services firms may be high-profile in the
world of IT, but they barely register on
the EDA radar.
Although most of the big suppliers of
electronic design automation tools have
development centers here, they have no
homegrown competition and don't expect to
see any for at least another decade
because, as one senior executive said,
India's software industry seems to have a
"EDA software development is a complex
and expensive research process," said
Pradip K. Dutta, managing director for
Synopsys India Pvt. Ltd. "An EDA tool is
essentially a product offering, and we
all know that product companies require
multiple years of investment before
breaking even. Most Indian companies
prefer to operate on the 'service' model
where the payback is much faster."
Dutta also cited "the relative dearth
of key technologists/architects in this
domain" as another reason why India's
thriving software industry has yet to
scale the heights of EDA.
Interra Systems Inc. comes closest to
being an Indian EDA company, because all
of its development work is done out of
centers in Noida and Kolkata.
Headquartered at Santa Clara, California,
Interra was founded by two expatriate
Indian engineers, Sunil Jain and Ajoy
Bose. Bose went on to found another
U.S.-based EDA company, Atrenta Inc.
All the big suppliers - Cadence,
Magma, Mentor, Sequence Design and
Synopsys - have their own captive
development centers in India and are
selling an increasing volume of tools
here. However, "These Indian subsidiaries
are involved mostly in implementation
work, while the real cutting-edge
technologies are still concentrated in
the U.S.," said Sanjay Mittal, managing
director at Interra Systems India Pvt.
And they expect no local competition
any time soon. "Product development,
while lucrative in the midterm, does have
certain entry barriers, including
relatively larger investment and resource
needs, a gestation period, technological
complexity and end-market and marketing
knowledge," said Jaswinder Ahuja,
corporate vice president at Cadence
Design Systems Inc. "India not only has
no EDA company, but that phenomenon is
true of the entire IT industry in India."
Still, Ahuja said, "It is interesting
to note that in the U.S., many small EDA
startups have been started by executives
of Indian origin."
Given that they possess large cash
reserves, the larger software companies
in India could afford to invest in
building an EDA tool if they so chose.
Yet they are unlikely to do so, observers
said. They are extremely profitable
providing software development services
around the world and would likely see
building an EDA tool as a risky and
unnecessary business venture, said
industry watchers here. Nor would they
have the necessary experience to go after
the EDA business.
"EDA tools are specialized software
tools, used by only a handful of expert
electronic design engineers. These tools
are complex and require significant
presales and post-sales support and
training," said Jyotirmoy Daw, managing
director of Mentor Graphics (Noida) Pvt.
Ltd. "The users and buyers of EDA tools
are mostly in the United States, followed
by Europe and Japan. The history of EDA
shows that market share of any EDA tool
is dominated by two or three large
companies. Having said that, there is
always an opportunity for EDA startups in
India if the startup can solve a new
problem not solved by others."
"Since you need the architects, the
funding, the experience and well-known
names at the top levels, you need to be
near the U.S. Here, there is a lack of
domain knowledge in 'emerging' areas,"
said Anand Anandkumar, managing director
at Magma Design Automation India Pvt.
Ltd. It is possible that the scenario may
change and that an EDA industry could
emerge here, Anandkumar said. But "If you
ask whether I would start an EDA firm in
India, my answer will be no."
D. Krishna Kumar, general manager of
Sequence Design (India) Pvt. Ltd.,
pointed out that India has never had any
big customer requirements for EDA tools,
nor any base of manufacturing from which
innovation might spring. "Since
multinational companies in the EDA domain
set up their research and development
centers in India, it was easy for them to
provide the technology, training and
facilities," he said. "Compared to this,
without any background, Indian companies
face a lot of problems in training,
finding suitable people and availability
of tools, as they are very costly."
Also, the Indian market for design
tools is tiny compared with other world
markets such as North America, Europe,
Asia-Pacific and Japan. To survive and
sustain itself, an Indian companies are
- K.C. Krishnadas