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Re: Danbury. Weby, thank you for responding. I hope that the board may be able to work together to get an understanding on this.
You said in a subsequent post (# 173590): “I suggest that we spend more time on understanding Wave's role or lack of role with Danbury because Danbury takes us back to the future. Whether Danbury forces the turn on of TPMs and Wave's key management software determines whether this stock turns around or whether it disappears in 2009. Breakeven is probably here, but it's not enough without TPM turn on and ERAS.”
You seem to be saying here that you see Danbury as the only viable path to getting TPMs turned on. Note in # 5 below that it doesn’t look like Danbury uses the TPM to store keys.
Back to your post #173581. I’m going to go through your post from the top with a few comments and questions.
1. GROBMAN INTERVIEW
-- You say, “If you want to join me on that quest, I suggest you start here.” Then you provide a link to an interview with Steve Grobman.
-- Later you say, “Take a listen to the podcast and think of Wave's level of skill at working with hardware encryption.”
A. That is the very interview that I transcribed my post #173546. That post was focused on the threat that Danbury poses to HDD FDE systems like Seagate/Wave because Danbury can be used by software-encryption vendors to do the encryption in hardware and also to save the encryption keys in hardware (though not in the TPM – see #5 below). Those software-encryption vendors are already at work with Intel.
B. So, are you saying that Wave will somehow be involved between Danbury and the software-encryption vendors? Or that Wave may develop an encryption solution for end users?
2. INTEROPERABILITY
You say, “Danbury in some ways defeats Wave because it functions as a go around to interoperability.”
A. The Grobman interview says this on the subject of interoperability. “Any of those manageability ISVs can execute this out-of-band unlock operation for scenarios where they need to get that machine on the network, but the actual core crypto capability can still be managed by a different vendor. So we make it such that all of the crypto vendors of the world don’t need to work with every single one of the manageability vendors and we solve this n x m complexity matrix that would exist otherwise.”
B. I don’t know if your statement referred to something like the above or to TPM interoperability or to something else.
3. REMOTE AUTHENTICATION
-- You say, “At the same time, it should increase the use of my oldest mantra REMOTE AUTHENTICATION…”
-- Later you say, “ERAS is all about remote authentication -- that's what eras means.”
-- Then, “Danbury is hardware to make remote authentication a hardware thing.”
A. So Danbury is promoting authentication? It would be helpful if that aspect could be clarified.
B. (As an aside, you probably wrote the second statement in haste. As I’m sure you know, ERAS stands for Embassy Remote Administration Server. Maybe you were referring to EAS? Or possibly both of these products working together?)
4. APPLETS NEEDING KEYS
-- You say, “It should increase … the need for many applications to be used as applets needing keys to insure that the visualized applets interact and do not interact securely.”
-- Later you say, “…the old Embassy I concepts of applets and key management is still Wave's thing.”
-- Then, “Esign uses the keys. I have no doubt that as the system matures, Wave has other uses being developed (including WXP and secure delivery as opposed to TVTonic).”
This sounds like an important concept , but I’m not clear on what you are saying. Did you mean “virtualized”? Are you saying that Danbury will encourage the development of applets that use keys? Or that virtualized applications need keys more than other types? Or that Danbury will somehow keep applications and keys organized and separate? I’m not clear how Danbury is involved here.
5. TPM AND DANBURY KEYS
You say, “the iTPM is the key holder”
I think that Danbury does not use the TPM to store keys. See
http://communities.intel.com/openport/blogs/proexpert/2007/12/14/5-reasons-to-look-forward-to-danbury-technology
Feb 8, 2008 4:14 PM Andreas Kuhn
Would you mind giving us some in-depth information about the role of the Trusted Platform Module (TPM) within the "Danbury" framework and within AMT 3.0 ?
Feb 11, 2008 11:36 AM Todd Christ in response to: Andreas Kuhn
Hi Andreas - Danbury won't have interaction with a TPM, but rather utilize an integrated mechanism to control security access.
Hopefully you and the board will somehow be able to organize this subject and bring some clarity. Thanks for your efforts so far.
hasty469, I guess I could have been more precise. But all I really cared about was confirming that it was approximately a double from each original price.
I'm sure that the 8K is accurate and that one or both are somewhat over 100% as the 8K says.
tkc, I had the same question so I called IR.
They confirmed that the new deal is:
1. 100% over the old D series price for ETS on the D series (for as long as the D series is still sold) (so somewhere in the neighborhood of $.50)
2. 100% over the original E series price for E series sales (so somewhere in the neighborhood of $.90)
“Licensing Fees for a technology that is being adopted with Danbury and buy forces bigger than Microsoft and HP.”
Weby, since I am trying – with a recent post – to get a handle on Danbury, could you explain this sentence from your post, or give more detail?
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=34227981
Thanks very much.
1260, thanks very much for responding.
“I have been told that Wave is involved and is providing a solution for a number of pilot customers at the present time.”
I know that Wave was developing some kind of “broad support” for Danbury per the Q2 cc. The addition of pilot customers is interesting.
Do you understand “a solution for a number of pilot customers” to mean that Wave is providing some kind of application to end users? Or support to the software-based encryption vendors? Or support of some sort to other vendors?
Trying to understand Danbury
I had thought that Danbury’s encryption functionality would COMPETE with BOTH the software-based systems and the hard drive-based systems such as Seagate/Wave. And that Wave would be one of the enablers of Danbury-based encryption solutions and thus receive revenue from customers who adopted the Danbury-based solution. As I look into it, though,
1. It appears that Danbury is not meant to compete with the software-based systems. In fact, it actively encourages the use of software-based encryption products by working with them and alleviating some of the problems we’ve heard about like keys being insecure and difficulty in deploying software patches. And by putting the actual encryption function in hardware, Danbury may also improve the performance hit we’ve heard about, although neither of the pieces below mentions speed.
2. I’m not sure that Danbury is the basis of a complete encryption solution that Wave could “enable.”
3. I’m not at all clear about what Wave’s function may be in relation to Danbury, and whether any function that Wave might have would produce any meaningful revenue. Does Wave in any way provide functionality between Danbury and the software-based encryption products?
I haven’t posted about this before, but the Intel whitepaper that JKIRK found brought it to the front burner, as Danbury might explain why Intel would be perfectly happy to deploy software-based encryption. 1) With incorporation of the Danbury functionality going forward, software-based encryption might be an attractive encryption solution. 2) Intel could use themselves as a business case for their Danbury product.
MY UNDERSTANDING IS FAR FROM COMPLETE. I HOPE ONE OF THE TECH EXPERTS MIGHT BE ABLE TO CLARIFY SOME OF THIS, ESPECIALLY IF I AM OFF BASE HERE.
The first piece below is a transcription of a December 2007 interview with Steve Grobman, Intel’s Director of Business Client Architecture. I included the whole thing because it not only talks about Danbury, but gives a nice rundown of the progress of vPro and the philosophy behind it.
