Perpetual or Subscription EDA Tool Licenses? That is the Question

Estimated reading time: 8 minutes

Recently, I joined Altium to do something I am truly passionate about—work with PCB designers and deploy resources to support their important work. I’ve been working with designers for over two decades as a PCB fabricator and EMS service provider. In my view, these folks are the unsung heroes of global technology.

My new title is director of community engagement. It sounds straightforward, right? When I arrived at Altium headquarters on Day 1, I was greeted by a flurry of activity. My new colleagues were launching solutions to support an angry mob of Eagle software users. Autodesk acquired CadSoft, creators of the Eagle design tool, in the summer of 2016, and Eagle users had just been informed that their software was moving from perpetual to subscription-based licenses.

Online forums were rife with spitting-mad designers who had bought Eagle software outright many years before, and now felt they were being held hostage at subscription gunpoint. The meaning and significance of all of this was lost on me, since I was the newbie that hailed from the hardware side of the tracks.

So, I started learning all I could about PCB design software licensing. I wondered about the pros and cons of perpetual vs. subscription licenses. I wanted to learn firsthand from PCB designers what kind of benefits they received and challenges they faced as a result of how EDA companies offered design tools. I reached out to a variety of sources to get a broad slice of insight into this evolving issue, and thus began my trip down the EDA software rabbit hole.

EDA Tool Management for Global OEMs

Stephen Chavez is the lead electrical designer at UTC Aerospace Systems. Chavez is based in the Phoenix area and oversees a group of designers there, as well as a sizable group in Bangalore, India. Recently, we spoke by phone and Chavez took the time to give me a general idea of how a global OEM like UTAS acquires EDA software tools.

First of all, at UTAS, the decisions are made at the corporate level where they have oversight of design software for all business groups. They have the means to remotely monitor hours of seat usage by each division. Tool administrators use these metrics, along with direct feedback from each business group, to negotiate with EDA software tool suppliers to build a customized, albeit massive, solutions.

In the case of UTAS, they primarily use Mentor Graphics software with perpetual licenses. However, EDA tools such as Altium, Cadence Design Systems, and others are used as well. Engineering managers make recommendations to corporate as to which tools they prefer, which varies across UTAS. All tools are evaluated by corporate and tool administrators before decisions are made.

Mentor (or the chosen supplier) works with UTAS to bundle all the perpetual licenses they need along with critical maintenance contracts that provide timely updates and all the support needed. The FAE (field applications engineer) is critically important to providing big OEMs the breadth of technical support and training they need around the globe. Chavez said that the wide variety of offerings by EDA software developers makes this a very complex and time-intensive process.

When asked to identify the biggest pain-point in regards to EDA tool licensing, Chavez said the logistics of tool reconfiguration and transition each year is a huge undertaking, mostly due to the scale of impact of the global giant. There is wide-scale preemptive beta testing beforehand and consideration of multiple time zones must be considered. Virtual tests are done before the official roll-out. Chavez reports the whole process can take a month or more before the updated licenses and software are implemented. However, once released, the updates are made around the world within an hour.

The Service Bureau: Playing the Shell Game

Scott Miller is the COO of Freedom CAD, possibly the largest privately held design service bureau in the country. Freedom CAD is based in Nashua, New Hampshire, but their designers are based throughout the US. Scott McCurdy is the director of sales and marketing. McCurdy is based in southern California and is also the president of the largest IPC Designers Council chapter in the country. I had the pleasure to learn from these two industry veterans about how a design service bureau acquires and uses various EDA software platforms.

Miller explained that they use Cadence, Mentor, and Altium software. The tool set is generally determined by their customers who specify the platform based on their internal tool set, making later changes and re-spins seamless. Freedom CAD uses both perpetual and subscription licenses. They use the “EDA card” offered by Cadence, which helps them estimate their (large) annual spend that allows them to bundle various tools and qualifies them for a volume discount due to multiple seats and feature usage including associated maintenance fees.

