Electronics companies whose products can meet the return on investment (ROI) criteria set down by their customers are proving to have a far better chance of surviving this economic downturn and navigating in uncertain waters.

The Electronic Design Automation (EDA) industry, in general, has found that electronics companies, which must justify the purchase of the industry's software and hardware products, do so according to their affordability, good value and ROI.

That's not to say we're skimping on functionality or product features. Instead, there's just no room for lavish events, given today's economy and restraint, which is indeed in contrast to the go-go years of the Internet.

A good example is the traditional high-end emulation market, which has had a dramatic drop in sales in the last year. Most high-end emulation providers, independent companies or large EDA companies' emulation divisions are surviving on maintenance contracts, despite efforts to promote the few purchases of new systems.

Consequently, we're learning that this market sector can't operate as usual. A business model of restraint, where affordability and the use of the best available technology, combined with new architectural ideas and competent development efforts, is fundamental.

One important part of innovation at our company was, for example, to take a new approach that minimizes the effort needed to port software from one product generation to another. This enables a company like EVE to deliver new products that meet the needs and constraints of its customers.

ROI has flipped a former rule-of-thumb formula long held by the EDA community. Traditionally, EDA software and hardware purchases were on a six-month, predictable course, where 80 percent of the effort was spent conducting evaluations and benchmarks of the products. The last 20 percent was in the final decision making, and then the purchase order went through the purchasing process. In today's new world economy, there's no sense of urgency. Evaluations are a mere 20 percent of the time spent on EDA tool purchases, while the decision making and purchasing process has shot up to 80 percent.

ROI has also forced companies to think more carefully about product pricing, which in turn forces them to be more careful with their yearly budgeting. We have, for example, set up a remote demo center where prospects can run a demo of the product from their site, and even from home.