The Intellectual Property Business Model (IP-BM) - Lessons from ARM Plc.
Simone Ferriani - University of Bologna & Cass B.School
Elizabeth Garnsey - University of Cambridge
Gianni Lorenzoni - University of Bologna
Lorenzo Massa - WU & EPFL
Under what conditions can technology ventures design and implement a sustainable Intellectual Property Business Model? Many new firms in technology-intensive domains seek to adopt such models. This enables them to focus limited resources on core areas of competence, but raises significant challenges. These include the reluctance of customers to license the technology until it is generating value in applications and the experimentation needed to identify appropriate applications and markets, especially for generic technologies. Complementary assets must be fostered to transfer the technology across the value chain. Protecting the IP during scale up is problematic. In this paper we offer a detailed study of a firm that succeeded in overcoming these challenges, ARM plc. We attempt to identify what aspects of their experience (of IP generated growth) are generalizable to other firms. We define a business model as the way the firm is organized to create and capture value. We explore the kind of business ecosystem that must be nurtured for a firm to sustain growth through value creation and capture based on an intellectual property business model and find that reciprocity of benefits across the business ecosystem is needed.
Keywords: Intellectual property, business model, ARM Plc.