The EDA E-Commerce Revolution: The Time Is Now - Model Technology's services - Company Business and Marketing

I find it ironic that the electronic design automation (EDA) industry, which prides itself on being the technology engine that drives the worldwide electronics boom, remains on the lagging edge of technology when it comes to distributing products. On one hand, we enable the deep sub-micron revolution that fuels the global economy. On the other hand, however, our distribution strategies remain archaic.

The rest of the business world has moved rapidly toward more efficient distribution methods, most notably electronic commerce. Last year, consumers bought more than $7 billion worth of products online. Business-to-business sales were six times that much.

Today, we can purchase everything from books to automobiles online. But not EDA software tools. For some reason, our industry has been trapped in a distribution time warp, unable to free itself. But this January, Model Technology Inc., a subsidiary of Mentor Graphics Corporation, broke free of the time warp and began offering its line of ModelSim simulation products through its online store.

We decided to sell via E-commerce for three reasons. First, to make it more convenient for our existing customers to purchase our tools. Second, to make our products and underlying technology available to a wider range of electronic designers, not just those at the top level of the design spectrum. Finally, because we could. After firmly establishing the value of our products in the marketplace, Model Technology does not require an extensive sales cycle.

The Internet as a sales tool can no longer be ignored. It must be recognized as an important addition to the traditional distribution network. As the EDA industry matures, more products will lend themselves to a low cost distribution model. The time to exploit the benefits of online sales is now. A true multi-tiered distribution network must include a combination of traditional sales and relationship building, distributors and affiliates, telesales and online sales. In the case of Model Technology, selling online makes it possible for us to offer our simulation technology to the full range of ASIC and FPGA hardware description language designers, regardless of their design complexities or price sensitivities.

Typically, large EDA vendors devote their sales forces to selling only to the largest accounts, making it cost prohibitive to handle small orders profitably. The next level of customer is either ignored, or perhaps serviced by independent distributors. By adding online sales to our multi-tiered distribution network, Model Technology can take its sophisticated technology used in the most complex environments, and sell it to companies working in simpler design environments where only one seat is necessary, and at a price point that is extremely aggressive.

E-commerce helps EDA vendors reduce order cycle times and order processing costs. They can process more transactions faster and reduce errors. The online delivery method is fast, efficient, safe and available to all. That's why the time is now for EDA vendors to do themselves and their customers the favor of offering their products online.