in the next couple of months." Asked if IBM planned acquisitions in the area, she replied: "In the near term, we believe the way we can best meet our customers' demands is through a partnership."

Ms. Salsburg said IBM is uniquely qualified to take customers to deep-submicron circuit designs below 0.50-micron because "we've been practicing that technology probably more than anyone else" in ASICs, microprocessors and memory chips. "We are going to couple some of our internal CAD tools with services to help our customers to take some pieces of both our methodology and our tools and fit them into their existing methodologies."

The PNC and SCA products will be marketed through IBM, she said. She said IBM's EDA consulting services is "targeting a lot of these (EDA) services to help our traditional competitors" in the semiconductor and computer industries.

The marketing agreements disclosed last week will allow IBM to market PNC's electronic design validation system and SCA's Linda, Piranha and Paradise parallelization tools as part of its larger suite of product and service offerings that enable circuit designers to reduce errors, shorten design cycle time and ease the creation of newer high-performance chipsets.

IBM said PNC's simulation tools streamline the transition from design to manufacturing for printed circuit assemblies and electronic systems. SCA's three products work together to enable sequential code to be converted into portable parallel and distributed applications, the company said.

IBM said that by combining Pacific Numerix tools with SCA's products, electronic system designers can gain significant performance improvements. Using SCA's parallelization technology, PNC's simulators can run on supercomputers or across networks, at speed-up factors nearly equal to the number of available CPUs, IBM said. For example, running on a 15-node SP2, SCA's products would allow PNC's tools to run approximately 14 times faster, it said.

At the end of 1994, IBM dropped the marketing of its EDA tools and services through an outside distributor "because that channel quite frankly wasn't working," Christine King, IBM's ASIC product solutions manager, told Electronic News. Ms. King also said IBM sold about $140 million in ASIC products to the merchant market in 1994 from a dead start a year earlier. "Essentially, last year in 1994, we went from zero merchant market sales to 28 percent of our sales being in the merchant market in 1994. If you look at Dataquest, we are the fourth largest ASIC vendor in the world" with a Dataquest-estimated $500 million in sales to both the internal-captive and external merchant markets, according to Ms. King.

She declined to give any official IBM market estimates but said "Dataquest has some pretty good numbers." Ms. King said IBM's goal is to have at least 50 percent of its ASIC sales in the merchant market. "Our goal is to be at least 50-50," divided evenly between merchant and captive sales. Asked about going from zero to $140 million in merchant ASIC sales in one year, Ms. King said: "It's fantastic. It's been a great year for semiconductors." With designs of up to a million gates, Ms. King said: "We've delivered the densest, fastest ASICs in the industry. We went from nothing to being a leading technology supplier."