IBM/Telelogic Acquisition Update: Part 3

What Happened?

On March 27th, IBM announced through Watchtower AB, its indirect wholly-owned subsidiary, that 96.9% of Telelogic shareholders, corresponding to both issued and outstanding shares, have accepted the public cash offering. Watchtower AB also announced that it has extended the acceptance period until 17.00 CET on April 3, 2008 for those shareholders who have not yet accepted the offer.

VDC’s View

It is reasonable to expect that a final announcement on the acquisition will take place within the next week or so.

Stay tuned as VDC looks to comment on any additional news.

Synopsys to Acquire Synplicity

On Thursday of last week Synplicity announced that it had signed an agreement to be acquired by Synopsys for $227 million.

Kevin Morris wrote an interesting article about the merger, and its impact on engineers.

Virtutech Announces Standards Inititive for Virtualized Software Development

Just a week after Imperas's announcement regarding its new OVP Iniative (see our previous post), leading virtual software prototyping/simulation vendor Virtutech announced its own initiative to "accelerate the creation of standards for the VSD [Virtual Software Development] industry."

The company citied its involvement with Power.org and new relationships in established standards bodies including Eclipse, OSCI, the Spirit Consortium, and GreenSocs. Virtutech hopes to accomplish four goals in pursuing the iniative, including the "establishment of virtual platforms and simulation as the standard software development process for electronic systems, definition of APIs (application programming interfaces) and ABIs (application binary interfaces) to support interoperability of models from multiple vendors, creation of libraries and methodologies to support reuse across system development tasks, [and] adoption and extension of existing standards and best practices."

Enea Announces 3.0 Version of Element Middleware

What Happened?

This week Enea announced a major release of its Element middleware product for carrier grade communications systems. The 3.0 version of Element includes a number of advancements including full support for the SA Forum’s Availability Management Framework (AMF) which is a mature piece of the Application Interface Specification (AIS).

Element 3.0 also includes an in service upgrade feature that allows service providers to update software on running network elements with no hit to the service availability of the system. This type of functionality has typically been implemented in house at great cost – Enea is offering this high level of functionality within the 3.0 release.

Also in this release, Enea is integrating with its own dSPEED Platform which is a management, control and debug layer for DSP farms. Enea now offers Element services on the DSPs through an agent controlled by a host on a control processor. This approach offers control and data plane support with the same programming model.

VDC’s View

Commercial high availability middleware has existed for some time; however market interest is increasing now that ATCA has matured and hardware building blocks are available.

Telecommunication Equipment Manufacturers (TEMs) are facing a number of challenges including disruptive technologies, increased global competition, and demanding customers. To meet these challenges TEMs are looking to new solutions that rely on commercial hardware and software building blocks including ATCA, Linux, HA middleware and protocols. Integrated through standard interfaces – these components offer an opportunity for reducing development time, lowering costs, narrowing risk, and fueling innovative applications through established platforms.

The real value to the TEMs is in integrated, application ready platforms – ATCA provides the hardware piece, but you can’t get there without the software.

Imperas Forms the OVP (Open Virtual Platform) Initiative

What Happened?

This week Imperas announced the release of its Open Virtual Platforms to “establish a common, open standard solution for developers to quickly and inexpensively simulate embedded software on system-on-chip (SoC) designs.”

Through the OVP Initiative, Imperas will provide what it claims to represent $4 million worth of its own R&D effort, including:

• OVPmodels - Open source model libraries of processors, components, peripherals, and templates which others are free to use, edit/update, and copy
• OVP APIs - APIs for developing models and verification infrastructure provided with no attached licensing costs
• OVPsim – A free reference simulator delivered as an executable solution (with limits on the source code availability and licensing terms)

Imperas has solicited the participation of the industry and has already gathered an impressive group of market leaders to join the initiative including IP suppliers such as MIPS, Tensilica, Denali, and notable ESL/EDA players like EVE, Forte, Carbon Design Systems, Calypto, CriticalBlue, and others. The company is still working out the details, but currently plans to manage the initiative and host the OVP community forum itself going forward.

Imperas believes that by opening up its virtual platform technology and simulation offering to the market at large, it may be possible to drive industry-standard practices around virtual platform development and help guide the market towards improved methods of software development/system simulation on complex hardware architectures. The company anticipates that by moving the market forward in this area, it can then build its business around software verification technologies, multi-core development, and other solutions complimentary to system simulation and virtual platforms. Expect more announcements from Imperas around their products at next month’s Multicore Expo.

