Arm shakes up the IP game

Arm has announced the launch of its flexible licensing model to allow customers to access to its IP without breaking their bank accounts.

It’s a model which has the potential to shift traditional dynamics in the segment as Arm aims to shift its customer base outside its traditional mobile market. With the connected era promising a ridiculous number of devices there are riches available for those who can prove their IP is suitable for this varied plethora. This seems to be the strategy in mind.

In short, customers pay a ‘modest’ fee upfront and then negotiate contracts when the team is moving towards production phase.

“By converging unlimited design access with no up-front licensing commitment, we are empowering existing partners and new market players to address new growth opportunities in IoT, machine learning, self-driving cars and 5G,” said Rene Haas, President of the Intellectual Property Group at Arm.

As it stands, Arm works like many other IP businesses. Customers pay the full-amount for access to licences and agree royalty payments, depending on the potential scale of the devices, upfront. Although this is the traditional way in which business is conducted, it is risky as it is an expenditure irrelevant as to whether the Arm IP is used in production or not.

The Arm Flexible Access model effectively delays payment. SoC design teams will be able to engage Arm and its IP before any licences or royalty payments are agreed. In short, customers will only pay for what they use when they get to production, paying only a trial fee at the beginning of the process.

Arm has said the Flexible Access portfolio includes all the essential Intellectual Property (IP) and tools needed for an SoC design. Prototypes can be designed and evaluated in numerous ways before any significant financial commitments are made. Theoretically, it should offer customers more opportunity to experiment without the fear of irreversibly-expensive mistakes or assumptions.

There are now three ways to work with Arm:

“We are working on several products to address AI use cases in automotive, IoT gateways and edge computing,” said Nagendra Nagaraja, CEO of AlphaICs, an AI start-up. “For this, we need access to a wide range of IP and the ability to rapidly evaluate, prototype and design. Arm’s Flexible Access model gives us that agile approach to IP for the first time.”

This is where the model can be incredibly beneficial for both the ecosystem and Arm. Companies like AlphaICs would have struggled financially to scale under the traditional IP model, it is a 50-strong start-up exploring an embryonic segment of the technology industry. In paying a modest amount up-front, AlphaICs has the opportunity to prove the business case before making any significant financial commitments.

This approach obviously helps the start-ups who are exploring unproven ideas, but it also gains Arm traction in currently unprofitable segments which could scale extraordinarily quickly. AlphaICs is aiming to create the next-generation of AI compute for autonomous edge and data centre applications, not a traditional stomping ground of Arm, but there are certainly growth opportunities.