CEO Spotlight: InterDigital's Bill Merritt focuses on M2M

Many of the wireless technologies that are integral to the way we use our phones are based on patents developed by InterDigital Communications. The company’s patent portfolio covers packet data, seamless handover, bandwidth on demand, and several other key wireless technologies. The same research that has led to the development of these patents has made InterDigital a key player in wireless standards definition, and the company derives the bulk of its revenue from patent licensing and standards-based research.
“Researching standards, we have seen some opportunities to take that forward, beyond just contributions to the standards,” said CEO Bill Merritt. “We’re sort of shifting some resources to go after those opportunities,” Merritt wants InterDigital to explore the development of commercial products, and to that end he has created a separate division within the company. James J. Nolan, who has previously led InterDigital Labs, will now lead InterDigital Solutions, the company’s unit focused on taking advanced technologies towards commercialization via partnerships. Allen A. Proithis, formerly head of InterDigital Solutions, will assume leadership of a significant effort focused entirely on Internet of Things and machine-to-machine (M2M).
“The opportunity in M2M is going to be enormous and part of the reason it will be enormous is that … you have billions and billions of handsets out there that all can start to be these providers of data, and also trusted connections,” said Merritt. “So that’s not only humans hooking up but it’s also machines and things. It’s going to be pretty wild and there’s a great opportunity for us there.”
The perfect “trusted device”
The evolution of the smartphone as a “trusted device” is part of InterDigital’s research history. “One of the early problems we solved was in the way an M2M connection typically worked – when when you added a connection it had to be authenticated all the way back to the core network,” explained Merritt. “If you thought about 50 billion connections, all those being authenticated back to the core network, the core network would melt. So what we designed was a system where you put what we call trusted devices at the edge of the network. And therefore your authentication takes place through that trusted device and you don’t need to do the authentication all the way back through the network. The handset is the perfect trusted device.” Merritt added that he does not see the handset as the only trusted device going forward. “Google bought Next for a reason,” he said.
For InterDigital, the M2M opportunity dictated a new business model. Merritt says the company has gotten “good traction” on previous commercial initiatives undertaken through partnerships, including its Smart Access Manager for connecting smartphones to Wi-Fi and cellular networks automatically, and its video optimization client which can adjust video quality on a phone based on the ambient light in the room and the user’s distance from the phone. But for M2M, Merritt wanted a “new style of commercialization,” meaning that InterDigital is ready to fly solo in its efforts to commercialize its solutions.
Standards-based research
Standards-based research is still central to InterDigital’s mission. Merritt is excited about his new leadership here. Dr. Byung K. Yi is the company’s new chief technology officer and head of InterDigital Labs. He is a former assistant division chief of engineering at the FCC, and before that he headed LG’s North American research and development center. “Bringing K. Yi on board allowed us to put some really strong leadership on top of that standards-based research team and free up some other people to pursue those commercial initiatives,” said Merritt.
Merritt values what he calls the “virtuous circle” that is created by standards-based research when it leads to patents that create economic gain for their developers, and those developers then invest more into standards research. InterDigital has a team of engineers that devotes 100% of its to standards-based research, working right across the street from a similar team of dedicated engineers from Qualcomm.
“People don’t fully appreciate the scale of the standards effort out there,” he said. “There’s a perception that the standards process is a couple of engineers and they kind of figure out what the next generation of phones is going to look like, and the cell phone makers have to go off and do the work themselves. It’s nothing like that. The standards engineering process is huge. The estimates are somewhere between $10 and $20 billlion a year on creating just the standards for wireless.”
What’s next
While Merritt sees M2M as the wireless industry’s “most exciting” area, he also expects commercialization efforts in other areas. “The next one I would expect is something in the network as a service,” he said. “Things that play on for example the FCC’s rules that are going to allow some type of premium service. You need technology to do that, to deliver that last mile of service in a better way. We’ve got a lot of technology in that space.”
“We’ve got a lot of different options,” Merritt said. “Basically the structure of the company will be to sort of incubate those options and then when they look real good, you spin them out.”
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