Closing the Money Gap

Leveraging the internet to close the gap betweenproduct introduction and adoptionJim Cairns 9/17/2002

Reduced Profitfor Late ComersReduced Profitfor Late Comers

Profit for first to market

Profit for first to market

Product Availability

Time in marketTime in market

End of market windowEnd of market windowStart of market windowStart of market window

Market Peak (Time in Market Advantage)

Two years ago, adoption hinged on revenue economics

• Products that are 6 months late and on budget earn 33% less profit over 5 yrs+

• Every 4 weeks delay equals 14% loss in market share#

* Source: Current and Emerging Embedded Markets and Opportunities – ElectronicMarket Forecasters† Source: McKinsey & Co. , # Source: John Chambers , # Source: John ChambersWindRiver Systems, Inc.WindRiver Systems, Inc.

Now, cost economics loom

Development CostsDevelopment CostsNRE, Tools

& EngineeringResources

Production CostsUnit Costs, & Inventory

Management

Life Cycle CostsTime to Market &Time in Market

Either way, customer knowledge drives adoption• Development costs

– Fewer people needed on every project

• Production costs– Smaller, cheaper devices at lower unit costs

• Revenues from faster Time-to-Market• Revenues from higher performance and more

features

The internet speeds up a new critical path: “Time-to-Knowledge”

Customised internet-based Customised internet-based supportsupportCustomised internet-based Customised internet-based supportsupport

Premium levels of Premium levels of supportsupportPremium levels of Premium levels of supportsupport

Designers, silicon experts, Designers, silicon experts, and software specialistsand software specialistsDesigners, silicon experts, Designers, silicon experts, and software specialistsand software specialists

Classroom-based and e-Classroom-based and e-learninglearningClassroom-based and e-Classroom-based and e-learninglearning

Internet-enabled Services Internet-enabled “Mega-events”

Real Time-to-Market = Time-to-Market oriented solutions + reduced “Time to Knowledge” on solutions, standards, services

IBM, Wind River Systems, CMP, Synopsys, IBM, Wind River Systems, CMP, Synopsys, Cadence, MathWorks, Coware, Celoxica, Cadence, MathWorks, Coware, Celoxica, Nallatech, Zyron, Cisco keynoteNallatech, Zyron, Cisco keynote

IBM, Wind River Systems, CMP, Synopsys, IBM, Wind River Systems, CMP, Synopsys, Cadence, MathWorks, Coware, Celoxica, Cadence, MathWorks, Coware, Celoxica, Nallatech, Zyron, Cisco keynoteNallatech, Zyron, Cisco keynote

PMC Sierra, AMCC, Intel, Motorola, AMD, PMC Sierra, AMCC, Intel, Motorola, AMD, Infineon, Mindspeed, Vitesse, Compaq, Infineon, Mindspeed, Vitesse, Compaq, Mentor Graphics, RHK, Cahners, Nortel Mentor Graphics, RHK, Cahners, Nortel keynotekeynote

PMC Sierra, AMCC, Intel, Motorola, AMD, PMC Sierra, AMCC, Intel, Motorola, AMD, Infineon, Mindspeed, Vitesse, Compaq, Infineon, Mindspeed, Vitesse, Compaq, Mentor Graphics, RHK, Cahners, Nortel Mentor Graphics, RHK, Cahners, Nortel keynotekeynote

Xilinx, Bluetooth, HAVi, HomePlug, Xilinx, Bluetooth, HAVi, HomePlug, HomeRF, HiperLAN2, WLANA, Home HomeRF, HiperLAN2, WLANA, Home Phoneline Network, LonMarkPhoneline Network, LonMark

Xilinx, Bluetooth, HAVi, HomePlug, Xilinx, Bluetooth, HAVi, HomePlug, HomeRF, HiperLAN2, WLANA, Home HomeRF, HiperLAN2, WLANA, Home Phoneline Network, LonMarkPhoneline Network, LonMark

Xilinx, MathWorks, Forward ConceptsXilinx, MathWorks, Forward Concepts Xilinx, MathWorks, Forward ConceptsXilinx, MathWorks, Forward Concepts

Educating customers has always been challenging

• Cost of delivering premium training – Classrooms – dedicated facilities?– PC imaging and shipping

• Need a “burst mode” capability for introducing new courses– Instructors – certification and travel

• Shorter cycles for developing courseware• Tough obstacles to marketing fee-based training

– Tuition– Time away from projects– Travel?

Getting potential customers to try is also challenging

• How do we boost awareness of PLD advantages and users’ skills in exploiting them?

• PLD designer base is 100,000’s• Designing can be complex• Technical salespeople have limited bandwidth• High barrier to switching

– PLD competitors’ tools already installed and familiar

We need reduced costs, not just revenue dreams

• High cost of training customers with needed skills– Widespread geographies– FAEs should be selling

• High cost of technical support– 100,000’s of software users around the world– Wide range of order-quantities– Support demands usually independent of potential revenues

• Now, only investments with same-year reduction in costs make sense.

Internet Technologies Deployed Promote Educate Try Buy Support

ASP tools environment x x x xlearning management x xe-learning delivery xforums, configurators xpersonalization & alerts x x xtranslation management x xe-commerce x xevent webcasting x x

Our Experience So Far

Investment ROI so far

ASP tools environment $ Highlearning management $$$ Mede-learning delivery $$ Lowforums, configurators $$ Medpersonalization & alerts $$$ Medtranslation management $$ Highe-commerce $$$ Lowevent webcasting $$ ?

Appendix Slides

Using the Internet to grow Xilinx business

• Expanding our geographic reach • Reducing the time prospects must invest to learn,

try, and buy your products • Increasing the quality and frequency of support

you provide • Controlling or reducing costs

Challenges

• 1. What specific challenges do you face in educating customers and getting them to try and buy your products?

• 2. How do these challenges affect your business?

• 3. How do they affect your customers ability to adopt new technology and innovate?

Solutions

• 4. How have you leveraged the Internet to close the gap between product introduction and sales and adoption? What solutions have you experimented with or deployed?

• 5. What deployment challenges did you face? How did your customers respond?

• 6. What Return-on-Investment were you seeking? What benefits did you achieve?

• 7. What's next?

Xilinx Worldwide Presence

Sales, Marketing, Support

Manufacturing (Fab, Assy, Test)

R & D

Headquarters

Innovative Business Model Equals Maximum Value to Customers

First to immerse the 300MHz embedded PowerPCRe-defining the PLD Market Landscape