IP Acquisition Analysis

In July 2005, Maxtor Branded Products Group (BPG), a division of Maxtor Corporation wanted to determine the optimum means of attaining the intellectual property (IP) required to develop a remote access feature for its MSS product .  In particularly, Maxtor was trying to decide if it should develop the IP in-house or if it should aquire the IP  by purchasing a company that already held a patent for a remote access IP, Mirra.  Maxtor retained Sapere to select the best strategy for attaining the remote access IP.

Using a risk based approach to evaluate the three strategies, Sapere quantified the costs and benefits and identified and evaluated the potential risks for three strategies to attain the remote access IP: Build the IP internally; license 3rd party software on a non-exclusive basis; or acquire the IP exclusively from Mirra.    Using quantitative and qualitative tools, Sapere assessed the likelihood and potential cost impacts of uncertain elements or events in the project life-cycle of each strategy.  Sapere also identified mitigation approaches that should be implemented to minimize the potential impacts of the uncertainties. 

Based on the costs identified as a result of the risk analysis, Sapere determined BPG had the greatest potential of reaching their product goal (i.e., developing Remote Access for its MSS product) using in house development.  Sapere determined potential costs and risks associated with acquiring Mirra or using Mirra software would be too high for the potential worth of Remote Access to Maxtor.  Sapere’s analysis identified a “value” for Mirra to BPG, based on its remote access capability, of $1.5 to $3 M, but estimated the expected purchase price to be much higher.  Sapere identified an expected cost of $1.5 M cost to build Remote Access in house. 

Based on recommendation to build in house Maxtor initiated the software architecture of Remote Access is the underpinning of a defensible and new IP design for storage.