The second piece is an article from infoworld, also from December 2007.
http://www.podtech.net/home/4797/vpro-encryption-at-the-hardware-level
JL: It’s Friday, December 28, 2007. This is Jason Lopez of podtech.net. One of the biggest debates in the IT worlds is how much of an impact software has on a company’s profitability. Experts know there is one, but measuring ROI can be nearly impossible in many cases. Over the past five years there has been new thinking about the role of hardware, which has a real presence physically and can be measured in terms of real costs. Formerly just a dumb device in which the smarter software lived, microprocessors are being enabled with embedded software that can act on its own or help operating systems and applications run more efficiently.
I talked with Intel’s Steve Grobman, who heads up Business Client Architecture at Intel.
SG: What we’re really trying to do is incorporate technology into the platform that solves business problems so that the problems that the IT guys have that are fundamentally difficult to solve with software-only solutions. So every year we’re incorporating new features into the platform that are targeting different sets of problems, and we’ve started this in 2006 and will release new capabilities every year.
JL: What are some of the major updates that have occurred since 2006?
SG: So if you look at our initial launch in 2006, we came out of the chute with really two sets of technologies in vPro. We had our Active Management Technology, which was all about enhancing manageability. So there’s been software manageability forever, but what we found is about 20% of the problems that really weren’t able to be solved with software manageability, we could solve by putting new management solutions in hardware. And that’s what AMT is all about. So for those 20% of situations where you just couldn’t solve the problem in software and traditionally would need to send somebody physically out to the desk to fix the problem, we can now resolve a very large portion of those with this Active Management Technology and actually save IT in general about half their cost of management from what they had prior to having the vPro solution.
Additionally in 2006 the other big technology that we came out with was putting our virtualization technology into our CPU. This is the thing that changed the underlying x86 architecture to make it very clean, very efficient, to virtualize software on top of the PC.
And then what we did is on 2007 we built on both of those technologies, so we did things such things as in Active Management Technology we made deployment easier by introducing some new deployment scenarios and technology that helps with the deployment of AMT. We also moved to some new standard protocols such as what’s called WS Management. This allows industry standard protocols to be used to interact with this AMT environment. And then on the virtualization side we added our Trusted Execution Technology that allows the secure launch of a VMM as well as what we call our VTD technology, which allows things such as device assignment.
JL: Well now in 2008, another codeword from Intel, Danbury. What does that mean?
SG: We are super excited about what we’re going to be doing in 2008. It’s a technology that right now is codenamed Danbury. And it’s an integrated encryption solution that’s taking storage encryption technology and integrating it into the vPro platform, but we’re doing it in such a way that it not only enhances encryption solutions that exist by making them more secure, but even more important is making these solutions manageable such that IT is able to have an easier time of deploying encrypted solutions into the environment, managing encrypted solutions when they’re actually deployed, and in some cases giving end users a better experience when they need to interact with these encrypted systems. And I’d be happy to walk you through some examples of all three of those key aspects of the Danbury technology.
JL: Well let’s go through Danbury, lets find out more about this technology and how it will impact the IT administrators’ life.
4:57
SG. Sure. So the first kind of core thing with Danbury is we do move the actual encryption operations into hardware. And this does a few interesting things. Number one, it makes it such that those sensitive operations are no longer running in software so various forms of software attacks can’t access those critical operations. So this is something that resonates very well with IT, and one of the reasons that IT has been looking at hardware-based encryption for a very long time. The other thing that it does is it makes the solution, the operating system, and virtualization agnostic. Since the actual crypto operations are happening below all of the hardware, if there are things like operating system updates or service pack updates, or you want to run all sorts of interesting operating systems, you can do that. And because it doesn’t require device drivers to interact with the encryption system, it all just kind of magically works. So that’s the first big thing that’s part of the Danbury technology is we get some inherent benefits by just where we do the crypto, and doing it in hardware is really the best place to do it.
JL: Steve I have a question for you that is around this idea of the nature of software and hardware over the past ten years because it seemed a while ago hardware was on its way to becoming a very cheap commodity, and it was the software that was going to be the thing that people were really seeking. I remember someone saying, “Yes, there’ll come a day when you buy almost any program and you get a free computer with it.” But we’ve seen over the past three or four years how some pieces of software kind of run their course or at least have come to a point where people are saying, “How much more power can you put in that spreadsheet program. Or how much more power can you put in that document program.” The power’s now coming from the hardware side. And something that we hardly predicted in the IT world ten years ago. I wonder if you could comment on this.
GB: Sure. It’s a great question. And I think part of it is at Intel we’re fundamentally looking at the role of hardware differently. In the past I think traditionally it’s been about how can you simply make the hardware go faster. And what we did with things like vPro is we took a step back and we said, what software’s really doing is it’s requesting the hardware to perform functions on its behalf. And there’s certain types of operations that are inherently difficult or impossible to do in software only, but by providing some of those building blocks and _____ services in the hardware we can not only make the hardware more valuable but also enable the software to have a richer set of functionality. So you’ll see this in situations both with manageability with what we did with AMT as well as things with Danbury.
So in the case of Active Management Technology, you’ve been able to use software-only capabilities to do things like allow an IT guy to remote control a user with software-based remote control. But what if that user has a problem with their BIOS? Right? Because you can’t get software up and running when the BIOS is executing, the BIOS screen STREAM? configuration is running, IT would be out of luck in that scenario. What we’re been able to do with AMT is put functionality such that even if software’s not running you now can still remote-control that machine in various scenarios such as when they’re using the BIOS. Or in a situation where the machine is completely broken, it’s just in a continuous state of blue screen and IT has made the decision that they just want to rebuild the machine, we have technology in Active Management Technology where they can remotely boot the machine to a network image and get the user back up and running without trying to walk the user through a complex set of installation steps.
10:00
Very similarly with Danbury, it s a very similar paradigm where there are tons of great full disc encryption products on the market today, and we see the opportunity to make those products better. Right? So make it easier for IT to deploy those products by allowing them to patch these machines, by giving their end users a better experience. A good example is with many of the products on the market today that do encryption if a user forgets their password and needs it to get back on line, they’ll go through a little skit with the IT guy where they’ll say my mother’s maiden name, and my first car, my pet. And they’ll answer all these questions to prove to the IT guy that they really are who they say they are. And the IT guy will at some point figure out all right it really is Josh on the other end of the line and they’ll read you over the phone a very long sequence of numbers or letters that you go ahead an physically type in. But you could be in a noisy environment, in an airport. There might be language barriers or accent barriers between Help Desks in different regions and the end user. And by having an ISV utilize our Danbury technology, it would let their IT guy go through the same verbal set of confirmations to prove that it really is the right person on the other end of the line but then instead of reading them this very long string of numbers and letters, they could simply right click in the ISV’s console on the machine and say, Allow Unlock. And so to the end user it’s an infinitely better experience than what they have today. But it’s simply making those products better, not trying to replace the software products that are on the market. And that’s really the philosophy that my team uses is, “What can we do in hardware that fundamentally gives the software guys new opportunities to have better products than what they can do with the facilities software has access to today.”
