December 2, 2010—Mentor Graphics has acquired most of the assets of CodeSourcery, the leading provider of open source GNU-based tool chains and services for advanced systems development. The acquisition builds on Mentor’s acquisition last year of Embedded Alley, whose runtime Linux and Android offerings moved Mentor firmly into the open-source embedded arena. The tools they’ll acquire from CodeSourcery should neatly leverage their investment in Embedded Alley and further solidify their position in the embedded space. Mark Mitchell, former CEO of CodeSourcery, will stay on as director of embedded tools for Mentor Graphics Embedded Software Division.
With Mentor’s Nucleus RTOS powering over two billion mobile handsets, Mentor is hardly a Johnny Come Lately to the embedded market. Now in addition to their proprietary RTOS they can also offer Linux, Android and leading open-source tools for developing embedded systems. With Linux having a dominant share of the embedded market and Android a rapidly increasing presence in handsets, Mentor has positioned itself to ride these fast growing markets. The Sourcery G++ GNU-based IDE has a wide following in the open source community.
Mentor isn’t the first software company with a proprietary RTOS to see the open source light. Wind River was doing very well with its VxWorks RTOS and initially spent time diss’ing Linux before deciding it made more sense to ride that horse than race against it. Today they have their own fork of Linux that integrates with their tools and databases, all of which opened up new markets for them and gave them some more credibility in the open source world. They acquired enough expertise in the process that Intel acquired them for it.
The OS business model nicely supplements the EDA industry’s standard charge-by-the-seat revenue model for tools, where you get paid once per year for a very finite number of seats. OTOH royalties on your RTOS that’s in a half billion handsets every year scales nicely. And you don’t have billions in fab costs to offset before you can make a profit.
EDA companies are all trying to find ways to grow faster than the slow pace of the EDA market. The Big Three each have different—if not that different—strategies. Synopsys continues to build a large portfolio of semiconductor IP that they guarantee will work together, easing the pain of IP integration and verification. Cadence’s EDA360 envisions an application-driven approach to system design, around which they’re reorganizing their tool offerings, not to mention their company. Mentor’s approach to faster growth is clearly to move more forcefully into the embedded space, adding a lot of open source tools to their toolkit. The extensive ecosystem and customer base that comes with Mentor’s two open-source acquisitions takes the edge off any risk.