Miller said that the unavoidable ebb and flow of specific tool demand requires high flexibility, and the EDA card helps them get what they need while avoiding costly idle seats. With Mentor, Freedom CAD tends to pay a premium for shorter-term licenses. They stagger the start-up and renewal dates so they’re never caught short or without an Xpedition seat. Altium offers an all-inclusive lower cost tool in both a perpetual and short-term license, which enables the flexibility needed by a design bureau. Freedom CAD reports growing demand for Cadence and Altium within their customer base in the last few years. In short, it’s a shell game of supply and demand with tool licenses that must be tracked fastidiously. They maintain a sophisticated system of checks and balances to manage subscriptions, maintenance and purchase of all their tools. All these shifting pieces must be kept in check to keep the Freedom CAD team equipped and responsive to their customers.

Small but Mighty: High-Performance Designs on a Budget

My longtime friend and mentor, Michael Ingham of Spectrum Integrity, designs some very sophisticated, lightning-fast PCBs. Spectrum Integrity is a full-service engineering design firm that focuses on advanced RF, high-speed and semiconductor test applications. I’ve known for years that Michael was a big fan of Altium Designer, but I also know he must use multiple tools to address the wide variety of their customers’ needs. I asked Ingham about how Spectrum acquires their software tools and what considerations they have when they do so:

Warner: How do you make decisions about which software to acquire?

Ingham: There are three primary areas of focus when evaluating new software: capability, client requirement, and cost. Our niche is in high-performance designs, such as ultra-high-speed digital >28Gbps, RF/microwave up to 110 GHz, and wire bond chip-on-board. Some platforms work better than others for a given application, and they must first be capable of these very specific, and sometimes unusual, needs. Our clients can also require a specific platform to integrate with their existing product standards, which leads to the third focus of cost. We must always evaluate the cost/benefit of adding software to our toolkit. There are times when we realize immediate benefits and the decision is simple, but more often the client requirement, capability of design features, or long-term use is uncertain and the large initial licensing cost becomes the influence prohibiting acquisition.

Warner: Do you prefer subscription or perpetual licensing?

Ingham: Subscription, purely for minimizing the large cash outlays required with perpetual licensing.  Optimally, a subscription-based license that offered credits toward a perpetual license would be nice to see.

Warner: What is your biggest challenge or pain point in regards to EDA tool licensing?

Ingham: The large initial cash outlays can be difficult. Procuring a new tool is generally at the request of a customer who may, or may not, continue to have this requirement. Also, server-based licenses, while convenient for rotating licenses between multiple engineers, have not always been easy to implement and have required additional support.

Warner: Do your customers drive your tool selection, or do you have autonomy to choose the platform?

Ingham: We have expertise in several top-tier platforms, with preferences about which tool to use based on the project requirements. We have pushed our tools to their limits and know which ones can excel in each requirement. For example, designs requiring high layer counts, sophisticated RF geometries, or extensive matched length lines will limit which platforms to use. Ultimately, if our customer requires a specific platform, that is what we will use, although due to our experience and expertise many clients desire us to use the best tool for the given requirements.

Warner: If you could give one piece of advice to EDA companies, what would it be?

Ingham: Offer reasonable pricing for short-term needs, and a path to convert to a perpetual license. A superior product will be added to our standard toolkit, but it is not likely to be tested if it costs thousands to acquire even a short-term license.

Warner: Thanks for your time, Michael.

Ingham: Thank you, Judy.

Licensing Lessons Learned

So, should a company rent (subscription) or buy (perpetual) EDA software? After talking with these four design professionals, I would say, “It all depends!” I suppose that’s why EDA software developers have given designers so many options—like a giant buffet with countless customizable solutions. Then again—I am not a buffet lover, but perhaps you are. The good news is that our industry is replete with great EDA tools, and it is not a one-size fits all world.

Bottom line, take your time and be diligent in doing your homework. Only then will you find the right PCB design software that will fit you perfectly, like a well-tailored suit.

Judy Warner is the director of community engagement for Altium.