JL: What are some other things that Danbury promises for the IT staff?
GB: So one of the big things that I talked a little about is the out-of band unlock feature. It’s interesting from a few aspects. Number one, it does allow IT to perform that unlock operation to do things like patching, but it also can make it such that multiple authorized software entities are able to perform that operation. So if IT chooses an encryption software package from one of the full disc encryption vendors but it’s using a manageability solution from one of our Active Management Technology manageability partners, you know Altiris, or SMS, CA, HP Open View, you know, just as examples, there’s a big long list of partners that we’re working with on the AMT side. Any of those manageability ISVs can execute this out-of-band unlock operation for scenarios where they need to get that machine on the network, but the actual core crypto capability can still be managed by a different vendor. So we make it such that all of the crypto vendors of the world don’t need to work with every single one of the manageability vendors and we solve this n x m complexity matrix that would exist otherwise.
The other really interesting thing about this is we can make it such that different classes of users are able to perform operations that need to happen fairly frequently, such as unlocking a machine in order to patch it, without giving those users the full access to recovery keys that would generally only need to be used only in very rare disaster scenarios such as if the motherboard or chipset itself was damaged and you needed to pull the drive out and recover it on a different machine. So the way that we can facilitate this is part of the Active management Technology and Danbury architecture can utilize enterprise authentication and authorization protocols like Kerberos and specifically the Active Directory security paradigm around Active Directory group membership. So if there’s a specific group in Active Directory that IT wants to use to grant a certain set of users privilege to perform this operation – so if there’s a Intel Remote Drive Unlock Operators and somebody should be a member of that group today because that’s part of their job. If they go and get another job tomorrow where they no longer need that privilege, they can simply be removed from that group in Active Directory and no longer have access to unlock those drives, and IT hasn’t needed to touch all of the machines in the enterprise in order to make that happen.
JL: Steve Grobman is the Director of Business Client Architecture at Intel. This is podtech.net. I’m Jason Lopez.
http://www.infoworld.com/article/07/12/10/Intel-adds-encryption-to-VPro_1.html
Intel adds encryption to vPro
Embedded security features, code-named Danbury, make application encryption easier, add new layer of hard drive protection
By Matt Hines
December 10, 2007
Intel is preparing to introduce a new set of security features in its next-generation vPro microprocessors that have been designed to extend the reach of encryption applications and make the systems easier to install and manage.
Built under the code-name Danbury, the embedded security features -- planned to be introduced in the second half of 2008 – promise to improve the efficacy of commercial encryption tools via onboard integration hooks for the programs, and by adding a new layer of hard drive protection when vPro-powered computers are asleep or otherwise powered-down.
According to Intel officials, the addition of the Danbury technology will also make it far easier for organizations to put encryption applications into place by directly addressing the common headache of key management within the new embedded security tools.
Many companies that have already installed encryption software on their computers are still struggling with key management, and, even worse, most fail to realize that the applications do not protect hard drives unless the machines are fully powered-up -- creating an attractive vector for attackers and giving those organizations a false sense of security -- said Steve Grobman, director of business client architecture at Intel.
Even those computers carrying today's full-disk encryption tools remain vulnerable to attack when they are in hibernation and stand-by mode, he said.
That fact proves even more troublesome as so many companies are using encryption software as a means to safeguard sensitive data on their machines and meet compliance regulations, especially in the case of computers that have been stolen and had their authentication systems bypassed.
"Companies want to utilize full disk encryption to better protect their data, but commercial software products are hard to deploy and still leave many ways for machines to be attacked," Grobman said. "By putting certain aspects of encryption into the hardware, versus using only software-based systems, we believe we can make encryption easier to deploy and manage, while addressing those remaining vulnerabilities."
Rather than pitching the Danbury tools as an alternative to commercial encryption applications, the features will serve to augment software products made by companies including Credant, PGP, Pointsec, Safeboot and Utimaco, according to the Intel product engineering leader.
All of those firms have already partnered directly with the CPU manufacturer around the upcoming release to build hooks in the chips to integrate with their own encryption software systems and allow customers to take advantage of the Danbury capabilities, he said.
"By taking certain sensitive operations and putting them directly into the hardware, such as by moving the keys into the chipset, we are making these encryption systems easier and more practical to get up-and-running," Grobman said. "This isn't an effort to compete with encryption software makers but rather to help customers see better implementations of their tools; we believe that these new features should actually have a positive effect on the entire encryption space."
The addition of the Danbury tools represents only the latest in a string of security and management technologies embedded directly into the vPro lineup by Intel, including the company's Active Management Technology (AMT), which is aimed at making it easier for administrators to do remote updates on corporate machines, such as for installing anti-virus (AV) updates or operating system (OS) security patches.
Earlier this year, Intel also announced new features that extend malware behavior-detection further onto the CPU level and wall off virtualized software systems from attack, along with new tools meant to help desktops communicate directly with so-called network access control (NAC) systems, which are used for device configuration monitoring and network authentication.
In another nod to extended management capabilities, the Danbury features will also provide IT organizations with the option to gain remote access to encrypted machines to patch them -- without any interaction on the part of end users, Grobman said, and give administrators the ability to set parameters for implementation of encryption applications using Microsoft Active Directory.
Companies that have already installed encryption programs often find it a time-consuming process to help users who forget their computer passwords regain access to their machines, Intel executives claim.
And whereas administrators of encrypted machines are often forced to decrypt entire disk drives to perform tasks including operating system updates today, the new vPro features will eliminate complex software processes that make for such arduous work, they promised.
With a growing number of regulatory mandates requiring companies to encrypt the data stored on their computers, and large numbers of high-profile corporate data breaches splashed across the headlines, many companies have moved to deploy the systems and subsequently found them too unwieldy to employ on a broad basis, said Malcolm Harkins, general manager of Intel's Information Risk and Security Group.
The fact that today's encryption systems don't provide full-time disk protection, as many users think they do, has even led Intel itself to delay broad use of the technology, he said.
"We have not moved to deploy full disk encryption simply because we didn't feel it was worth it to spend millions of dollars to add technologies that wouldn't provide sufficient levels of defense," Harkins said. "I don't think that many companies that have already installed encryption software realize the shortcomings, and that by putting their faith in these tools they may actually be increasing their overall risk."
Harkins pointed out that companies using existing encryption tools may also run afoul of e-discovery regulations if users have data stored on machines that cannot be accessed centrally by administrators, such as in the case of a lost or forgotten password.
