In a recent editorial in the January 19 edition of EDN, Michael Santarini seems to accuse EDAC of cooking the books by including IP revenue in its MSS (Market Statistics Service) covering the second quarter of 2005 as part of the total EDA revenue. He claims that IP is not part of EDA, and that including that revenue provides a distorted, and thus inflated picture of the EDA industry. His position is wrong because it fails to recognize the definition of EDA, and the need for change as an integral part of growth.

EDA stands for Electronic Design Automation, and the industry embraces all the tools necessary to design, develop, test, verify, and manufacture electronic systems. As the complexity of systems grew, designers embraced design reuse methodologies as a way to both shorten development cycles and increase reliability. IP modules are the essential constituents of design reuse, and thus EDAC is correct in considering the IP market as part of the EDA industry. The fact that some traditional EDA vendors have chosen not to participate in this market segment, does not prove the opposite: it is simply a business decision each company must make.

For years, including in the pages of the same magazine, I have encouraged the EDA industry to grow by expanding its horizon to include related markets. Tools that support hardware/software co-development generate most of the revenues in the ESL (Electronic System Level) market, and yet traditional EDA tools had never previously addressed the software market. Does this mean that EDAC should also not report these numbers? Or maybe only report that portion of revenue directly attributable to hardware development only? Of course it does not. Commerce in IP modules is an integral part of EDA. Denali Software Inc.’s generate all of its revenue from various forms of IP, and its numbers have been part of EDAC revenue reports for years. Mr. Santarini has never objected to their inclusion before. Few would argue that EDA is going through easy times: change is painful and with change come at times a few wrong initiatives: but including IP revenue in the EDA industry MSS is not one of them.

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