Observations from the 2011 GSA Awards Dinner and Celebration

December was a special month for Model N as one of our long-term and most innovative customers, Avago Technologies, was awarded the 2011’s “Best Financially Managed Semiconductor Company” at The Global Semiconductor Alliance’s (GSA) Annual Awards Dinner and Celebration. I attended the event and had  the opportunity to join Sanjay Mehrotra, President & CEO of SanDisk in announcing the nominees and presenting the EMEA award to Dialog Semiconductor. 

The award was one of only a dozen given to leading semiconductor companies at an event of over 2,000 industry stakeholders and leaders. The event and dinner was a powerful reminder of the reach and influence of the semicon industry. Despite a myriad of challenges in 2011 running the gamut of financial upheaval, natural disasters and an ever worsening global economy, the industry broke sales records of $300 billion for 2011. This takes discipline, innovation and focus in an industry that seemingly goes from boom to bust in very short cycles. The exact kind of companies that were recognized this month with the industry’s premier honors.

This was Model N’s first year participating in the event. On first observation, it was hard not to feel the overwhelming influence of the attendees in the room. The evening highlighted the breadth and maturity of the semiconductor space, emphasizing the barriers that can stand in the way of success for any company or industry; which brought up some very pertinent, if not somewhat existential, questions about success. A topic that seemed the most current pertained to the matter of innovation:

With all of the challenges that the semicon industry faces today, many of which are barriers to entry (startups typically being a key source of disruptive innovation), where will innovation come from moving forward? Will it come from the outside or from massive internal change?

As a driver for huge technological progress in industries outside itself (i.e. automotive, transportation, PCs, communication, and entertainment), the semiconductor industry has over the last few decades adapted to its environment with changes to operational strategies, mainly along the lines of streamlining resources, cutting go to market investments and massive shifting of operations to low cost centers. This has resulted in a mature industry dominated by fewer innovators and more focus on moving volume. Not surprisingly a lot of the change in semiconductors is being driven by an encouraging and growing amount of private equity presence. Some of the most encouraging key turnaround stories including Avago seem to signal that valuable advances in the industry are indeed coming from the outside. The best part of this is that PE companies drive change and do it immediately.

On a different note, but along the same vein, where there is innovation, there is leadership. One of the objectives of the GSA Awards was to not only recognize the companies that showed success in the industry, but also to distinguish the leadership accomplishments of the individuals within those companies. Specifically, Dr. Henry Samueli, Co-founder and Chief Technology Officer of Broadcom Corporation, who was honored with the evening’s most prestigious award for exemplary leadership. What Samueli has been able to accomplish on not just a professional level but as a contributor to the academic space within semicon and the philanthropic space outside semicon is no less than impressive. As a parallel to Model N’s development, one of the things Samueli expressed was his uncompromising passion for excellence and pushing the envelope at every stage of the journey. One of the small ways in how this personally played out for him was a routine work day rarely ending before midnight but satisfactory in that it started and ended with a focus on customer success. I relate to this 100%.

It is fitting then that another highlight of the night was the event’s recognition of Avago Technologies. The leadership at Avago Technologies saw Revenue Management as the keystone of their financial management strategy and turnaround. I recall the CEO saying to me early in our engagement with them that Revenue Management was in his view practically a requirement for going public. I also recall the CIO calling me a few days into the implementation to say that if we went live with the deployment inside of 6 months, he would take out a full page ad in the Wall Street Journal to commend Model N. Well, Bob, we are waiting for the ad. The award for Avago is well deserved and a testament to the company’s effective management of its revenues by its uncompromising focus on aligning the people, process, and data it relies on day in and day out to drive it’s strategy from plan to execution. Congratulations to our partner and customer, Avago Technologies.

I’m looking forward to continued success in 2012.