September 9, 2003 - Minneapolis, MN - USA. Silicore Corporation announced today the adoption of an open source business model for semiconductor IP. According to Wade Peterson, Silicore President and CEO: "We have been studying the semiconductor market for some time now, and have concluded that the best way to create and distribute soft IP is under an open source business model. It's the same model that's used by Red Hat and other GNU/Linux distributors. Until now we've operated under a traditional software business model that's been used by companies like Microsoft and Oracle. Under that approach we viewed IP as a product, but now we see it as a service. We believe that System-on-Chip [SoC] integrators will prefer this model because it lowers costs, simplifies licensing, reduces parts obsolescence, improves security and allows them more control over their system level IP."
In a related move, Silicore released its SLC1657 microcontroller core under the GNU Lesser General Public License (LPGL). VHDL source code and documentation are now available on the Silicore website. Originally released in 1998, the SLC1657 is a complete 8-bit RISC processor solution for use on FPGA or ASIC devices. Typical applications include sensors, medical devices and consumer electronics.
According to Peterson: "As it stands today the semiconductor IP market resembles the computer industry in the early 1980's. That market was fragmented into a small number of sellers markets, with each controlled by a mainframe or minicomputer manufacturer. That meant that you had to sell your equipment or software into a niche market that was controlled by your competitor. We're seeing the same trend in System-on-Chip, only this time around the niches are controlled by the semiconductor manufacturers and tool makers...both of which are heavily investing in IP. We believe this trend is bad for the system integrators...or more accurately those who are paying for the system integration. Right now they're overpaying for their chips and IP because they have to buy everything in these closed markets. They want open, buyer's markets where sellers compete belly-to-belly on price, quality and service. It's the same reasoning that produced the desktop PC and the microcomputer bus markets like VMEbus and PCI. Those were successful because the system integrators preferred them...and that's important because they're the ones ultimately paying for everything."
For example, the VMEbus computer architecture was the first open hardware market for embedded systems. In 1981 a consortium of companies defined the technical standard and placed it into the public domain. Within a few years that marketplace attracted hundreds of hardware and software suppliers...with each vigorously competing to lower their costs and improve their quality. It also attracted many system integrators who wanted a buyer's market where they could shop for the best price, value and technology. Silicore is taking the same general approach with its WISHBONE SoC interconnection, which is an enabling technology for an open SoC market.
The concept of an open semiconductor IP market is not new. The OpenCores organization at www.opencores.org has provided an on-line IP trading system since 2000. There, soft IP is created and distributed using techniques that were pioneered by the GNU/Linux software community. Silicore has supported the OpenCores effort by donating its WISHBONE SoC interconnection standard, which is used on many of their cores. According to Peterson: "A couple of years ago we considered both the OpenCores project and the public WISHBONE to be proof-of-concept prototypes. This year  we've seen several WISHBONE chip systems come out of that effort. This is a watershed event because it means that the community is moving from its prototype stage to its deployment stage. It's proof that open IP is a viable alternative to the traditional soft IP model. The next step is to develop a GNU/Linux style marketplace for open systems IP." Peterson also said that Silicore will be releasing some of its own WISHBONE compatible cores under public licensing in the near future.
Silicore management spent considerable time researching licensing options before adopting the open source business model. "Our basic conclusion that soft semiconductor IP is just plain old software. This might be a radical notion to some, but we feel that if it looks like a duck, quacks like a duck and walks like a duck, then it probably is a duck. Software is just another word for machine instructions, and semiconductor IP is just that...instructions for FPGA and ASIC machines. That means we can borrow the licensing and business models from the GNU/Linux community for use in semiconductor IP. We don't need to reinvent any of those wheels."
The SLC1657 microcontroller core is provided as a library under the GNU Lesser General Public License (LGPL) from the Free Software Foundation, Inc. (Boston, MA). Under the LGPL, Silicore retains the copyright but allows any SoC integrator to copy, modify, reuse and distribute the core without cost. If the integrator modifies the core they are obliged to share the resulting (derivative) core under the same licensing conditions. Unlike the full GPL, the LGPL agreement is restricted only to the library, and does not extend to the whole chip system.
