Israel, May 4, 2010

When Leveraging External IP Makes Good Sense

... and when it doesn’t

Eric SchornVice President Marketing

Processor DivisionARM

Israel, May 4, 2010

Invent Everything• Given:

– Enough expertise

– Correct design point

– Necessity to differentiate– Fragmented competition

– Ecosystem independence

– Luxurious timeframes

– Generous funding

– Compelling future roadmap

– Accepting customers

– High risk tolerance

• You should invent everything yourself

• It is not that simple...let’s dig into the detail

Israel, May 4, 2010

Invent Everything?• Given:

– Enough expertise – Expertise

– Correct design point – Functionality

– Necessity to differentiate – Standardization– Fragmented competition – Strategy

– Ecosystem independence – Ecosystem

– Luxurious timeframes – Time-to-market

– Generous funding – Cost effectiveness

– Compelling future roadmap – Roadmap

– Accepting customers – Market dynamics

– High risk tolerance – Risk

• You should invent everything yourself

• It is not that simple...let’s dig into the detail

Israel, May 4, 2010

1. Expertise

• Simplicity on the surface

• 1000’s of design decisions

• Variety of disciplines

• Cumulative experience

• Known, unknown dependencies

Israel, May 4, 2010

2. Functionality

• Technical requirements

• Tradeoffs, alternatives

• IP is a product business– Engineer once, license many– Many stakeholders, many dependencies– Feature implications

Israel, May 4, 2010

3. Standardization

• Differentiation is an imperative

• Value add

• Customer

• Standardization enables ecosystem– Other people adding value to your product

Israel, May 4, 2010

4. Strategy

• Control..why?

• Momentum

• Responsibility, accountability

• Future investment

• Credibility halo1970s

VerticalSuppliers

FullyVerticallyIntegrated

1980s

ASICVendors

SystemManufacturer

ASICVendor

1990s

FablessSemis

Design &Distribution

Manufacture

EDA

Today

IP DrivenDesign

Design

IP

EDA

Manufacture

Fab Equipment

Israel, May 4, 2010

5. Ecosystem

• Special purpose, general purpose

• Slipstream investments– Past– Future

• Facet of reuse

Israel, May 4, 2010

6. Time-to-Market

• Basic premise

• Production proven

• On the shelf

• Roadmap– Risk, reward– Engagement, opportunity– Aligned interests

Israel, May 4, 2010

7. Cost Effectiveness

• Marginal cost of IP transaction

• Perceptions, precedent, pay checks, partners

• Making movies– Rights, value

Arch.

Subscription

Implementation

Term

Single Use Design Foundry Program

Academic / Research

DesignStart

Israel, May 4, 2010

8. Roadmap

• Megatrends, market knowledge, discontinuities

• Innovation

• Investment

• Alignment

Israel, May 4, 2010

9. Market Dynamics

• Customers

• Competitors

• Suppliers, substitutes

• Switching

• Demand generation

Israel, May 4, 2010

10. Risk

• Stuff happens

• Understanding, competitive advantage

• Reducing risk elsewhere

• Partnership, relationship

Israel, May 4, 2010

Conclusion

• Good reasons to outsource IP, but not all IP

• Complex scorecard, including• Work from the end-user backwards• Place justified bets• Relationships, partnership• Collaborative differentiation

• Expertise

• Functionality

• Standardization

• Strategy

• Ecosystem

• Time-to-market

• Cost effectiveness

• Roadmap

• Market dynamics

• Risk

Israel, May 4, 2010

Thank You