"When you start looking at the legal implications with these regulations, you realize that there are also some additional risks that these companies may not be aware of," he said. "People are adopting encryption as a solution to some of these problems, but they may be creating additional problems for themselves in the long-term."
Matt Hines is a senior writer at InfoWorld.
This fellow may have an agenda, but his complaint does explain a puzzling statement in the last cc around the 1:15 mark. Steven’s statement implies that people have been complaining about the TPM user interface.
The questioner asked, “I'm not talking about the industry now because the industry has shipped millions and millions of TPMs and Wave [?] may have done quite a bit to set the table for Wave. So now I'm asking is what specifically does Wave Systems need to do better to close business that helps the company and the shareholders?”
After saying that Wave needed to generate case studies, Steven said, “I would say secondly is a technology piece, and some of that is just based on the continued investment in this technology. And I think we have to be balanced in our approach on that, which is to make it easier to use and to turn on a TPM for everybody at large. I don't think it's that complicated, but clearly it's more complicated than people would like to see. And so, we have to continue to work on improving the quality of interfaces, improving the quality of the experience in turning on your TPM.
It could be a combination of
-- orders in the pipeline mentioned in the October order PR
-- the company not having completed the switch to other devices with some patients
-- the company not even planning to switch to other devices with some patients
This is from the most recent 10Q, note 9:
“The Company may request that patients voluntarily return devices which were the subject of the settlement, but the Company is not doing so if the return of the equipment would interfere with the treatment of the patient.”
http://www.sec.gov/Archives/edgar/data/846475/000107997408000978/zynex10q93008_111908.htm
awk, I’m sure you also heard it confirmed in the Q3 cc.
“One of the important characteristics that's changed in the E-Series platform is that Dell now has an enhanced security hub that includes not only the Trusted Platform Module functionality, but the interfaces to all the other security devices.
“And one of the reasons why this really enhances the security of the Dell laptops, as an example, is that for example your biometrics, when you scan a fingerprint, those fingerprint matches actually take place inside this new security hub chip. That ensures that that data when being compared can't be actually compromised. It also provides enhanced interfaces for smart card and Contactless cards…[info re Boston Metro card]….So in this way you can actually just wave your ID card in front of the machine and it would log you in all the way from pre-OS, up through your Seagate drive, or up through Windows to your operating system.
“We have been the only supplier of software for this new platform. This is a new capability that is unique to Dell. We're very pleased to be working closely with all the vendors who are involved. It has been a multi-party effort to bring these capabilities to Dell. And Wave played a very significant role in that.
“You can find all of this functionality in E-Series platform under an interface called Dell Control Point, which actually integrates communications and security and a number of the other devices within your machine so that you have a single interface to find all of this functionality.”
Wildman, this video can be found in the “Breakthroughs” channel after clicking on the “+” icon in the lower right corner of cslewis’ link. It’s #6 out of 31. If you right-click and then click on Properties, each video has a date associated with it in its URL and it looks like the newer videos are added to the front of the group. The date associated with this video appears to be November 11, 2008.
I also think that what Steven said is an indication that this video is probably recent. I thought his growing frustration at the recalcitrance of IT people was evident – I almost expected a big sigh at the end. When the Seagate drive came out I don't think he was saying anything like “now the challenge is to get them to use it.”
And I agree that Intel thinks highly of Wave’s products. The use of Wave’s software by so many large OEMs is a good indication of the quality of Wave’s work.
Short Intel Video on TXT.
Here’s another interesting Intel video. This is on Trusted Execution Technology. It’ in the Embedded video channel.
http://video.intel.com/?fr_story=1651d8f4c2b7621f82e7256f90f076d76dbf087b&rf=bm
I found it by going to cslewis’ link and clicking on the “+” icon in the lower right corner.
The speaker identifies himself only as Peter, a platform architect with the Embedded & Communications Group. He’s diagramed the basic TXT logic flow, which includes the TPM.
Also, about halfway through he says, “Although Trusted Execution Technology is appearing first in the corporate desktop environment, it also has a lot of applicability in the embedded space. For example, we’re working closely with the National Security Agency and they are validating Trusted Execution Technology hardware and software for their High Assurance Platform program.”
Thanks, cslewis. I transcribed it in order to get a clearer picture of who these people are and what they’re saying.
The Scott-Page industry analyst’s (last fellow) comment seems the most interesting, as he clearly recognizes the need for hardware security. Also interesting is Glendinning from Intel, who may be implying they’ll be doing more.
The first two people are merely saying they’re surprised Intel is adding security to hardware, and the third says he’s surprised but it makes sense.
I can’t say that I find Steven’s comment very encouraging. Essentially he seems to be lamenting the ongoing difficulty of getting IT people interested in hardware security.
Title: Is Intel a Security Company?
Fadi Nasser
Director of Marketing
VirtualLogix
Intel is not traditionally known as a security chip provider. Yet if you look at the latest offerings from Intel, especially with the vPro and the security features on that chip, it’s certainly evident that Intel is moving in that direction.
Sheila Drosky
Director of Product Management
CREDANT Technologies
When you think of Intel you think of hardware and you think of speed and you think of very trustworthy solutions, but I don’t think you traditionally think of security.
Brett Twiggs
Manager of Strategic Alliances
LANDESK, an Avocent company
I’ve never really thought of Intel as a security company, but it does make sense where they can incorporate some things down into the chipset in a hardware level which makes it to where people can’t turn them off, find ways around them, and circumvent different devices that are put into the O/S or into software, and so it makes it that much more secure. So it makes sense.
Duncan Glendinning
Principal Engineer/Architect
Intel Corporation
Our platform model is maturing even further. So now design for security is a key ingredient in our systems and our products. And clearly Anti-Theft Technology for data protection, for platform protection, are two key examples of what we’re trying to do in this space.
Steven Sprague
CEO
Wave Systems
It’s a natural evolution for security to be a very core component for Intel. Now the challenge is for the global IT infrastructure to use it.
Peter Kastner
Industry Analyst
Chief Research Officer
Scott-Page
The only solution to the bad guy software is in hardware. And that’s why Intel, primarily to date through the vPro technology, is becoming a key ingredient to solving the security problems.
Cutting Permit Review Time for Grid Projects
A meeting was held today at the National Governors Association in Philadelphia between President-elect Obama, VP-elect Biden, and a lot of (all?) governors. I gather that it was set up on fairly short notice, and the idea was to get the governors’ input on the upcoming stimulus package. I think the governors were surprised and happy at being consulted. After the meeting the governors held a press conference, which was shown on C-SPAN. This was one exchange:
Governor Ed Rendell of Pennsylvania: One of the things we need to do and we made this clear to the – Governor Culver made this clear and I don’t know if Chet’s here. Chet, why don’t you talk about the grid problem that you addressed to President Obama because that’s a huge problem that affects all of us.
