Licensing Interconnect IP for Fun & Profit

By Kurt Shuler, ArterisIP
EETmes (February 24, 2021)

“Build or buy” is an age-old question. But here’s another one: Why do you even license IP?

Nobody builds their own Mercedes-Benz from scratch. Even if you’re a third-generation, dyed-in-the-wool automotive engineer from Stuttgart, you still won’t build your car. You buy it.

And why do we buy instead of build? Because the guys at the factory know what they’re doing. They are more experienced, have better tooling, and their product comes with a factory warranty.

So, what can we learn from these businesses, if anything?

It’s that even engineering teams need to reconsider the old make-versus-buy decision. Business principles teach us that we’re supposed to focus on our value-add and leave the other stuff to third parties.

Another consideration in the buy vs. build discussion, can we save money — or better yet, make money — by using outside technology instead of developing it in-house? There’s no easy answer to that question, so let’s look at the numbers.

The big question then becomes, which parts do we design in-house, and which do we bring in from outside? That’s a whiteboard architectural discussion, which can be heated and emotional. Engineers want to build stuff — that’s what they do. Managers want to get a working product out the door as economically as possible — that’s what they do. If the engineers want to make, and the managers want to buy, who wins? Who gets to make that call, and how do they justify the decision?

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