“I’ve designed technology that’s been used in billions of devices and pretty much everybody listening to this recording will have used something that I’ve designed and if not, definitely something that ARM has designed. I’ve joined ARM as the most junior employee, employee number 16, interested in designing microprocessors and I’ve ended up as the CEO of the company, now a global company with over 6000 employees and also sitting on the board of Softbank.”
Simon Segars is the chief executive officer (CEO) of ARM Holdings plc. ARM is a world-leading semiconductor IP company headquartered in Cambridge, England, that was acquired by SoftBank Group for £24.3 billion ($32 billion) in 2016. Today he took time out from his busy schedule to talk about his background and career with Richard Sharpe at ARM HQ.
Early Life and Education
Simon Segars was born in Basildon in Essex. His mother was a primary school teacher and his father was a fireman. Simon says that he was very interested in all things science, and his parents encouraged him to experiment and build things.
Simon attended the Greensted primary school which he describes as “pretty small and safe” and which he enjoyed. He progressed to Woodlands comprehensive school in 1979 where he gained O Levels in maths, English, physics, geography, biology, craft, design and technology, CDT. Simon then moved to Palmer’s sixth form college which offered an A Level in electronic systems. Simon explains: “I was, by that point, very interested in computers, and getting into programming and thinking about how computers worked. The option to do an A Level in electronics sounded like a lot of fun.” He adds: “Palmer’s was somewhere that started to give me a view that there was a bigger world out there and started to think about what I might do within it.” Simon gained A level maths, physics and electronic systems.
Simon’s first computer was an Oric-1. He says: “The beauty of the computers that were made in that era was that they didn’t have much by way of compute power or memory and you really had to work hard to program it as a result. It forced a learning and a better understanding how the computer worked and how to get the software to do the thing that you were trying to get the computer to do.” Simon and friends used the computer to write basic computer games.
Sussex University and STC Communications
After sixth form college, Simon progressed to Sussex university where he gained a First in electronics engineering. Prior to starting university, Simon spent a year working at STC Communications which sponsored his degree.
Simon explains: “I was motivated in my years at Sussex to do well, which I did. I had a sponsorship through university from STC telecommunications. I had worked there for a year before I went to Sussex. That was a great experience because I got a greater insight into what work was going to be like and the kind of practical application of what it was that I was going to be learning at university and that was in itself very helpful.”
It was at STC that Simon got a taste of what chip design might be like, he says: “They were quite an early pioneer in the UK of designing chips. They had a lot of high-performance computing equipment. They were one of the first places in the UK that bought some SPARC workstations when they were brand new and the hot thing in computing. I was exposed to a lot of stuff that I otherwise wouldn’t have been and that has been really helpful throughout my whole career, having had that experience so early on, and being given the freedom to go and play with all this stuff that they had without too much actual accountability.”
Simon says that he also learned to have an eye for detail: “If you’re going to do engineering, you have to have an appreciation of detail. Designing circuits, chips, everything has to work. You only have to get one thing wrong for it all to be wrong.”
In 1990, after graduation, Simon returned to STC which was in the process of being taken over by Nortel. Having read an article about ARM in the trade press, Simon was so inspired that he wrote to the company asking for a job. He explains: “Through university I had become interested in microprocessors; through STC I had become interested in how you design chips and so ARM being spun out to design microprocessors was ‘OK, this is the job I want, and it’s in the UK, and it’s just up the road here in Cambridge’.
In 1991, Simon joined ARM as an engineer; he was the sixteenth employee in the relatively new spin out company formed from the development of the Acorn microprocessor. ARM’s then CEO was Robin Saxby who set out to license the ARM chip to other companies rather than go into manufacture. One of the key elements of ARM’s success was their determination to keep the product consistent; Simon explains: “One thing that absolutely helped us in the early days was being absolutely resolute that we would keep the product consistent. We wouldn’t let people modify it.”
For Simon the new company culture was completely different to his experience at STC. He says: “We were in a converted turkey barn in the middle of a village called Swaffham Bulbeck. It was completely different from the environment at STC where you clocked in with a cardboard punch card and at the end of the week had to manually calculate how many hours and minutes you had been in the office. At ARM, it was like, we’re here to do this thing, here’s a key to the office, if you’re the last person out, lock the door when you go and turn on the alarm. Everybody had to chip in and do whatever it was that was necessary to get the company to the next level of success.”
The ARM microprocessor was designed and built by Steve Furber and Sophie Wilson who discovered that they could make run using very little power. Simon says: “There’s a beauty in the simplicity of that first ARM design that we try and live by today; if you can make it simpler, you can make it lower power.”
Simon explains what had been happening prior to the 1991 ARM spin out, saying; “The technology was used to power Acorn computers, it had gone from a processor to adding three other chips; a memory controller, a video controller, an I/O controller, which formed the chipset of the Acorn Archimedes, which was all for internal consumption. The design had been licensed to VLSI Technology that had started to use it as a building block in other ASICs that other customers wanted to build. So, there was very early idea of application-specific integrated circuits. It was a very early idea of why don’t you put a microprocessor inside a chip, and that will probably turn out to be useful. We didn’t know exactly where that was going to turn out to be useful, but when ARM was set up as a stand-alone company, the idea was that can we licence this processor to other semiconductor companies on the grounds that, a processor inside a chip was going to be useful?”