Governor Chet Culver of Iowa: One of the topics that we touched on was securing our energy future and taking steps that will allow us to maximize our potential. One of the real challenges in the Midwest and in other parts of the country right now is transmitting or moving the power that we generate. And so one of the things we’re focusing on is building our grid, and right now it’s not efficient. It’s very tough to get new projects onto the grid. And in Iowa and the Midwest we have an opportunity to do billions of dollars worth of projects within a 500-mile radius but we need that infrastructure to be built out and we need to cut through the bureaucratic hurdles that are now standing in our way in terms of making those projects – getting those projects on-line. It’s not only wind power but it’s solar as well. And the President and Vice President-elect were very responsive to including – taking a hard look at the infrastructure related to railroad and grid.
Reporter: What regulations are you talking about that have to be rolled back? Are you talking environmental regulations?
Governor Rendell: It’s a whole host of regulations, and we’re not saying that the regulations themselves need to be rolled back, but we’re saying that the permitting process, the review process, can and should be speeded up dramatically. There’s a big difference between eradicating a regulation and just making sure that it’s speeded up to cut the time lag dramatically.
WXP. Maybe it would help to see what he actually said in the CC. Or maybe it wouldn’t. Sounds like they’re getting close to the end – maybe – but is the end investment into it, acquisition of it, or "something else”?
25:40
And finally, and then I’ll open it up for questions, let me talk a little bit about Wavexpress. When we had our last conference call I believe it was just at the beginning of the Olympics. We had a very successful Olympics. For anybody who watched the Wavexpress coverage of the Olympics, I think everybody was impressed with the quality and capability that team was able to deliver. We continue to have a great relationship with Microsoft on that front and we’re looking forward to the Wavexpress team doing additional events.
Having said that, we have been actively in the market seeking external investment into Wavexpress and/or the potential acquisition. We have a number of paths that we are pursuing in the marketplace today. There is certainly no assurance any of that will come to ground, but we are getting very close to the end of that process.
We have to both manage our expense side as well as manage the opportunity side, and this is one where I think we have tremendous opportunity but it is somewhat peripheral to our core business. And so to that end we are in discussions with a variety of players but I certainly have no assurance at this point in time that I’m going to necessarily close a transaction any time soon. So we’ll see how that continues to progress. I know that’s not definitive data for everybody today. I would like to have more definitive data than that. As we make the decisions around that to pursue the different opportunities that are presented to us we’ll certainly communicate them out to everybody.
So it is a tremendous platform, we have tremendous partners. We have some very strong off-shore interests in the platform as well. And I think all those pieces are helping us together to drive it towards a transaction. But I have to balance that with the amount of time it would take to execute the transaction. So we’re in the middle of that process right now.
47:50
Q&A
Q. Just a follow-up on WXP. Do you think that will be done by the end of the year, one way or the other?
SKS. One way or the other, for sure. I would say sooner than that. We’re - they’re already passed my internal deadline. So. I would have liked to have been done by now. And I still have a range of opportunities that are sitting on the table which say it’s worthwhile to not just walk away from those opportunities. Having said that, they’ve got a fairly finite time to determine whether we’ll see investment into it, acquisition of it, or something else.
cslewis, hnstabe, re FDE drives sold.
1. He said “under 20,000” not “120,000.” These words sound similar and I also originally thought he said 120,000, but if you listen again you’ll hear that he repeated the questioner’s words “under 20,000.” [See transcript below.]
2. I think he meant 9.000-12,000 drives for all of Q3, not per month. If drive sales had jumped up to 30,000 this quarter you can be sure we would have heard about it. [Again, see the transcript below.] As it is, the trend upward is very, very slow: under 10,000 in Q1 and Q2, about 10,000 in Q3.
3. In reviewing Steven’s confusion on this, it finally dawned on me that he stumbles around with these numbers because he probably is not interested in them at a detailed level. He knows the ballpark figures, he knows the trend, and he’ll know when big numbers start to kick in, but he couldn’t care less about the specifics of whether it’s 6,000 or 7,000 in a quarter. That’s OK for his role as CEO, but not for earnings conference calls if he’s going to do them solo. Has anyone ever tried to direct a question to Feeney?
4. What he is interested in is the large number of companies that have bought a few drives. There were over 1,000 to date back in Q1 [See the Q1 exchange about this below.] and an “incredible list” in Q3 and also in Q2. But now I wonder if he/we should start being concerned about whether any large percentage of these companies is going to buy FDE drives in quantity any time soon. Q1 was four to eight months ago for the 1,000 Q1 companies. Where are their follow-on FDE orders? Dell sold under 10,000 FDE’s in Q1, probably still under 10,000 in Q2, and about 10,000 to 12,000 in Q3. If Q4 isn’t better, and since Steven has said that he believes this is an important metric, it might be a good idea to ask questions about this on the cc.
Q3 TRANSCRIPT RE # OF DRIVES AND UPGRADES
About minute 65.
Q. OK. Fine. And the other question was, just curious. The Seagate FDE drive with Wave – how many units were sold in Q3?
SKS. I think it was 3 – between 3 and 4,000. [The question was about drives. This is his answer. Then below he says, “I’m thinking by month.” ]
Q. 3 and 4,000? Units?
SKS. Just - yeah.
Q. Basic units.
SKS. No, no, I’m thinking by month. I’m not thinking – ahhhhh. So, so let me clarify because I’m getting confused between two numbers. [Now he starts to talk quarterly.] So our enterprise seats I think were between 3 and 4,000. Drives were about three times that. [ He was confused apparently because the monthly drive figure was approximately equal to the quarterly upgrade figure.]
Q. OK. So about 10 – because last quarter you had said it was under 20,000. Does that mean it was less this quarter than Q2? [Clearly the questioner believes Steven is talking 10,000-12,000 drives for the quarter.]
SKS. No, the volume has continued to rise. I think it was under 20,000 to date. [See the Q2 exchange below.] But – the volume has continued to rise and what continues to be true and was true last quarter is that there’s an incredible list of companies who have bought a few and they’re in essence trialing the technology.
THE Q2 EXCHANGE RE ‘UNDER 20,000”
[Maybe Steven meant under 20,000 to date, but that wasn’t the question.]
About minute 40.
Q: And with regard to Seagate drives, do you have a number on how many drives were put with the Dell machines this current quarter?
SKS: Yes. It's under 20,000.
THE Q1 EXCHANGE RE 1,000 DRIVE CUSTOMERS
About minute 27.
Q: Okay. And in terms of seats in the first quarter, so we can get a good baseline when you report second quarter. What were the number of seats, and if you care to offer how many seats have you gotten to date so far in the second quarter?
SKS: So I don't think I can quote off the top of my head the number of seats for second quarter. We've seen a couple thousand seats in first quarter.
