A moment later, it was gone. The mark – their goal for their next leg of the race – had unceremoniously sunk into the sea, leaving no trace of its previous location. Spinning on his heels, the tactician saw that the previous mark had also disappeared into the deep green water. The entire race course had effectively suddenly vanished. He looked at his skipper and the other members of their yacht’s “brain trust” in confusion.
The entire racing fleet was now adrift at top speed. In a matter of seconds, what had been a tightly fought battle for supremacy on the race course became a seemingly random flotilla of overpowered racing hulls plowing aimlessly through the open ocean. Deprived of the metrics and checkpoints that allowed the crews to chart their course, plot their strategies, monitor their progress, and ultimately measure their success, they all suddenly felt devoid of purpose.
This week, Dataquest announced that they were closing their CAD group – the one that has measured the market shares of electronic design automation (EDA) companies for most of the existence of EDA as an industry. For as long as we can remember, the annual Dataquest market share numbers have served as the marks in the hard-fought regatta of the design tool industry. During the course of each year, anything could happen – new products were released, licensing models were adjusted, sales channels experimented with account strategies and pricing. At year’s end, however, the Dataquest numbers gave an unambiguous answer. Your product was now number two in the market with 22% share, only three percentage points behind the leader. Your hard work had paid off.
With the exit of Dataquest from the business, EDA is left adrift. Sure, nobody will go out of business any more than the racing yachts would suddenly sink if the racing committee abruptly pulled out of the event. Like the crews of those boats, however, the companies will have at least temporarily lost a sense of direction in their competitive spirit. After all, if you work all year, then can’t tell whether you gained or lost market share, what really is the point of it all?
“This is a huge loss for the industry,” says Merlyn Brunken, Director of Marketing Intelligence at Mentor Graphics. “Dataquest was the only company that tracked market share and the only company that gave forecasts. They also had a long track record allowing the monitoring of trends. With their exiting the business, even if somebody new steps up to do the analysis, we’re essentially starting over with the trend data.”
While not everyone in the industry was thrilled with the way Dataquest monitored the industry (in the same way that not everyone is thrilled with the officiating at a typical sporting event), Dataquest was still the primary barometer for the design automation industry. PowerPoint pie charts around the world will now lose the familiar “* source – Dataquest” authentication of market data claims. Even we have jumped on the DQ-bashing bandwagon at times [http://www.fpgajournal.com/articles/windmills.htm], but clearly, having late market share data is better than having no market share data at all.
The EDA Consortium “EDAC,” representing about 100 EDA companies, provides some industry data through its Market Statistics Service (MSS). There are also other services that monitor, analyze, and report on the design automation business, but none with Dataquest’s combination of market share splits, historical trend information, and market forecasting for EDA sub-segments.
Clearly, market share numbers matter much more to producers than to consumers. After all, for the products you use most, do you know what their market share is? Will you dance only with gorillas? Do you use only the number one product from any given segment? Or are you a contrarian, watching the ratings carefully and always picking something with less than 20% market share? Probably, with the exception of a few key offerings (most engineers have some idea of the market penetration of various operating systems, and few ASIC designers don’t know that Synopsys has the most widely used RTL synthesis software), you go through life blissfully unaware of the percentage point splits of the products we depend upon.
In one sense, however, the design automation business could look for new direction in the vacuum left by Dataquest’s departure. If we don our rose-colored analyst spectacles, we might see that it is at least possible that chasing market share of specific segments could lead us off the optimal path. When the metrics you monitor are not completely aligned with your true goals, you can end up chasing the metric rather than your vision. If our yacht race had been measured, perhaps, on the best boat-speed/ sail-area ratio rather than on which ship crossed the finish line first, boat design and race tactics would change considerably. If Dataquest miscategorizes your product and you look like you’re competing against products that are actually in different markets than yours, your own management could cancel or de-emphasize your product based on the false assumption that you’re losing the market share battle, even at a time when you may, in reality, be winning.
Forecasts, too, are only as valuable as their accuracy. While Dataquest was bold enough to give us predicted market growth numbers, even for new, emerging segments where there was little data to go on, their predictions were often wildly inaccurate. The fault in following inaccurate forecasts, however, generally lies in the follower rather than the forecaster. Engineers generally understand the principle of accounting for the accuracy and precision of your information sources in your calculations. It is important that marketers and executives understand that concept as well.
More than market share, we will miss the color that Dataquest brought to the EDA landscape. If you think that market measurement and forecasting is a dry, soulless business, you need only attend one of Gary Smith’s famous DAC-opening presentations to realize that a great deal of hunch, humanity, and humor goes into the process of predicting the fate of fickle technological advances. Hopefully, Gary’s insightful analysis and dry sense of humor will not be lost to the industry, but will now come from a slightly different direction. We can only hope that the coming weeks will bear some encouraging news, even without the possibility of percentage points.