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Man with a big imagination

Man with a big imagination

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By eeNews Europe



Hanns Windele: You have gone on record as saying that one of the keys to success is identifying future opportunities. How do you go about doing this?

Sir Hossein Yassaie: It’s actually quite a formal process for us, perhaps more formal than many would realise for an IP company. We basically do three things. First we look at the trends in technology, and by that I don’t just mean what’s going on in the semiconductor technology.

I mean what’s going on in technologies we care about such as graphics, video and audio – also software. The second thing we do is to understand the changes – what I call the ‘direction of travel’ – in the food chain in our industry. If you look six years down the line, you can’t say the world will look exactly the same, because it won’t.

The third thing is really all about the consumer trends. What people don’t appreciate is that you can do a lot of consumer analysis through the Internet these days. You can reach thousands of people and ask them questions about what they care about. A few years ago we were trying to work out whether customers cared about streaming content versus having it on the device.

And so you say: "if you could do something like this… would this be of interest to you? and why?" All these analyses form the basis of a long-term plan. And then the rest of it is actually more of a short-term proposition, looking at visible markets and using data to validate the shorter-term horizon.

Hanns Windele: How much of a role does the spreadsheet play in all this?

Sir Hossein Yassaie: I hate spreadsheets. In my previous company people would justify anything with a spreadsheet. They’d say: "it’s a big market, let’s aim to get 10 per cent of it." It’s easy to do that and you can justify anything. I think where the spreadsheet can be useful is to validate your long-term plans once you’ve done the trend analysis. You get a numerical back-up, which tells you how to work through things.


Hanns Windele: when it comes to M&As, are we dealing with simply inserting your technology into another company’s way of doing things?

Sir Hossein Yassaie: Once we have understood the overall road map of where things are heading, if we then feel that we have to be in a certain market, then we will look for disruptions. In 1993-4 I decided to go into graphics because I saw graphics technology was going to move from the PC into portable devices.

I could see that it was all going to be about footprint and a different memory system, meaning you’d have to execute what you are doing very efficiently. That’s what led to our mobile, low-power, efficient architecture.

You can identify those disruptions and address them yourself, or acquire someone who knows how to do it, or you can invest in start-ups. We have investment in about 10 companies in one form or another as part of our overall plans.

Hanns Windele: What is the balance at Imagination between organic growth in-house and looking outside for solutions?

Sir Hossein Yassaie: We are very much in-house driven. If you look at our underlying technologies, the graphics and video were entirely homegrown. Before we acquired MIPS Technologies we even developed our own processor as a way to scale up what we were doing. 

In terms of connectivity we acquired Ensigma, a company recognised for its know-how in signal processing as applied to broadcast and wireless. That was an expertise we didn’t have. That company used to be a leading consultancy, but when we acquired it we said: "no more consultancy; the focus is now going to be on creating a generic solution for connectivity". That’s how the Ensigma RPU (radio processing unit) came about.

Hanns Windele: Will Imagination concentrate in future on growth through in-house development or further acquisition?

Sir Hossein Yassaie: We’ve done a certain amount of acquisition apart from MIPS. There was Ensigma of course, and then in 2010 we acquired Caustic Graphics, which is in the ray-tracing technology area. And there are other more recent ones, which are small to medium-size.

But, I think strategically we have already done most of the things that we need for today. We’ve covered the processor, connectivity and multimedia technologies, which we see as the three key elements. I think the focus of the business now is to fully exploit what we have and also bring these three technologies together and to leverage them as platforms too. A bigger focus now is to provide enhanced financial performance. That’s the plan.

Hanns Windele: How much was the acquisition of MIPS a game-changer?

Sir Hossein Yassaie: When the MIPS opportunity came up, I saw the opportunity to speed up what we were doing. MIPS bought in a strong customer base despite the fact that it wasn’t making as much investment as it should have.

The other important thing about MIPS was that we got a very clear commitment from Google to support Android, and its historical Linux ecosystem was quite strong. It also doubled up our engineering capability. In the IP business you have to do the licensing first before the volume ramps up.

