Functional Verification and EDA "Startups"

A few weeks before DAC, I started working on a blog post about the number of small EDA companies that remain in the functional verification space despite the tough economic times. My interest in completing the entry and publishing on this topic was increased by the number of small companies that I saw at DAC for the fifth, seventh, even tenth year in a row.

I used to observe that in 3-4 years most EDA startups were acquired, public, or out of business. This is no longer the case; big companies don't dole out cash for acquisitions the way they used to and IPOs are few and far between. So small companies have learned to align their spending with their sales and minimal new investments to stay in business. 

The result is that the EDA market is filled with dozens of small companies (not really "startups" anymore) that have been around for more than five years. Sure, some are "zombie" companies surviving with tiny staffs serving the needs of a few loyal customers. But others are holding their own and even growing, and most of these are involved in functional verification.

This observation is aligned with my views that functional verification is more important than ever and there is no silver bullet for verification. A combination of advanced functional verification techniques is required, all linked by the OVM, and there's plenty of room for new ideas and innovation, both within Cadence and in the industry as a whole.