The company, alongside its partner Apple, had been set up to create a processor for the Apple Newton. Apple was building a post-PDA, personal digital assistant. Simon continues: “A product that did not turn out to be wildly successful. I mean it’s a fantastic piece of engineering. So that was what the company was set up to do, not build chips, but to evolve the processor technology, license it to chip companies.”
Simon remained an engineer for eleven years, he says: “The fun about ARM at that time, and the fun of any start-up, is that no one’s role is narrowly defined.” Simon often found himself working on pitches to companies as well as designing.
Executive Vice-President of engineering, ARM
After eleven years Simon was promoted to Executive Vice-President of engineering, taking on responsibility for running teams, managing projects and eventually responsible for the engineering functions of ARM, leading 450 employees in the UK, France and Austin, Texas.
Simon says of the experience: “Being in this start-up, everybody had to do a bit of everything and I just kind of evolved with the company. … It was very much on-the-job learning. There wasn’t a huge amount of kind of formal career development going on. There was management development programme like a company like IBM would have or which existed at STC. It was, learn by doing, learn by, seeing what more experienced people had done; learn by going out and visiting these companies all around the world who were interested in using our technology, and just run faster to keep up.”
Executive Vice-President, Worldwide Sales, ARM
Simon continued to progress moving becoming Executive Vice-President, Worldwide Sales which he did for three years. He adds: “I had a lot of commercial experience, but I had not run a sales team before. It felt like a bit of a big step, but, Warren and others talked me into it, and I went from running worldwide engineering to running worldwide sales. … I knew the sales team at the time because I had worked with them on helping get deals done. So, I came into the role, at least being respected by the team even if some of them certainly were looking at me going, ‘Well, what the hell do you know about sales?’ I’m going to learn nothing from you.’ But, you know, for, for me, it was a great experience, and it forced me to learn how to manage and get on with, and communicate with, and motivate, people who do have a completely different set of skills, drivers and motivations.”
One of the key elements to ARM’s on-going growth was getting its chip design into mobile phones as the shift from analogue to digital took place. Simon explains: “For us, getting design into mobile phones as they went from analogue to digital, it was in the moment, impossible to know how significant that was going to be. … The whole process that the industry went through, of driving cost, and, driving up the volumes of mobile phones, and us being at the right place at the right time with the right technology and the right set of partners, enabled us to catch that wave of growth.”
The company licensed its processors to many companies that wanted to play in that market and found that many of them started to look for other markets to expand into. Simon continues: “Having a chip with a processor in it that can run software and utilise all the other features of the chip turned out by that point to have been a universally good idea.” He continues: “Because by that point so many chip companies already had an ARM processor in their portfolio of IP, and had engineers who had experience of using it, it was just the natural technology choice. The pricing of our product was such that it was economically an easy decision to make as well.”
Despite not being a manufacturer of its own chips, ARM invested in R&D work with EDA companies to make it easy to use an ARM design with their tools. Simon says: “We worked with the foundries to look at how transistor technology was going to scale from one generation to the next, and understand how we could utilise those new improvements, or avoid the issues in our next generation processor design. That ecosystem became really important, and to this day we invest a lot in that, so that the design process can be easy and also predictable.”
Executive Vice President of Business Development, ARM
In 2005 Simon became a board member of ARM and in 2007 he became Executive Vice President of business development. At this time, ARM had been building up as a company through a number of mergers and acquisitions, including the acquisition of Artisan Components; ARM’s biggest acquisition to date at about a third of its market capitalisation at the time.
Simon explains: “We had designed our processors independent of where it was going to get manufactured. We knew that the performance of the processor was dependent on all the other bits of technology that you need to go from what is effectively software source code that we shared to actual transistors on a wafer. What Artisan did was provide physical IP, low level logic libraries, memories, the I/O that sits round the edge of a chip: the physical building blocks that you actually build a chip with. The idea was that if we can start to optimise some of that physical IP for our processor, then as performance goes up and up, and the desire to keep having power go down and down, that was going to become more important.”
Executive Vice President and general manager of the physical IP, ARM
The acquisition did not turn out as expected and Simon suggested to Warren East, that he should go out to California to run Artisan to ensure that they were able to get the strategic advantage that they wanted from the acquisition. In 2007 Simon moved to California and became Executive Vice President and general manager of the physical IP. He adds: “I focused on getting that business on the right track and focused on the strategic objective we had, which was, how do you make better microprocessors, how do you make it easier for people to deliver really high performance with really low power, and not have to spend a year doing back end layout of this processor, it accelerates designs.”
