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Free software!

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Smart semiconductor companies have long understood that offering great software is one of the best ways to set their products apart from the competition. But what’s surprising is how much software the industry literally gives away. Chip makers—eager to convince customers to design their chips into new products—are providing millions of dollars’ worth of free or steeply discounted software each year.

National Semiconductor , which has one of the industry’s more ambitious free software programs, has spent the past five years developing and improving a suite of design tools that is available through its Web site. Its Webench software allows users to select parts; design them into power supplies and wireless and microcontroller-based systems; validate the designs with a variety of simulations; and in some cases, have actual prototypes delivered the next day. More than 100,000 people have registered to participate thus far, using the company’s online design tools to create an average of 20,000 designs per month.

Phil Gibson, National’s vice president of corporate marketing, says Webench tools make it easier for customers to design in higher-performance analogue capabilities—such as longer battery life and better audio—and to complete their designs faster. And by familiarising thousands of potential customers with its components and how to use them, the company hopes to improve the chances that they’ll choose National chips for future designs. “It really is a good way to increase customer loyalty,” says Gibson.

Gary Smith, chief EDA analyst for research firm Gartner Dataquest, cautions, however, that software giveaways are “not necessarily a free lunch”. In most cases, companies’ free tools work only with their own chips. “They’re locking the users into their silicon,” says Smith.

Chip companies concede that point but note that the free tools are valuable nonetheless. “We’re not in this for charity - we’re there for customers, to make them productive and get them into production faster,” says Gibson.

Hurting profitability

Not surprisingly, National’s competitors have software strategies of their own. Analog Devices Inc. (ADI), for instance, has created several “virtual evaluation” tools, some of them in partnership with software maker National Instruments, that allow prospects to evaluate ADI’s increasingly complex chips and test whether they will work in their designs.

One of ADI’s latest offerings is a parametric evaluation and troubleshooting tool for assessing the performance of operational amplifiers. Users can quickly configure a theoretical circuit, apply a signal and confirm that it meets the desired specifications. “It gives them confidence that they’ve selected the right part,” says Dave Kress, ADI’s director of applications engineering.

Dan McKay, director of software for microcontroller maker Zilog (distributed by Soanar), says free software is key to his company’s success in infrared remote-control chips, with more than 40 million chips shipped during 2004. “Our software is fundamental to that business,” he says. “Even though we think we have the best silicon, we wouldn’t be where we are without having the software to go with it.”

Zilog gives customers the tools they need for developing and customising remote controls used in TVs and other consumer electronics products. Besides complete source code, which can be modified to add new features, the company also offers access to its huge database of key codes needed to test more than 12,000 existing remote-control devices.

Some of the industry’s most generous freebies come from field-programmable gate array (FPGA) companies such as Xilinx and Altera, which routinely give away elaborate suites of downloadable software for design entry, simulation, synthesis and even place-and-route.

Gartner Dataquest’s Smith concedes that for much of the chip industry, providing free software is a relatively modest expense that can create competitive advantages. He contends, though, that the FPGA sector’s excessive generosity is hurting its profitability while deterring EDA company investment in the sector.

“I’ve been saying for 10 years that somebody’s got to take a look at the bottom line there,” he says. Thus far, no company wants to be the first to begin charging customers the true cost of the software they’ve grown accustomed to. Yet it’s unclear how long the industry can afford to continue the practice. Says Smith, “Somebody’s got to blink.”

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