PalliserBlog

Using IP has become prevalent because the benefits outweigh the risks. Many successful projects have saved time and money by using circuits that were developed elsewhere, either in another part of the same company or at an IP vendor.

Start-ups and other small companies have limited resources and jealously guard every penny that they spend. They don’t want to hire, train and managed any more people than they absolutely need to get the job done. Purchasing IP is cheaper and faster than developing a new circuit from scratch.

Another consideration is that an IP purchase allows the organization to focus it’s resources on it’s core competency. For example, suppose that you are building a RAID storage controller. Your product would probably need multiple serial ATA interfaces but the design of those interfaces is not how your product will be differentiated by the market. It’s a good business decision, therefore, to focus the companies engineering resources into the design of the key parts of the RAID engine, rather than into development of something that can be purchased off the shelf.

Large companies often create internal IP development centers to build circuits that are used in multiple disparate projects. These centers in effect act as IP vendors to the rest of the organization, and have to follow similar methodologies as an IP vendor would. Project managers that use IP which was developed by one of these internal development centers may not have the same legal and contractual complexities as they would if they bought the circuits from another company, but they must still protect themselves from the possibility that the IP itself is deficient, or that the integration of the IP into the rest of the design will cause a problem.