Monday, January 14, 2019

IoT: "SoftBank's ARM Spends Big to Meet Son's Connected World Dream"

From Bloomberg, January 11:
These days ARM Holdings Plc is expanding at such speed co-founder Mike Muller has to make a reservation before he can use his own office.

“This has become a meeting room so I have to book it when I’m here because we’ve run out of space,” said the company’s chief technology officer in an interview at ARM’s Cambridge, U.K., headquarters.
ARM has added about 2,000 employees bringing its headcount to just shy of 6,000 at the urging of Japan’s SoftBank Group Corp., which bought the company in 2016. This has cramped its existing facility, where employees are spread out among six low-slung office buildings.

ARM will soon move to a new 48-million pound ($61 million) building on the Cambridge campus -- featuring a vast 180-meter long atrium bookended by “floating” staircases, and wired with more than 1,000 kilometers of ethernet cabling. While begun before the SoftBank acquisition, it’s a headquarters that befits ARM’s newfound swagger and ambition.

“It’s quietly understated," Muller says with typical British irony, before adding, "It’s nice, it’s big."
Founded in 1990, ARM quietly grew into the U.K.’s largest listed company before SoftBank’s $32 billion takeover. It designs chips that are licensed to the world’s largest technology companies. As a result, just about every smartphone, mobile phone, and tablet runs on an ARM chip.

Now under SoftBank Chief Executive Officer Masayoshi Son, the English executives who run ARM are having to step out into the spotlight, due to Son’s ambitions for the company. Son presses ARM executives in meetings to move quickly through details of current operations and skip to long-range plans. He insists that ARM submit monthly updates to its 10-year business plan to keep it focused on the future.

ARM Chief Executive Officer Simon Segars said it means his job is to invest ‘like crazy’ as the company attempts to break into high-end computing and become central to self-driving car technology. Such efforts will have to start to pay off before spending is scaled back to prepare the company to go public again in about five years, as Son has indicated.

ARM’s new owner has also brought in a different audience. When Segars recently showed Son a new Lenovo Group Ltd. laptop built on a chip that uses ARM technology, he was asked to hang around and do a demonstration later that day for Bill Gates during a meeting with Microsoft Corp.’s founder.While Segars and his team are in the dream scenario for technology executives: invest for growth and worry about profitability later, the exchange is taking them out of their comfort zone. ARM’s technology is pervasive in semiconductors. Son wants ARM to move into software and services.

When Son first opened takeover talks with ARM, he became fascinated with a “science project,” according to Segars. One of the reasons Son bought ARM is his belief that the chipmaker, with designs that dominate the smartphone market, could achieve similar market sway in the chips that will power the internet of things -- industry jargon to describe the connection of everything from refrigerators to factory equipment to the internet.

That connected future doesn’t seem to be dawning as quickly as Son and many other futurists hoped. And one reason is because all those connected devices present a huge management hassle -- they must be made secure, have their software updated and stay connected. Doing this is technically complicated, and potentially expensive.

Another problem is that ARM didn’t have much expertise in services for the internet of things. It had always been two steps removed from the actual end users of the devices that incorporated chips made with its designs.

So now, with Son’s encouragement, ARM has begun bulking up its IoT services division. In August, the company spent $600 million for U.S.-based data analytics startup Treasure Data Inc. -- its largest deal in 14 years. In June, the target was Stream Technologies, a Glasgow-based company that improves connectivity for internet of things devices....MUCH MORE