Q: Okay.
SKS: It's probably a little bit less than that, in upgrade seats. And again, most of it is pilot-based volume. So, a typical customer order here has typically been 10 to 20 drives and the Enterprise business to go along with it. And we've seen then, reorders from those organizations that start to drive then interesting volume. [Did these reorders stop?] So in many aspects I've become much more interested in the total number of new Enterprise customers. So to date it's been well over 1,000 Enterprise customers. If you assume each Enterprise customer is good for 1,000 to 2,000 seats on average, because some of them are really big, and some of them are small, then that's a couple million unit potential that's out there piloting the technology. If we could just convert that in the next twelve months - uh, no problems, right? I mean, you know, that's $100,000,000 worth of business.
[Very hard to understand. Where are these companies four to eight months later? Were these companies really trialing the technology or could they have bought FDE drives in error thinking they were just buying the newest Seagate drives? We’ve been told that once people see the drives in action that they love them. What is Wave doing to track these companies? etc. ]
tkc, I agree. Wave should volunteer this information and not wait to be asked. Also, when they are asked they should be able to give an accurate and precise figure. I was astonished that Steven did not know the precise figures and seemed to be so out of touch on the subject that he couldn’t remember what he was talking about.
But I think the fault also lies with us in that we are remiss in not asking these questions on the cc. If Robert hadn’t asked for the FDE number – and gotten the upgrade question answered in the confusion – we wouldn’t even have that estimate.
I did my first question-asking on this call. Hopefully I got over the butterflies, made my mistakes, and will do a better job next time.
hnstabe, maybe looking at the accounting entries will help in understanding Deferred Revenue. Unfortunately, Wave is not hiding millions of dollars in cash from thousands of unannounced upgrade sales.
CASH SALES THAT APPEAR AS REVENUE
Increase Cash (on the left side of balance sheet)
increase Income (on the right side of balance sheet)
The revenue is recognized (as can be seen by the entry to Income), the cash is received, and the transaction is done.
CASH SALES THAT APPEAR AS DEFERRED REVENUE (upgrades)
Increase Cash (on the left side of balance sheet)
Increase Deferred Revenue (on the right side of balance sheet)
As the revenue is recognized:
Decrease Deferred Revenue (on the right side of balance sheet)
Increase Income (also on the right side of balance sheet)
Now the revenue is recognized in the Income account.
SALES FOR WHICH THE CASH HAS NOT BEEN RECEIVED YET
On sales where the cash has not been received, just replace the Cash account above with the Accounts Receivable account.
Then when the cash is received:
Increase Cash
Decrease Accounts Receivable
The receipt of the cash has no effect on the Income account or the Deferred Revenue account.
If all of the $462,000 was upgrade revenue, you would simply divide $462,000 by the price per upgrade:
$462,000 / $60 = 7,700 upgrades
Steven said upgrades were only 3 to 4,000, so we know there were other things in the deferred revenue. Maybe part of the eSign transaction is in there along with some other development payments.
Steven told us the number of upgrade units in Q3.
In the CC, Steven told us how many Q3 upgrades there were, thanks to Robert Isler at about 65 minutes into the call.
Q. The other question was, just curious. The Seagate FDE drives with Wave – how many units were sold in Q3?
SKS. I think it was 3 – between 3 and 4,000.
Q. 3 and 4,000? Units?
SKS. Yes. Basic units. No, I’m thinking by month. I’m not thinking – ahhhhh. So let me clarify because I’m getting confused between two numbers. Our enterprise seats I think were between 3 and 4,000. Drives were about three times that.
So Q1 was a little less than 2,000.
Q2 was 92% higher = about 3,800.
Q3 was between 3,000 and 4,000.
Sounds like we can expect a CEO soon
From today’s PR:
“The third quarter marked the company's seventh consecutive quarter of profitable growth. Given this consistency together with our tight cost control discipline that has led to a strong and growing balance sheet, we are attracting high powered executive talent and noteworthy distribution partners. Our company has never been busier with meaningful growth opportunity," commented Lord Steinberg, executive chairman of Electronic Game Card, Inc.
tkc, cslewis, pardon me for jumping in, but Steven did a pretty good job explaining this in the CC.
First is Feeney in his opening remarks. He doesn’t explain the reasoning, but he does explain the terminology we’ve been using (“net billings”).
Then Steven, in the Q&A section, gives a clear explanation of the reason for it. (Personally, I think it is ridiculous, but what do I know? All we need is confusion about revenues. Presumably it was the auditors who came up with the idea.)
minute 2:06
Feeney:
Something different that we’re going to start to break out in the quarterly reporting and press releases, we’d like to discuss something referred to as “net billings” for the period. And consistent with our revenue recognition polities as outlined in the company’s 10K that we filed – and there will be a little bit of writing on this in the PR that went out – as software upgrade sales grow we should expect to see net increases to our deferred revenue in the balance sheet. Although we are able to bill and collect cash upon shipment of these upgrade orders as we receive them, the company will continue to recognize revenue for these upgrade orders ratably over the maintenance period, which is generally over 12 months. So in line with this, as you get the financial reports, you’ll notice that deferred revenue at June 30th increased by a net of $233,000 as compared to the balance 90 days ago on March 31, 2008. Accordingly this term “net billings” for the second quarter was approximately $2,218,000. And this is the sum of recognized net revenue of 1,985,000 for the period plus the net change in deferred revenue since the March 31st period, and that amounted to $233,000.
Q&A
about minute 28:00
Collins:
Excellent. I wanted to ask you to give a little bit of color if you could on the Enterprise upgrade sector. Your deferred revenue rose to 589,000. I assume that that's record deferred revenue for you. And it rose 233,000 to 589. And so I was curious. If you book an Enterprise upgrade, which I guess is about $50, if you book it in a quarter do you get a quarter's worth of revenue out of it? Or do you just get a month or two and then how hard is it to, what do you actually have to do to get an Enterprise sale into the deferred revenue category? And I guess finally probably everyone would like to know, what does your pipeline look like for the next quarter?
SKS:
Sure. So the way the mechanics work is a customer places an order for 20 units. That order comes through the, for example, Dell channel and eventually hits our order desk here. That process is almost immediate. Once we receive the order then we actually can fulfill a license to that company of the server license. Upon fulfillment of that license, we in essence book the sale. And so to that extent you consider it as the purchase order has been completed and we can bill the customer for the sale. So if it's a $10,000 transaction, we bill for $10,000. It may take us some period of time to collect, although most of this happens through a channel, so we're paid on a sort of 30 to 60 day basis by the channel. So actually the receivables are pretty good on this.
