Warren East explains why he's leaving ARM

An 'element of staleness' creeps in when CEOs stick around too long, he said

Warren East, the outgoing CEO of UK chip design company ARM, has never displayed the bravado of his counterparts across the Atlantic, and that was on show Tuesday when he explained his surprise decision to leave the company on July 1.

East has been CEO of ARM since 2001 and overseen its expansion from a "promising startup," as he put it, to one that designs the microprocessors used in some 90 percent of the world's smartphones and tablets, including ones from Apple and Samsung.

At only 51, and with ARM on the cusp of expanding in new markets such as servers, then why did he choose to step aside now? To hear East tell it, ARM needs a leader who'll be energized enough to see its long-term plans come to fruition.

"We're putting plans in place now that will generate growth in 2020 and beyond, and I think it's important to have a leader in place who will see those plans implemented and executed and delivered," he told IDG News Service in an interview.

"That's a very long time period; I'd have been CEO for 20 years. I might still have a lot of energy but that's too long for this business. Twelve years is fine, stability is great, but by the time you get to 20 years there's an element of staleness that inevitably creeps in, and I think that leads to bad things in the future."

East will be replaced by Simon Segars, ARM's 45-year-old president who joined the company three years before him. He's seen as more of an engineer than East, having led ARM's chip development team for several years, but he has also run sales and business development.

"ARM is doing a great job delivering products and my first priority is to keep that machine going," he told IDG. At the same time, he'll continue ARM's push into servers, more types of network equipment, and "The Internet of Things," where he believes ARM can sell high volumes of chips.

That means no big strategy changes for ARM, at least in the foreseeable future. "We're very comfortable with where we are the next five years or so," East said.

The question for East, then, was when to make the move, and with ARM in good health, now is the right time, he said. "I don't want to walk out of the place in three or four years having set out a load of plans that I won't have signed up to deliver."

Retiring is "not on the agenda," but East said he has no specific plans for what he'll do next. "I love the industry and I intend to stay associated with it, and I'll make those specific plans on July 1," he said.

He's leaving ARM in good shape. Its revenue was up 21 percent in the last quarter, and its profits up 16 percent, outgrowing the semiconductor market as a whole. Almost 9 billion ARM-based chips went into devices last year, including digital cameras, thermostats, the GoPro wearable camera, and even drones.

Intel is working hard to design chips that can match ARM's power-saving characteristics, but it has yet to make much of a dent in the all-important phone and tablet businesses.

It's not without reluctance that East is bowing out from ARM. "Obviously there's a part of me that would like to stay in this business forever, it's an incredibly exciting one to be in," he told reporters on a conference call.

It seems likely he'll be reappearing somewhere soon.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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Tags business issuespersonnelArm Holdingsconsumer electronicssmartphonesComponentsprocessors

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James Niccolai

IDG News Service

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