IPextreme comes up with Constellations, an IP industry self-help group

Among their other positive attributes, silicon intellectual property vendor IPextreme seems to spend a lot of time thinking about the mostly-broken IP business model. Company president and CEO Warren Savage, to his credit, sees the prosperity of his company as a particular solution to a larger equation—the survival of small IP companies.

Arguably, it is the smaller companies that are first to market with the interesting ideas. But indisputably, the verification, maintenance and support of an ambitious piece of IP is a huge challenge for a small company. So are marketing and sales. You simply can’t run a global sales organization, or even an effective global PR campaign, on the kind of budget that a three-person, self-funded IP company can put together. Savage knows this well, having bootstrapped just such an operation into a viable company.

And Savage thinks he has a solution to at least part of this problem: a formal effort at partnership marketing. He has started an organization, called the IPextreme Constellations Program, to that end.

It’s really very simple. Members of the program pay a $5,000 annual fee. Then when someone from a member company is calling on a prospect, if they find a requirement for a variety of IP they don’t personally provide, they submit the lead to the Constellations database. From there, the lead goes to a member company that does provide a potential match for the requirement. In effect, this multiplies the size of a member’s sales organization by roughly the number of companies in the program.

I suppose one could quibble about that arithmetic—for instance if a little company had only its CEO out making sales calls, and all the other members had ten salespeople and reps each around the world, the little guy would be getting a great deal for his $5 grand. And the effectiveness of the program would vary somewhat with the overlap of your products with the product lines of others in the program. But those should be second-order calculations.

Initial members of the program are CAST, Inc., Sidense, Tiempo, and NXP Semiconductors. Not at all by coincidence, the four companies have mostly-complementary product lines in the IP world. Clearly IPextreme is interested in adding to this list.

While Constellations addresses the cost-of-selling problem small IP vendors face, it does nothing to help with the back-end issue of verification, maintenance, and support costs. But don’t be terribly surprised if it turns out that Savage has been pondering that question, too.