Costello's analog automation pioneer, Barcelona, to fold

"It's a sad tale of how great technology can go wrong," said Joe Costello, Barcelona chairman and former CEO of Cadence Design Systems Inc. Costello confirmed that Barcelona, which won around $44 million in venture capital funding, is winding down its operations and seeking a buyer for its technology.

Barcelona was formed in the late 1990's by Stanford University PhDs and Silicon Valley venture capitalists. The company claimed breakthrough analog synthesis technology, and pioneered a Web-based model through which designers would access the technology on a pay-per-use basis. Customers would license Barcelona's intellectual property (IP) along with its synthesis tool, then use the tool to optimize circuits for a specific process.

Barcelona started with small circuits such as op amps, but that wasn't a big enough business for the expectations that had been set for the company, Costello noted. So Barcelona started chasing the "holy grail" of large IP blocks such as PLLs, A/D converters, and D/A converters.

The problem, Costello noted, is that those large IP blocks were very complicated to design, given the need to account for process variations. And there wasn't as much of a market as the company had hoped. "It was more or less a service and consulting type of business, and it was a niche," he said.

Last June Barcelona announced that it was swapping its IP-based model for a more conventional EDA licensing scheme. At that time, the company cut its 60-some staff roughly in half. But Costello said that the switch to an EDA model didn't really happen. Instead, he said, Barcelona started looking at ways to extend its analog compiler technology into the digital domain.

That was a promising direction, but it was clear there was no "quick hit," Costello said. So the board decided that it was time to call it quits. The Barcelona web site has been shut down, but the company's office is still open with a small crew that's in the process of winding things up and showing the technology to potential buyers.

"The morality tale," Costello said, "is that wonderful technology that can add tremendous value to the world doesn't necessarily make a giant home-run company."