Life at the cutting edge
Mike Muller, co-founder of Arm, on building a multibillion dollar business
Across a wall, red lights flicker from a massive scale model of the world’s largest microprocessor. A collection of BBC Micro computers stands ready for a coding class, as if frozen in time. In the entry hall rests a prototype of the Sinclair ZX Spectrum – what would become Britain’s best-selling computer in the early Eighties.
Away from the gowns and spires of central Cambridge, the Centre for Computing History is tucked out of sight near an industrial park. The museum has an impressive collection and is packed with school parties having lessons in coding or playing on one of many vintage games consoles. It has also attracted the support of one of the biggest employers in the Cambridge technology scene.
“This place will always have enthusiasm, but if a museum goes through bad times and you can’t pay the rent it is game over,” says Mike Muller, chief technology officer and co-founder of Arm. The executive, who has spent nearly three decades at the maker of cutting-edge microchips and has helped lead the company from start-up to a 6,000-person business, recently made a £1m donation to the museum that is seeking to preserve Britain’s computing legacy.
Founded by technology enthusiast Jason Fitzpatrick, and until recently bootstrapped from his personal collection, the museum has 1,100 computers, each showing a step in the evolution of computers. Muller’s main contribution has been to help secure the unique collection at home.
While the exhibits date back decades, in the 21st century it is Arm’s state-of-the-art chips, designed in Cambridge, that have emerged as central to modern supercomputers and the smartphones on which our modern lives rely. Arm faces one of its most transformative periods, with a huge investment in technologies and thousands of new employees, set against tough market conditions and a looming trade war.
It is fitting that Muller would lend his support to a museum of IT history hidden away in a warehouse. When Arm was founded in 1990, spun out of British pioneer Acorn Computers, the
early team decamped to nearby village Swaffham Bulbeck, renovating a barn for their headquarters.
The UK technology industry was very different then. Despite the academic legacy of geniuses such as Alan Turing, Cambridge had only a nascent technology sector. “When I graduated from Cambridge in 1980 the degree in computer science was two years, and one for natural sciences,” Muller says. There wasn’t thought to be enough computer science to teach a full three-year course. He later joined Acorn in London – his interview consisted of explaining how he would protect pub poker machines from cigarette lighters that could fry the system for payouts.
Acorn was known for its work on the BBC Micro computer, designed to help schoolchildren learn coding and IT skills. In the mid-eighties, it began work on Project A, a team to build a microprocessor solution, the Acorn RISC Machine. But as the company struggled, it spun out the processor team into a licensing business in a joint venture with Apple in 1990, setting up what would become Arm.
Muller was one of the original founders. The business brought in Robin Saxby to lead it, with Muller heading product marketing, Jamie Urquhart running sales and Tudor Brown on engineering. Arm’s licensing model for its core processor designs meant it could work with all major chip makers and its designs went from their roots in Apple’s handheld Newton computers to billions of smartphones, personal computers and all kinds of gadgets around the world. Over the next quarter of a century, Arm changed from a few engineers in a shed to a multibillion-pound FTSE 100 company – the “crown jewels” of Britain’s technology scene.
Then in 2016, it was snapped up for £24bn by Japanese technology and investing giant Softbank. It was a deal none of the team saw coming, Muller says: “We didn’t think anyone would make an offer. We were in a unique position of working with everyone in the industry. Then Softbank made the offer out of the blue.” The deal, pushed through by Softbank’s enigmatic chief executive Masayoshi Son, has gone down as the fastest FTSE deal ever. “Masa said: ‘This is the price, and we are going to buy it’.” Muller slams the table enthusiastically: “Masa is a get-it-done kind of person.”
The deal was transformative, not least for Muller who reportedly received almost £23m for his stake. Softbank sees Arm as the gateway to mobile computing revenues and a company uniquely positioned to benefit from the wave of connected devices, the Internet of Things, that could number 22bn devices by 2022.
The deal led to major investment. Arm’s headcount soared, with more than 2,500 staff in the UK – many at its Cambridge HQ. Its Cherry Hinton site has undergone a rapid expansion, as its crowded canteen suggests. Muller’s office is often booked out for meetings, such is the demand for space.
Arm is now in the final stages of an ambitious expansion. New buildings have been designed with the structure of microprocessors in mind, the pattern moving from the outside onto the as yet unopened glass office doors.
While the expansion is a boon for Arm and Cambridge, challenges await. Not only has the global semiconductor market weakened – revenues will fall a reported 9.6pc this year – but Arm has been caught in the Us-china trade war, forcing it to suspend some business with Huawei, the Chinese smartphone maker on a US blacklist.
Muller is sanguine about the impact. “When Arm started out in 1990 our first licence was with Sharp in Japan, and at the time there was a bit of a Us-japanese trade war. Trade wars have come and gone. Everyone just hopes that it is a short-run thing.”
He is bullish on other elements of Arm’s business. Last year it bought US data analytics start-up Treasure Data for $600m (£480m), a deal the firm says will provide more services to its Internet of Things products. Some former insiders and analysts questioned the rationale of the big data move, which last year netted revenues of only about $190m. Total revenues were in the region of £1.5bn, according to Softbank.
Muller argues it is part of a longterm approach that would not have been possible when the company was listed: “I don’t think as Arm Holdings PLC we would have been able to make that investment because the return is three, four, five years away. It is a difficult story to sell to the City.”
Arm has left its mark on the history of computers, but its success also shows multibillion-dollar business can and will succeed in Britain. “We have given credibility that you can do this,” Muller says. “Cambridge is now a city with hundreds of high tech companies. In the City there is fintech and in Manchester. There are whole pockets of innovation. Arm has benefited from that, and in Cambridge has contributed to that.”
‘Softbank sees Arm as the gateway to mobile computing revenues and a company uniquely positioned to benefit from the Internet of Things’