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In the past year, vendors of electronic design automation (EDA) tools have been experiencing a significant increase in the demand for design consulting services. The market for professional EDA services was approximately $150 million in 1995, and this figure will probably double in 1996.
This growth in design services, including a trend toward more complete outsourcing, reflects technical and business issues facing companies that provide advanced electronic systems. While it's turning into a big money-making opportunity for EDA vendors and design consultants, outsourcing also creates beneficial ramifications for the overall design community.
The increasing complexity of designs is obvious in the array of high-performance chips found in today's electronic products. At the same time, suppliers of end products (systems houses) are under increasing business pressures to add features and lower prices. The technology cycles are shortening, and it's increasingly hard for electronic design departments at system houses to keep up with the pace of change.
The designers of next-generation devices often require re-education in the form of on-site training, and design methodologies must be re-engineered to achieve maximum productivity. Expert assistance is frequently sought for setting up a custom design environment and integrating best-in-class tools in the most workable way. Outside consultants are also retained for library development and tuning the work-flow management at a site.
Indications are that EDA may be transforming itself into a service industry. During the past year, Cadence restructured its entire organization around the design services business. Chief executive Joseph Costello said about design outsourcing, "I haven't been this excited about an opportunity in EDA since I joined the industry 10 years ago."
While the outsourcing phenomenon is making the most waves at Cadence, it is also an important part of the business model at Mentor Graphics. And Quickturn Design Systems has always provided a broad services component with its emulation technology. Synopsys and Viewlogic, on the other hand, offer consulting services for specific types of work, but have not made outsourcing a part of their overall corporate mission to the same extent as Cadence and Mentor Graphics.
At its inception, the idea of completely outsourcing electronic design work was controversial. On March 6 of last year, Cadence Design Systems, San Jose, and Unisys Corp., Blue Bell, Pa., announced...