VDC’s View

Imperas has certainly been coy about its overall product direction prior to this point, providing only small clues about its products and where it might play in terms of the overall ESL and multi-core software development space. This announcement provides a clearer sense of how the company will approach the market going forward.

There is no question that if the industry is able to agree on a set of common set of standards for building virtual platforms (what VDC has typically referred to as the virtual system prototyping/simulation market), market participants would be in a better position to collaborate with one other, leverage existing designs, and raise the overall level of productivity in creating virtual prototypes (something that is clearly needed for virtual platform methodologies to be successful in the long run). This is something that established virtual platform vendors such as Virtutech, VaST, Synopsys, CoWare, and ARM have been driving towards for some time now (though their vision of how this is to evolve is certainly different from Imperas’s particular approach in this case).

An open source model is an interesting concept here, and the early list of participants is encouraging, especially at the semiconductor IP level. Open source software has certainly changed the landscape in numerous software markets to date, and in VDC’s opinion a move toward this type of a model has the potential to alter the dynamics of the current market. The extent to which Imperas creates an environment that fits the real needs of the broader community and shares in the development and ownership of the technology is likely a key factor to its long term appeal and success. A critical next step will be to bring more parties to the table, including big EDA tools vendors, other semi IP suppliers, and the semiconductor suppliers themselves. VDC has noted a continued investment by IC suppliers in investing in product enablement through virtual platform technologies.

Imperas’s view that an established virtual platform market is the bridge to better multi-core software development and verification is likely in line with the views of many other market participants. In fact, if the company is able to propel greater industry standardization around virtual platform design and simulation, Imperas should expect increasing competition from bigger EDA companies at the software verification level.

While it is far too early to tell what impact this will have on the market, it will be certainly be interesting to gauge the reaction of other virtual platform tools providers and the rest of the market.

Richard Goering also wrote an interesting piece on this announcement earlier this week.

IBM/Telelogic Acquisition Update: Part 2

What Happened?

Ending the in-depth investigation that began on October 3, 2007, the European Union’s Competition Commission announced regulatory approval for the proposed IBM/Telelogic deal on March 5. According to the EU’s Competition Commissioner, Neelie Kroes, "IBM's and Telelogic's modeling and requirements management products are not close substitutes, as they generally address different types of customers and different needs."

Although the deal has finally received regulatory approval, the formal merger will not conclude until at least well into the second quarter of this year. According to IBM, “Provided that Watchtower announces that the conditions of the Offer have been satisfied or waived on March 27, 2008, settlement is expected to commence approximately one week thereafter.” As a result, not only will this acquisition’s ultimate impact on the market remain unknown for some time, but IBM will delay any potential synergies or other resulting competitive advantages planned for 2007.

VDC’s View

Based on VDC’s research, the proposed merger will turn IBM/Rational’s and Telelogic/I-Logix’s market leadership in the space into a singular presence with a share of over 80% of the worldwide revenues from embedded software modeling tools. It should also be noted that these companies’ combined share of the market has remained relatively constant over the past few years, except that it was previously distributed among three vendors prior to Telelogic’s acquisition of I-Logix in March 2006.

Beyond the embedded software modeling tools space, VDC also expects that a similar market share advantages exist within the requirements management tool market, especially in regards to key industries such as military/aerospace and automotive. Although VDC believes that the success of the Rhapsody product line has fueled much of Telelogic’s recent growth, Telelogic’s Application Lifecycle Management (ALM) solutions, including the DOORS requirements management tool, remain the leading source of the company’s business and were most likely one of this acquisition’s primary catalysts.

While this acquisition may leave the market without the parity that was present a few years ago, the uncertainty surrounding the future direction and embedded focus of the combined company and its tools may cause current and potential clients as well as competitors to revaluate product decisions and strategies, thus generating ample new opportunities within the market. In addition, the growing functionality and acceptance of low cost (e.g. Sparx Systems) modeling tools should continue to present adequate obstacles to any overly monopolistic behavior. As a result, this acquisition’s ultimate impact on the market will not be known for some time and raises some key questions:

• Will the sum of the parts prove to be greater than the whole?
• Will there be another “Rational Effect”?
• What long-term impact will this have on IBM's and Telelogic's customers and strategic partners?
• What other technologies might IBM look to acquire next to complement their growing embedded solution tool chain?
• Will any of IBM’s other competitors in the ALM or PLM tools market look to acquire comparable software modeling technologies?

IBM/Telelogic Acquisition Update: Part 1

On March 5th, the European Union’s Competition Commission announced regulatory approval for the proposed IBM/Telelogic deal.

Stay tuned as VDC looks to comment further on this news.