"The Indian EDA marketplace"

Even

though India is a key EDA product development center, its EDA market is barely

five years old, and much of its growth has been driven by the presence of MNC

technology companies. California-based IKOS Systems, which entered the space in

May 1998, has been quite optimistic about its Indian operations. Its software

development facility at Noida is now the largest among IKOS’s three such

centers across the world. Last year, IKOS also started its sales operations in

India and is trying to increase its visibility.

IKOS caters to the electronics industry worldwide and its clients include

Texas Instruments, ST Microelectronics, Microsoft and IBM. The company’s

president and CEO Ramon Nunez has been instrumental in creating a niche for IKOS

in the high-end design verification solutions market. Nunez not only has a long

experience in marketing, but has also developed an insight into the technical

evolution of the EDA industry. He was recently in New Delhi, en route to attend

the International Conference on VLSI Design in Bangalore. He spoke to DATAQUEST

on the trends in the EDA market and IKOS’s plans and future strategy.

Excerpts:

How critical is design verification for a technology company?

Design verification is the most critical issue that technology companies face

while developing high complexity products. When 50-70% of the design cycle is

spent in designing and adding the functionality of the product, verification of

the functionality becomes very crucial. The biggest opportunity for us is to

develop products that address this issue. And within this area, functional

verification is the biggest problem because you are dealing with very large

complex designs and you need to test the complete functionality of that system

on a chip (SoC). To do that, we have to deal with system-level issues,

chip-level issues, immigration and other properties that involve a lot of

complexity.

The SoC functionality seems to be increasing endlessly. Do you see any

leveling out or slowdown?

Technology has moved so quickly that every time there appears to be an end,

the engineers solve it, so that hurdle is no longer around. I don’t think

there is any end in sight in the next 5—10 years. What I think is going to

happen, though, is that the design methodology and tools will have to change to

address more of the broad-based design solutions because we can’t see

engineers developing 50 million gate designs from scratch. They are going to

develop those kind of large complex designs by bringing in pre-designed blocks,

so the new part is going to be not more than 10%. So the increasing complexity

in designs will not slow down but lead to change in design methodology and

emergence of new design tools.

How would you position your company globally and in India in terms of market share?

We are the second largest verification company in the world. The largest is

Cadence with the acquisition of Quickturn. It’s only been about a year since

we started selling our products directly in India, but we expect a growth of

40%. There is tremendous growth opportunity here.

Considering the fact that your products are on the high end, what kind of

growth do you see for your business?

There are two main businesses we have–simulation acceleration and

emulation. Simulation acceleration is a quite mature product so that has a flat

growth. Emulation is a fantastic technology that has grown very fast. In 2000,

we saw a growth of 60% in that business and we expect over 50% growth this year.

But the technology sector is expected to see a slowdown this year. Won’t

this affect growth of a niche industry like EDA?

In comparison with the electronics industry, EDA is a small market. But

within the EDA market, we have tremendous opportunity. So, in that context, we

have grown at an average rate of 30% annually in the last eight years and we

expect this growth to continue. I don’t see this technology revolution slowing

down. Although in 2001, we expect to see a slowdown in some areas in the

technology sector, but all this is relative. If you had a 30% growth till now,

an 18% growth is certainly a tremendous fall, but it is still a healthy growth.

What kind of a set-up do you have in India?

Today we have three components of our company based here in India. The

largest one is the research and development team and the second is a team of

technology engineers that help our customers use our products. The third area is

sales and that’s the smallest group today. The Indian market is still in the

formative stage to be able to represent a huge market opportunity for IKOS or

even the EDA industry as a whole. But it is a very key center for product

development.

Could you elaborate a bit on your marketing approach here?

There are two facets to the approach we have taken with respect to India. One

opportunity is to sell our products here because most technology companies have

a presence here–Texas Instruments, ST Microelectronics, Microsoft, IBM, and so

on. Unlike Europe or North America, where they have long-term established

development centers, India has not had that. It is only during the last five

years that India has seen a growth in this area. So we can now sell our products

to the companies that are based here. The other opportunity for us is to develop

products.

SHWETA VERMA



in New Delhi.