Ceva has built a revenue strategy around selling IP

Remember that one kid at school who’d explain their top three formulas for eighth-grade algebra in return for a Mars bar? What if they were selling those formulas, not just to the whole class, but the entire school system? What if instead of a simple set of formulas, it was a grand blueprint that could solve all kinds of mathematical problems?

Licensing is a tad more complicated than this, but you get the idea. Companies that create and license influential technology aren’t just bringing in the candy, but theoretically supporting innovation and scale. Enter silicon and software IP developer Ceva: The Rockville, Maryland-based company earns licensing and royalty revenue from IP that allows so-called Smart Edge devices (anything from laptops to wearable devices, or even automotive platforms) the ability to sense, connect, and process data locally. You could think of it as the silent hero that makes the industrial Internet of Things (IIOT) tick. The company says 20 billion Ceva-powered devices have been shipped globally.

So how do you sell “blocks of technology?” During CES, Revenue Brew spoke to Richard Kingston, Ceva’s vice president of market intelligence and investor relations, on how the company builds a revenue model based on informed risk and how AI is presenting various growth opportunities.

It seems you have to invest a lot in R&D. How do you get the more technical sides of the business to work well with the sales portion?

When we’re thinking about bringing stuff to market, it’s about focusing on trying to find opportunity where you have tens or hundreds of customers at a time. We’re not so worried about the vertical, [we’re] much more interested in how the technology can reach many different markets and different use cases.

It sounds like getting the right sales team is incredibly important. What is that process like?

We’ve got a lot of people who’ve been at Ceva in sales for a long time. What I would say is the strength of Ceva, from that perspective, is being very good at understanding what it takes to be a good salesperson. Most IP salespeople stay within the IP industry…so they’re usually people who are very well skilled at selling IP, because it’s a totally different sale.

How much does AI change what Ceva does or how you think about what current and potential customers are desiring?

In the last year or so, we’ve introduced a whole family of these NPUs [neural processing units] that can go into anything from an earbud, or an industrial device, all the way up to running fully autonomous cars. So we’re there to help any customer who doesn’t have the knowledge to develop a neural processor or an AI processor themselves and realizes it makes sense to license one rather than spend their time trying to build a processor if it’s not their core expertise.

When the dust settles, how confident do you feel about where Ceva will land on AI, and how it can play into all your existing customers?

We came up with a strong belief that every customer we deal with in some way, stage, or form is going to have to come up with a plan to integrate AI into their products. So why wouldn’t it make sense for us to be their partner of choice or whatever it’s going to be to bring that AI technology to market?

When AI becomes pervasive across everything, now is the time you need to start designing the chips that are ready to do that. If you don’t, you're going to miss the next phase.