In 1996, the IP market totaled $67.8 million, and the term IP was starting to be used, recalled Tully. The rising chip complexity was presented as a huge market opportunity for design IP, and a real buzz was created. The experience, however, proved that IP licensing is not such an easy business after all. Things took later than expected, and a lot of companies did not survive throughout the period.

Tully then switched to current considerations. "Today, IP reuse is a fundamental part of the design, licensing of standards-based IP is the rule, economy of scale is working since companies are solving the support problem and royalties are building up for processor IP vendors," commented Tully, specifying that business models are now maturing.

Looking ahead, Tully estimates that the CAGR will be 11 percent until 2010, and although it is half the growth rate recorded ten years ago it is still greater than the semiconductor market growth. Further consolidations of IP vendors will inevitably take place.

Tully also anticipates that standards-based IP will become increasingly attractive. '"We are optimistic in this field as standards-based IP is the life blood of the whole IP sector. We get new spectrum, new wireless and networking standards as well as faster processors that will all require new IP. "

Among other factors that are likely to shape the IP market, Tully said he counts on a growing interest in bigger offerings, or subsystems, and believes that design houses will capture most of that emerging sector.

Focusing on a specific element of the IP market, Tully noted that the consumer markets will present a big challenge as consumer products dominate IP usage. "Consumer markets are tough. They are very different markets because they are unpredictable and need fast time to market. How much research you conduct, you cannot predict the markets. Most of them may fail while a few others will succeed. Chips will then have to be designed with more flexible solutions."

Tully said he considers technology licensing will be a major force in the future with an estimated 63-percent growth.

In his conclusion, Tully noted that the IP market has come a long way since its first steps and is going to be far more important in the future than it was in the past. Greater trust will lower costs for buyer and seller. Reconfigurable technology will be highly valued. And, companies that manage to solve the problem of unpredictability of the market will be highly rewarded.

His last words confirmed his optimistic view: "the IP business model is here to stay."