https://ipo.blog.gov.uk/2015/05/15/smart-arm/

Smart ARM

For those of us still struggling, like disorientated turtles across the starlit beach of economic recovery, a glance through British technology giant ARM Holding’s annual reports makes empowering reading. The Cambridge based software giant really can justify its claim to be ‘enabling innovation everywhere’.

Small Acorns

From small beginnings the team, who began work under the name Acorn have created, in ARM, a new IP-based business model. Now, Chief Executive Simon Segars, an original team member, is poised to take on an even bigger challenge: to reconfigure the world.

IP Licenses

ARM’s business model is based on the licensing of IP rights. Its technology is built into the chips that power the world’s computers and smart phones. ARM doesn’t make anything - but it thinks a lot and this is reflected in its balance sheet. ARM’s most significant assets are to be found in its intellectual property and the 2800 plus people it employs. ARM’s licensing strategy, as the strap line said, is about enabling others.

Worldwide web

Without wishing to extend a metaphor beyond its limits: ARM’s reach is long. Today around 75% of the world’s population use IT licensed from ARM. More than 50 billion ARM-based chips have been created. ARM’s partners are shipping a further 2.5 billion every quarter. Last year ARM issued 121 licenses and, to date, it has made over 1000 IP licensing deals worldwide.

Segars says:

Our vision is to enable everyone to use technology, to innovate and create new products and business models. From students to start-ups, to thought-leading companies, we are enabling people and devices to connect in ways that have never been possible before.

The Internet of Things

The Internet of Things is a buzz phrase – it sounds simple. In fact it’s going to change the way we live and think. It’s going to liberate our gadgets and machines from the one component that’s bound to go wrong - us. Whilst most of us don’t yet have fridges that know what to order from the supermarket, we are becoming aware of the fact that something is going to change.
ARM estimate that by 2018 30billion chips could be required by the internet of things.
Already tax disks have disappeared in to the soft focus world of period drama. Smart systems connecting databases in Swansea with roadside cameras now read our registration plates and remind us when we need to tax up. The things don’t need us and our discs any more.

ARM’s example of the way the everyday objects of our life can be interconnected and made to work for us is much warmer. The Nest Learning Thermostat uses ARM chips to ‘learn’ the preferences and patterns of the occupant of home. With Wi-Fi capability a home owner can control the home environment remotely.

By efficiently controlling the household heating and cooling demands of millions of homes, the fat of excess energy consumption worldwide will shrink.

But the internet of things isn’t just an add-on to our own experience – it doesn’t need us at all. Most people agree that the phrase ‘internet of things’ was first coined by technological pioneer Kevin Ashton.

He makes it clear that his intention was to characterise a new generation of networked devices which can communicate, learn and act without our bothering us at all.
How the IoN manifests itself is impossible to predict – but underneath it all, a Cambridge based company, will be enabling everything.

Deep foundations

While we’re mastering the central heating system and the road tax, ARM are focussing on everything else. From healthcare to logistics, from planning to education, the interconnected world things will change the world. And ARM is at the bow wave of that change. We are used to seeing the telephone and its computer savvy offspring, the smart phone, as our portal into the digital world whilst we’re on the hoof. In the internet of things a phone is as entitled to talk as a house brick. Our smart shoes may once again supplant our smart phones as the prime vectors of communication.

The rock that supports ARM is IP. ARM's ideas and its investment rely on the globally recognised veracity of patents, designs, trade marks and copyright. The IPO and its partners throughout the world provide the platform for the enablers of Cambridge.

[Featured image by John R. Southern on Flickr. Used under Creative Commons]

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