Collins:
So I guess you…
SKS:
That's the cash in the door. Now, how accounting – typically those sales have associated with them a license to the software and maintenance. And maintenance is typically a 12-month contract. And so what happens is today the accountants are saying, “Look, we don't know how much is really the pricing of the license and how much is the value of the maintenance. Maybe you offered this guy more pricing on a per piece of software and less on maintenance or vice versa” because they can do it that way. And so what accounting would like to see is consistency that they're always the same ratio. And until that solidifies to always the same ratio, then they want us to actually realize the revenue on the slower of the two. So maintenance is always recognized over 12 months, because if somebody pays $10 a seat in maintenance, or let's say $12 a seat in maintenance to use easy math, then we don't actually fulfill that contract of maintenance until the twelfth month. And so they say, “Okay realize $1 each month of that maintenance.” And so today, the conservative approach to this is to take the whole package and say, “Just treat it as though it were maintenance, and realize it on a proportion basis over twelve months.”
So that's what we're doing. We think it's the right conservative effort to do. Eventually we should reach a point where the pricing isn't really fluctuating at all – and it doesn't fluctuate very much today – isn't fluctuating at all, at which point you should be able to shorten the cycles and realize the revenue over a shorter period of time. But at least for the current foreseeable future, the next few quarters, or year or so, we would expect it to be realized in a similar basis. You really want to look at both, because you might look at it and say, "Oh they didn't even sell $2 million worth of stuff." Well in reality we received cash in from more than $2 million worth of stuff, 2.2+ this quarter.
Hi tkc,
SBC = stock-based compensation
Sometimes with these long posts I expend so much effort organizing them that I forget to highlight basic points.
In that post I wanted to do two main things:
1. I wanted to confirm your calculations by showing the running total of cash on hand. I should have specifically mentioned that the $3.88 million figure was right in line with your low figure of $3.9.
2. I wanted to highlight the idea that a one-time event such as the Olympics might explain the large number that the PPs imply. In that case a similar growth pattern going forward should not necessarily be expected. The 10/31 424B5 still says, “We estimate, based upon our current forecasts, we will need to realize no less than $6,400,000 from a combination of revenue growth, expense reductions, commercial or strategic transactions and/or additional financings, to continue as a going concern for the twelve-months ending June 30, 2009.”
tkc, I was fooling around with those numbers, too. I produced a running total of cash-on-hand covering July through October based on the PP’s. This was to confirm the level of cash they had to be bringing in from other sources. That table is at the bottom of the post.
As you point out, the most important assumption is the amount of cash needed. The only thing that I think is a bit off in your analysis is your cash usage figure for Q2, from which you derived your cash needed for Q3. Below, I think, is a better way to calculate cash usage. (It doesn’t include changes in receivables and payables, but I think gives a good picture of their actual cash needs.)
CASH NEEDED
Q2 Cash Used
SGA 4,243,656
R&D 3,145,326
- - - - - - - - - - -
7,388,982 (Your 7.4 million?)
COGS 239,576
- - - - - - - - - - -
7,628,558
D&A (88,222)
SBC (588,450)
CAPEX 16,870
- - - - - - - - - - -
6,968,756
ETS $ .25 4,700,000 1.175 Total ETS: 6,600,000 units, $2.030
ETS $ .45 1,900,000 .855
FDE $ 7.50 30,000 .225
Upgrades $60.00 8,750 .525 Total Upgrades: 13,750 units, $.825
One Semi-large Upgrade 5,000 .300
Bcom, STM, Intel .200
WXP Olympics .300
eSign .300
- - - - -
Total Net Billings 3.880
= = = = =
C-O-H
6/30 6/30 Cash from Cash Running
COH A/R PP’s Q3 Billings Spend Total
Jul 1 .146 1.503 ( 7/1) 1.649
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Jul 15 .470 (1.050) 1.069
Jul 30 .470 .075 (Upgrades) (1.050) .564
Aug 15 .772 ( 8/11) .825 (July Dell) (1.050) 1.111
Aug 30 .175 (Upgr + Bcom) (1.050) .236
Sep 15 .711 ( 9/12) .720 (Aug Dell) (1.050) .617
Sep 30 .211 ( 9/30) .675 (Upgrades + (1.050) .453
WXP Olympic +
eSign)
Oct 15 1.335 (Sep Dell)* (1.050) .738
Oct 30 .678 (10/31) .075 (Upgrades) (1.050) .441
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Q3 Net Billings: 3.880
From WAVX bd: Economic outlook bright for biometrics, ID card industries
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33186553
http://www.nextgov.com/site_services/print_article.php?StoryID=ng_20081022_1033
Economic outlook bright for biometrics, ID card industries
BY CHRIS STROHM, CONGRESSDAILY 10/22/08
Despite the global economic downturn, the growth potential for government programs aimed at verifying the identity of people in the United States and abroad remains strong, industry officials said at a conference in Washington today.
Companies that produce secure identification documents and use biometrics, such as fingerprints and iris scans, stand to benefit the most as governments award contracts for identity verification solutions, officials said at a conference organized by Imperial Capital LLC, CapitalSource LLC and Civitas Group LLC.
"Traditional paper documents just don't work anymore," said Paul Beverly, president of North American operations for Amsterdam, Netherlands-based Gemalto, which specializes in digital security documents. Jim Hayward, chairman and president of Applied DNA Sciences, said the U.S. public has become tuned into the value of using DNA for security through television programs such as the CBS blockbuster "CSI" series, where police investigators use forensics and biometrics to crack some of the toughest cases. Applied DNA Sciences, headquartered in Stony Brook, N.Y., uses plant-based DNA to secure a host of items, such as passports, driver's licenses, currency and fabrics.
"We feel we have built a recession-resistant business," Hayward said. Indeed, Hayward estimated the market for biomaterial genotyping at $1 trillion. The company boasts that its DNA markings cannot be counterfeited. Hayward said the Transportation Security Administration had about 1,500 uniforms for airport screeners stolen last year. He declared that the uniforms would be identifiable if they had DNA markings on them.
Internationally, LaserCard Corp., based in Mountain View, Calif., expects its profits to grow at the end of FY09 and in subsequent years due to identity verification projects in Angola and Italy, said Robert DeVincenzi, who became the company's chief executive officer and president in June. He said government programs represent 60 percent to 65 percent of the company's revenue. The firm also expects revenue from optical memory card programs in FY09 to grow by as much as 50 percent.
Companies that specialize in providing full services to government clients are expected to fare the best, industry officials said. Gemalto's Beverly, for example, said governments are not only looking for a contractor to provide secure devices but also to manage the process for enrolling people into secure identity programs, provide software solutions and issue secure documents. He said government programs account for the fastest growing segment of Gemalto's business. Specific programs the company eyes for growth include electronic passports, national identification cards and secure driver's licenses, Beverly said. "Clearly there are some strong market drivers that we have," he said.
cliffdweller, Acer’s brands.