On the subject of licensing, Peterson added that: "Our research has shown that on-chip integrators aren't coping very well with all the different licenses in their systems. If you buy IP from five or ten companies, then you have to negotiate for five or ten licenses. That drives up the cost and lead time of the design. It also means that if they want to reuse their code in a new design they need to go back and revisit every license, which is costly and time consuming. Also, in the FPGA world we're seeing a lot of discriminatory licensing that prevents you from moving your design from one vendor to another. ASIC integrators have dealt with these problems for years, and it's one reason their development costs are so high and lead times so long. Our feeling is that open source licensing is much simpler, and much more amenable...especially to the smaller FPGA integrator with limited budgets. To keep things simple we're restricting our licenses whenever possible to those using the Open Source Definition [OSD] from the Open Software Initiative."
Cost is a big advantage to open source IP. The obvious savings are from the cores themselves, which are freely available on the web...but that's only the tip of the iceberg. Immediate access to cores and test benches saves time and money, the legal costs for licenses are lower and there are no security costs associated with dongles or password protection. Integrators also spend less time fixing bugs because they have access to the source code. Open source marketplaces like GNU/Linux are also well known for their low cost-of-entry. That removes barriers to companies on tight development budgets...especially start-ups with innovative ideas.
According to Peterson: "The biggest cost savings come from lower parts cost, code reuse and parts obsolescence. These can be pretty dramatic when you have a combination of open licensing and portable code. For one thing, it means that the system integrators can pull a reverse auction on their chip vendors. They can pick from a variety of suppliers who must compete directly on price, performance, quality and value. That one tactic can save a lot of money on production costs. That's because software under open licenses like the LGPL must be offered on a non-discriminatory basis, and can't be restricted to any particular brand of hardware. When used with portable WISHBONE systems and cores, it also means that the chip design can be moved from one device to another."
"The strategy also solves other difficult problems like parts obsolescence. Right now when a part goes obsolete you have to do a lifetime buy. Those are extremely expensive, and tie up a lot of capital. If you can move the design around then you're more apt to find newer off-the-shelf product, and so you can eliminate that expense. Essentially, it's a shelf life issue...the longer the design lasts the lower the maintenance costs."
"We are also finding that the initial development costs for WISHBONE systems and cores are lower too. That's because it's easier to reuse the code across many projects...especially when those projects have more than one chip or tool vendor." Peterson also added that: "We tend to cater to smaller companies who are operating on very tight budgets right now. Cost is everything to them."
One drawback to the open source business model is that IP providers like Silicore can't charge for their source code anymore. This eliminates a revenue stream that must be made up in other ways. According to Peterson: "The loss of code revenues really isn't that difficult for us. We're a small company, and so we've always provided a high level of service to our customers. It just means that we're shifting away from a product based business to a service based business. Our revenues are shifted from the code itself and into areas like system integration, distribution, consulting and training. In fact, these are already areas where we excel, so this change should only improve things. We're not blind to the loss of code revenues...we just believe that it's a better deal for the system integrators, and that will ultimately grow the market. In the end this will increase our revenues, and the last word on that subject has to be our own bottom_line."
Contact Information and Related links:
Bibliography of Open Source Business Model(s):
- Fink, Martin. The Business and Economics of Linux and Open Source 2003 Prentice Hall PTR. ISBN: 0-13-047677-3
- Kenwood, Carolyn A. A Business Case Study of Open Source Software. 2001 Mitre Corporation. Available from the Mitre website at: www.mitre.org (search under the paper's title).
- Red Hat, Inc. US Securities and Exchange Commission (SEC) Form 10-K Annual report dated 28 Feb, 2003. Available from the SEC website at: www.sec.gov (search for 'Red Hat' under the EDGAR database).
- Young, Robert. Giving It Away: How Red Hat Software Stumbled Across a New Economic Model and Helped Improve an Industry. Article appears in: Voices from the Open Source Revolution. 1999 O-Reilly & Associates. ISBN: 1-56592-582-3. Also available on-line at: www.press.umich.edu/jep/04-03/young.html
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