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20 The PCB Design Magazine • December 2016 share. However, some tend to focus on partner- ing with other EDA vendors rather than acquisi- tion. But this leaves them vulnerable to outside influence. Many small EDA start-ups develop niche technology, an innovation that adds val- ue in a specific area. But their fast growth soon reaches a burn-rate threshold whereby their momentum can no longer be sustained. These companies are ripe for the picking, as their tech- nology can be merged into existing applications to provide an end-to-end solution. The EDA industry is very competitive and is characterized by strong leadership positions in specific segments of the EDA market. These strong leadership positions can be maintained for significant periods of time as the software can be difficult to master and customers are dis- inclined to make changes once their employees, and others in the industry, have developed fa- miliarity with a particular software product. For these reasons, much of the profitability arises from areas in which a vendor is the market lead- er. These industries can be cyclical and are sub- ject to constant and rapid technological change and product obsolescence, price erosion, evolv- ing standards, short product life cycles, wide fluctuations in product supply and demand, and industry consolidation. If you consider the history of any EDA com- pany, you will see multiple acquisitions and mergers over the years. The technology was once an expensive, difficult to use and adminis- ter, UNIX-based dinosaur. I recall having to pay in the order of $100k per seat, for such systems, only to find multiple bugs. I guess the real break- through was back in 1995 when the Windows NT operating system came of age, and was able to support large databases with huge memory requirements giving us a low-cost alternative to UNIX applications. The thought of changing vendors, with no way to port libraries and databases, was a night- mare. And when you finally bite the bullet and purchased new software, it was often worse than the previous solution, plus it had an extended learning curve. Fortunately, EDA companies have cleaned up their act and are now provid- ing feature-rich tools, capable of analyzing and designing extremely complex products. The EDA vendors are working hard to keep up with the changing needs of their custom- ers. Failure to respond quickly to technological developments or customers' increasing techno- logical requirements could make their products uncompetitive and obsolete. The early market is dominated by innova- tors and visionaries who will pay top dollar for new technology, allowing complex and expen- sive competitive tools to thrive. However, the mainstream market waits for the technology to be proven before jumping in. For instance, power distribution network (PDN) planning was previously overlooked during the design process but it is now becoming an essential part of PCB design. The mainstream market, representing more than 65% of the total EDA software market (Fig- ure 2), demands established technology at an affordable price. Most enterprise tools require a high level of expertise to drive. Enterprise tools differentiate based on the size of the team (more people equals faster design, usually), and specialization within the team (e.g., SI/PI, DFM, thermal engineering, etc). The specialist uses only a few tools, so he can learn them well and live with ease-of-use issues easier than a main- stream engineer. However, the mainstream mar- ket demands tools that are intuitive and can be used by any member of the development team from EEs to PCB designers to achieve quick re- sults. The major EDA companies, who once only sold enterprise-level solutions, now also pro- vide entry-level and mid-range tools with highly productive features at very competitive prices. It is amazing how much bang you get MARKETING IN THE MATURING EDA INDUSTRY " The EDA industry is very competitive and is characterized by strong leadership positions in specific segments of the EDA market. "