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Platform Strategies in the Electronic Design Automation Industry

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Platform Strategies in the Electronic Design Automation Industry Platform Strategies in the Electronic Design Automation Industry by Arthur Low A thesis submitted to the Faculty of Graduate and Postdoctoral Affairs in partial fulfillment of the requirements for the degree of Master of Applied Science in Technology Innovation Management Carleton University Ottawa Ontario © 2013 Arthur Low The undersigned hereby recommend to The Faculty of Graduate and Postdoctoral Affairs Acceptance of the thesis Platform strategies in the electronic design automation industry by Arthur Low in partial fulfillment of the requirements for the degree of Master of Applied Science in Technology Innovation Management ________________________________________________________________ Antonio J. Bailetti, Director Institute of Technology Entrepreneurship and Commercialization ________________________________________________________________ Steven Muegge, Thesis Supervisor Carleton University September 2013 ii Abstract Platforms – architectures of related standards that allow modular substitution of complementary assets – feature prominently in technology-intensive industries. The motivations for firms to adopt a particular platform strategy and the ways in which platform strategies change over time are not fully understood. This thesis examines the platform strategies of three leading vendors in the Electronic Design Automation (EDA) industry from 1987 to 2002. It employs a two-part research design: (i) pattern-matching to operationalize and test a three-stage explanation previously developed by West (2003) to account for the evolution of platform strategies by firms in the computer industry, followed by (ii) explanation-building to account for differences between observations and the expected pattern. The pioneering EDA firm matches the expected pattern, but two other EDA firms bypass stage one to enter at stage two with open standards. All three firms later move to stage three simultaneously by adopting hybrid open source strategies. iii Acknowledgements I would like to acknowledge my sons, Connor and Jake, for their tolerance, and my thesis advisor, Dr. Steven Muegge, for his patient guidance. iv Table of Contents Abstract..............................................................................................................................iii Acknowledgements............................................................................................................iv Table of Contents................................................................................................................v List of Tables....................................................................................................................vii List of Figures.................................................................................................................viii Chapter 1 Introduction.........................................................................................................1 1.1 Objective...................................................................................................................2 1.2 Deliverables..............................................................................................................2 1.3 Relevance..................................................................................................................3 1.4 Overview of Research Method.................................................................................4 1.5 Summary of Key Findings........................................................................................4 1.6 Contribution..............................................................................................................5 1.7 Organization of this document..................................................................................7 Chapter 2 Literature Review................................................................................................9 2.1 Platform Strategies, Network Externalities, Motivations and Standards..................9 2.2 Measuring Minimum Efficient Scale and Market Power in Software Markets......13 2.3 Case Study Research Methods................................................................................15 2.3.1 Tables and Time-lines and the Data Collection Process.................................18 2.3.2 Literal Replication and Theoretical Replication............................................18 2.4 Process Study Design Methodology.......................................................................19 2.5 Summary and Key Insights of the Literature Reviewed.........................................22 Chapter 3 Research Method..............................................................................................24 3.1 Conceptual Development........................................................................................26 3.1.1 West's Explanation.........................................................................................26 3.1.2 Theoretical Constructs Drawn from West's Explanation...............................28 3.2 Develop Measures, Instruments and Test...............................................................33 3.2.1 Comparing the Computer and EDA Industry Contexts..................................33 3.2.2 Operational Variables and Measures..............................................................36 3.2.3 Pattern-matching test......................................................................................43 3.2.4 Table Shell for Data Collection......................................................................44 3.3 Data Collection.......................................................................................................46 3.3.1 Obtaining and Coding Raw Data...................................................................46 3.3.2 Adding Time and Industry Context to the Raw Data.....................................47 3.3.3 Use the Milestones to Develop a Sense-making Narrative............................48 3.3.4 Procedure to Populate the Table Shell Platform Attributes............................49 3.3.5 Procedure to Populate the Table Cell Motivations.........................................50 3.3.6 Assignment of Stages.....................................................................................51 3.4 Pattern-Matching.....................................................................................................52 3.5 Explanation-Building..............................................................................................53 3.6 Validity and Reliability...........................................................................................54 Chapter 4 Results...............................................................................................................56 v 4.1 EDA Industry Milestones........................................................................................56 4.2 Background and context.........................................................................................62 4.2.1 The Dominant Proprietary EDA Platform of Mentor Graphics.....................62 4.3 Data displays...........................................................................................................75 4.3.1 Mentor Graphics.............................................................................................79 4.3.2 Cadence Design Systems...............................................................................80 4.3.3 Synopsys........................................................................................................82 4.4 Composite Variables of the Pattern-matching Test.................................................84 4.5 Outcome of the Pattern-Matching Test...................................................................88 4.5.1 Mentor Graphics Matches the Expected Pattern............................................88 4.5.2 Cadence Design Systems and Synopsys Start in Stage 2...............................88 4.5.3 Evolution of System-level Languages Requires Stage 3 Operation..............89 Chapter 5 Explanation of Results......................................................................................90 5.1 Summary of Results of the Pattern-Matching Test.................................................90 5.2 Implications of a Successful Proprietary Stage 1 Platform Strategy......................91 5.2.1 Understanding Mentor's Proprietary 3-Plank Platform Strategy...................91 5.2.2 SDA Systems' Design Framework Bypasses Mentor's Planks.......................93 5.2.3 Cadence Consolidates the First Open EDA Platform.....................................94 5.3 Explanation for Synopsys' Platform Entry at Stage 2 (Bypassing Stage 1)............95 5.3.1 Logic Synthesis Stood Alone.........................................................................95 5.3.2 Synopsys Assimilates Lesser EDA Platform Vendors....................................95 5.4 Explanation for Movement to Open Source...........................................................96 5.5 Summary.................................................................................................................96 Chapter 6 Discussion.........................................................................................................99 6.1 Answer to the Research Question...........................................................................99 6.2 Comparison with the Literature Reviewed...........................................................101 6.2.1 Five Rules For EDA
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