I think the big issue with MIPS was that it needed certainty about the future. Over the past few years we have come to realise that there are a lot of engineers out there who really love MIPS and so from the technological point of view it is highly respected.

We dealt with the issues of uncertainty and investment and what we announced last year – that we had 50 or so licenses – represents a dramatic change in customer commitment, and we are seeing that momentum continuing. As to the royalties: we are being conservative. They might go down and they might be flat before they pick-up. That’s just a time-line statement.


Hanns Windele: what is the main factor that leads to the success of an IP company?

Sir Hossein Yassaie: The IP business is only perceived to be successful after the event. There are many IP companies that don’t succeed and I can give you a long list. To succeed in the IP business you must have patience and you must believe in whatever it is you are trying to achieve.

If you’re just trying to secure short-term revenue contributions it won’t work. But if you have a long-term view then it might. I have noticed some EDA companies are getting into IP in one form or other, but when you look at Imagination, when you talk about IP it’s not just about developing the core, it’s more about developing the ecosystem around the IP than the IP itself.

Hanns Windele: Imagination is rich in technology, but looking at your stock price I see you’ve not exactly been rewarded for that, have you?

Sir Hossein Yassaie: I think the reality is that markets, particularly these days, are short-term and care only about limited horizons. It’s difficult for a CEO of an IP company to produce short-term responses to financial requirements. We have to take a strategic view based on the three key areas of processor, connectivity and multimedia.

That does require huge investment. If I concentrated on just one of these the share price would perhaps, in the short-term, be higher. But as a CEO you must also look forward in time to say three years from now and create higher and more sustainable shareholder value in the longer range.

Hanns Windele: Do you think that Imagination is vulnerable to being taken over?

Sir Hossein Yassaie: We have multiple major customers who value our independence. These are people who are long-term supporters who have an understanding of where we are heading. This gives me the confidence to believe that we can carry on as we are and execute the plan.

Hanns Windele: Is there a secret to the way in which Imagination has succeeded?

Sir Hossein Yassaie: If you look at what has driven me – or Imagination – and if you look back at the slides that I had in 1994-5, amazingly enough we have arrived at where I predicted and hoped we would. I had this grand plan and a lot of people told me that I was trying to do too much, that what I was doing was crazy.

But step-by-step we focused on graphics as a disruption because I absolutely believe that as an IP company the ultimate goal should be to have all the key inter-related elements so that you can service the customer with efficient solutions and not just technologies. That is what has driven me and it has taken us many, many years. I thought maybe it would take a decade, but actually it has taken more like 20 years to get here.


Hanns Windele: This column is called Iconic Insights – is there anything you’ve learnt from your icons or want to impart to those who might follow your guidance?

Sir Hossein Yassaie: I don’t really know what the notion of iconic means, but if you are asking me what I care about, then the real driving motivation is that I want to make a difference. When you get to a certain age and you look back it’s nice to be able to say, “I did that”.

I certainly have enjoyed what I’m doing. Making a positive difference in a large enough scale is the thing that drives me and to do that I don’t think that you can take a short-term view of things. You have to have a vision. You have to have planning and you have to be prepared to be knocked down. When you’ve been knocked down you have to be able to get back up again and continue on your path.


Quickfire questions

What are your favourite leisure activities?

Hiking and walking in the middle of nowhere – places like the Lake District or the Yorkshire Dales.

What are your hobbies?

Like everyone else I have a great interest in music, but also walking and some sports and I’m a keen follower of current affairs.

What (non-business) book are you inspired by?

I enjoyed ‘The Kite Runner’ and ‘A Thousand Splendid Suns’ by Khaled Hosseini.

If you could take up a senior role outside technology business where would that be?

I would probably be an academic teaching the next generation.

If you ended up in prison, who would you share your cell with?

I think I’d settle for being in a prison cell on my own, reading books and listening to music. My favourite band is Queen. So I’d hope to have their albums with me.

What is the one gadget you couldn’t live without?

My Apple iPhone 6.

If you had more time how would you spend it?

I would spend it with my family, my two daughters and my wife, definitely.

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