The Anonymous Widower

The Star That Is ARM

I am linking to this article, which has the full speech of ARM’s CEO’s statement giving the Q4 2012 Financial Results. It is a full nine pages long, so it won’t be an easy read. This statement from the first page is very telling.

So let’s start off with the highlights for Q4. Well, Q4 was a fantastic finish to 2012. We saw our continued momentum in licensing and sold 36 licenses in the last quarter. That’s another year of over 100 licenses in the full year.

As someone, who used to put his own intellectual property on someone else’s hardware designs, this number of licences is a significant number, as obviously, the more licences the company signs, the more money it will earn.

I don’t know anything about the technicalities of what ARM does, but judging by the company’s success, it must be pretty damn good. But to me, just as it was for Metier Management Systems with Artemis, when we owned the company, the managers have got the marketing and revenue model right.

In fact, I might argue, that getting that right is more important than getting the product to a hundred percent of your design aims.  As obviously, if you are generating lots of money, it is easier to close that last gap in your designs.

So often, I’ve seen wonderful ideas fail, because their revenue model wasn’t designed well enough and doesn’t feed itself back strong enough into product development.

There is another thing that ARM and Metier had in common.  ARM is and Metier was considered a almost a crusade or political movement by those that started the companies and those that worked there. The companies that I’ve dealt with or know of, that have had that zeal are hard to come by. My short list would include Apple,  Dyson, Rolls-Royce and Zopa.  Although, there are one or two architectural or construction companies, that in a few years time, might join them. And don’t underestimate other companies in all sorts of high-tech fields, using an ARM-style of cash-flow model, based on a group of individuals having a unique idea and the determination to see it through.

I can also think of several companies that had everything and then blew it! You could say we did that with Metier by selling out and a lot of other high-tech companies have done the same. And then there’s some that have just lost their way like IBM and Automony.

February 6, 2013 - Posted by | Business, Computing, Finance, News | , , , , ,

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