Simon talks about the difference between Silicon Valley and Cambridge. He says: “Silicon Valley is a bit of a bubble. There are similarities with having a world-class university. In Silicon Valley, lots and lots of people move there to go and be in the tech sector. There’s a lot of venture capital money, there’s a lot of people who have had successful exits of their companies, either doing it again or, at some point becoming an investor, becoming an adviser to other businesses. There’s a huge celebration of success as part of the culture in Silicon Valley, and, almost an expectation that you’re going to work in some interesting thing in tech. Here in Cambridge there’s a lot of that. It’s obviously on a smaller scale, and I would say, or at least this was the case when I moved from here, the city is less dominated by the tech sector than Silicon Valley is generally. Cambridge has been a great place for us to be. … For us, as a technology hub, it’s been fairly easy to hire people to come to Cambridge to help with our growth; whether it’s from other parts of the UK, mainland Europe, or in fact all over the world, Cambridge has been relatively easy to get people to move to. People like being here. It’s a cool place. There is so much history of science in Cambridge. It’s quite an incredible place really.”
CEO of ARM
In 2013, Simon became the youngest and only the third CEO of ARM. The company had also succession planned for the Chairman’s role and Sir John Buchanan was appointed but then had to step down due to illness. He was replaced by Stuart Chambers. Simon says: “Stuart was a phenomenal chairman for me, being first-time CEO, I needed a coach as much as I needed a chairman and Stuart filled those roles. I really enjoyed working with him.”
After several years of knowing Masa, the owner of SoftBank Group, he approached ARM with a view to investment and takeover. Simon says: “What was I was thinking about at the time was ‘is this a good outcome for shareholders? Tick yes. Is this a good outcome for the company?’ I had worked here almost my entire career. I would not have wanted to sell the company if I thought it was going to destroy the value, destroy the partnerships that we had built, and it would be the end of the technology. And for pretty much anybody else acquiring ARM, it would have upset the neutrality, because we license to everyone. We license to companies that compete with each other fiercely. If one of them bought us, nobody else would ever license technology from us ever again.
“SoftBank are completely neutral. They can own ARM. They don’t buy chips; they don’t manufacture chips. They’re big into technology but they weren’t going to upset that neutrality. It looked like a great way to actually grow the company faster, and not being public any more, Masa was very keen on investing more aggressively for the future, so we’d be able to expand without having to explain to the stock market every 90 days why our margins were going down. So, it looked like it was going to be a winner all round. Great outcome for shareholders, but great result in terms of our ability to drive the company more aggressively, which is how it’s panned out.”
On the subject of Intellectual Property
“We have not suffered from IP theft in the way that you might think over the years. We’ve had the odd issue. Our business model I think helps generally protect us here. We are licensing to companies who really want to buy into our roadmap and paying us fairly for use of the technology for today’s product is the thing that’s going to enable access to tomorrow’s product. Software stickiness is a big thing with a microprocessor architecture, but by the time you’ve used our product, imported a load of code, you want to keep that going through our roadmap. Therefore, people want to develop long-term relationships with us, and that is one of the factors I believe that’s helped avoid any, any bad IP issues over the years.”
Simon says the biggest mistakes he’s made in his career have been around people. He explains: “One thing I have learnt is having a great team who are all aligned around what it is you are trying to do, makes an enormous difference. I have absolutely been guilty of tolerating having some great people who weren’t all rowing in the same direction as everybody else. … It can look like they’re producing some quite good results, but actually, that kind of friction around the fact that they want to go in a slightly different direction and they’re not really on board with the strategy that you’re trying to pursue, creates drag. I’ve learnt over the years the best thing is to recognise it and deal with it, despite how brilliant the person appears to be. You need team players, people who are bought into the strategy, up for a discussion, and when the discussion’s been had, when the decision’s been made, get on board with executing the decision.”
A CEO’s Helicopter Vision
On the subject of the need for a CEO to have helicopter vision Simon says: “The role of the CEO is to be able to dive down into the detail when necessary and pull back out. You need to spend most of the time at a high level. But for me, my background in engineering and in designing some of our products, gives me an advantage of a good appreciation of what we actually do, a good appreciation of what our customers do when they get a product from us, and that helps. But you do have to operate at a pretty high level. You do have to trust that the people who work for you are doing their thing and force yourself not to get sucked into the detail in fact.
On the Internet of Things and security
With the internet of things developing a pace, ARM is working on security for the future. He explains: “The security and privacy issues around IoT are complex, and not ones that the tech industry can just brush aside. … One area where we have really focused on is around security in IoT devices. So, we are already in billions and billions of very small chips that are the kind of device that you would find in a smart thermostat, or a smart light bulb. We’ve done a lot of work on what sits around the microprocessor to allow you to build a secure system. … So, we’ve done a lot of work on the devices around security. We’re also building an operating system; we’re putting a whole software stack to allow remotely deployed IoT devices to have their software and their security managed remotely. … What matters is that you care about security. We have a role to play in that, but no one company is going to fix security for IoT, so, we are also trying to drive some industry collaboration around security, because it is the responsibility of the supply chain to get security to the place it needs to be.”
Simon is Chair of the Electrostatic Discharge Avoidance (ESDA), a board member of Global Semiconductor Alliance (GSA), and a member of the UK Prime Minister’s Business Advisory Group and of the UK Ministry of Defence Innovation Advisory Panel.
Interviewed by: Richard Sharpe on the 23rd July 2019 at the ARM Offices in Cambridge
Transcribed by: Susan Hutton
Abstracted by: Lynda Feeley