EDA industry needs a reality check By Michael Santarini, Senior Editor -- EDN, 1/19/2006

Four years ago, the EDA industry appeared to be on top of the world; now, it appears to be taking desperate measures to show a recovery. In 2001, when every other industry was struggling under the weight of the worst recession in modern times, the big three EDA vendors were putting up solid but not stellar revenue gains, and EDA start-ups accounted for three of the top 10 IPOs (initial public offerings) across all industries.....

...... was a high point for the EDA industry, but it didn't take long for reality to kick in. About six months later, the EDA industry learned the long, hard lesson that it is not recession-proof but rather a recession indicator. Since then, the EDA industry has been desperately trying to show that it is an indicator of a recovery. It hasn't yet recovered, but, sadly, it appears to be desperate to show that it has. Indeed, several reports from the field claim that EDA vendors are avidly discounting tools and even offering all-you-can-eat-buffet licensing to their biggest customers, further delaying the industry's recovery.

A closer look at the release shows that true EDA, which comprises tools, maintenance, and services (in a good year), is in fact down; roughly 20% of $1.09 billion in EDA revenue for the quarter came from IP (intellectual-property) revenue, not traditional EDA.