Have you read this PR about Acer’s brands from September 9? They seem to think Gateway is “synonymous with Style and Trends”.
http://global.acer.com/about/news.asp?id=6884
The Acer Group multi-brand strategy: the right response to an ever-changing market
19-09-2008 Global Press Conference - Budapest
Markets change, user needs evolve and the result is an increasingly segmented demand. The reason is simple: even the PC has transformed into a commodity and the dynamics behind the purchase of a PC are now all too similar to those behind the purchase of everyday consumer goods: technical specifications and manufacturing components of products now lag behind the affinity and trust the user has in a Brand which, given a choice between similar products, the customer feels more comfortable with.
But a brand is not enough. By its very nature a brand builds exclusive and reciprocal relationships with a specific segment of the market yet cannot expect to create a dialogue across the entire market. The ability to communicate with diverse social-demographic groups can only be achieved through multiple brands, managed within an integrated multi-brand framework.
For this reason, following the recent acquisitions, Acer has implemented a multi-brand strategy which exploits the positive awareness that companies of the group (Acer, Packard Bell, Gateway and eMachines) have developed over time with their own unique customer base, conserving therefore the individual identity and personality of each brand.
The objectives are clear: avoid brand overlapping and communicate coherently both internally and externally (to employees, the channel, end users and investors) while maintaining the identities of the companies unaltered and increasing the overall user base.
The Acer group recently terminated a project which, by means of a thorough market analysis aimed at analyzing the performance parameters of its various brands, allowed it to identify diverse user segments and understand the motivations behind sales, defining as a result different Brand Value Propositions.
The analysis involved users from various European countries and also the United States and was divided into separate phases:
1. Segmentation of users into groups with similar purchasing attitudes for “technological” products.
2. Definition of the Brand Value Propositions and the positioning of the Brands in geographical markets.
3. Redefine the product development process in line with the specific reference segment with a market-oriented approach.
4. Align the sales and marketing communication processes with the specific segments of each Brand.
The analysis not only provided an overview of the current positioning of the various Brands, but also identified specific user segments and pinpointed the specific needs and choice drivers with regards the two principal directions: the influence of the Brand in the purchasing process on the one hand and the influence of technology on the other.
The Acer Brand, traditionally perceived as highly innovative, found a natural positioning within those users highly attracted to latest-generation technologies and Time to Market of products, qualities present in a Brand that is able to “Simplify my life through technology” that is always easy to control.
The Gateway and Packard Bell brands, always synonymous with Style and Trends, were more closely aligned with user segments for whom the PC is a necessary instrument in their daily and social lives, in order to communicate and enjoy multimedia experiences, yet who perceive technology almost as a barrier and are therefore attracted to an established and solid Brand known for its simple and easy-to-use products.
Finally, eMachines is targeted towards users with a predominantly pragmatic approach towards technology and who expect the PC to be efficient and convenient.
“These recent acquisitions are strategic both in terms of business and market positioning,” comments Gianfranco Lanci, President and CEO of Acer Inc. “Acer, Gateway and Packard Bell are three distinct identities of a single group whose objective is to expand the variety of its product range. The three companies will integrate their own unique experience and abilities to offer a broad range of products that allow customers to find the right solutions for their uniquely personal needs.”
bige2533, this should help on the relationships
Below are the six entities mentioned in the 13D.
http://www.sec.gov/Archives/edgar/data/1176974/000092963808000686/0000929638-08-000686-index.htm
Putting the relationships in graphic form helped me very much to understand how the share amounts roll up. You can see that it all rolls up to Remy Trafelet. And for this group of entities you can see how it also all rolls up to Trafelet & Company, LLC and Trafelet Capital Management, L.P.
Remy Trafelet = Managing Member of
Trafelet & Company, LLC (T&Co)
&
Trafelet & Company Advisors, LLC (T&Co Adv)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
T&Co = General Partner of
Trafelet Capital Management, L.P. (TCM)
T&Co Adv = General Partner of
Delta Institutional, L.P.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
TCM = Investment Manager of
Delta Offshore Master, Ltd. &
Delta Institutional, L.P.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
And there is some overlapping ownership of stock between Delta
Offshore Master, Ltd. and Delta Institutional, L.P.,
but I don’t know what that is.
trustcousa,
Isn’t it true that for years there has been fear in some quarters that M would take over the functions of W’s software? I know that when I first became acquainted with Wave I was concerned about that.
My comment in the post (“I'm no tech expert, but it doesn't sound like there is much subsummation here....”) means that it sounded to me like M was NOT taking over many of W’s functions in Windows 7.
It might be a good idea to direct your question to the technical experts.
Re cooler’s Windows 7 link
“Trusted Platform Module (TPM) Services works with computers that contain a microchip that enables the computer to take full advanced security features such as BitLocker Drive Encryption.
“The Trusted Platform Module (TPM) security hardware is a microchip built into some computers that, if present and initialized, enables your computer to take full advantage of advanced security features such as BitLocker™ Drive Encryption.
“More information on the service here.”
“Here” =
http://www.microsoft.com/windows/windows-7/m3/privacy-supplement.aspx#tpm
[I'm no tech expert, but it doesn't sound like there is much subsummation here....]
Trusted Platform Module (TPM) Services
What this feature does
The Trusted Platform Module (TPM) security hardware is a microchip built into some computers that, if present and initialized, enables your computer to take full advantage of advanced security features such as BitLocker™ Drive Encryption.
Information collected, processed, or transmitted
TPM Services include TPM initialization functionality to help you turn on and create an owner for the TPM. As part of the initialization process, you are asked to create a TPM owner password. To use your computer's TPM, you must create a TPM owner password. The TPM owner password helps ensure that only you have access to the administrative functions of the TPM. Saving the TPM owner password allows you to easily manage access to the TPM.
The TPM Initialization Wizard allows you to print your TPM owner password or save it to a file on a USB flash drive. A saved file contains authorization information for the TPM owner that is derived from the TPM owner password. The file also contains the computer name, operating system version, creation user, and creation date information to assist you in recognizing the file. In an enterprise, administrators can configure Group Policy to automatically save this TPM owner information to Active Directory Domain Services.
Each TPM has a unique cryptographic "endorsement key" that it uses to indicate its authenticity. The endorsement key may be created and stored in the TPM by your computer's manufacturer, or Windows may need to trigger creation of the endorsement key inside the TPM. The endorsement key is never fully exposed outside of the TPM, and once it has been created, it cannot be reset.
Once the TPM is initialized, programs can use the TPM to create and help secure additional unique cryptographic keys. For example, BitLocker Drive Encryption uses the TPM to help protect the key that encrypts the hard drive.
Use of information
If you choose to save the TPM owner password to a file, the additional computer and user information saved inside this file helps you to identify the matching computer and TPM. The TPM endorsement key is used by Windows only during TPM initialization to encrypt your TPM owner password before sending it to the TPM. Windows does not transmit cryptographic keys outside of your computer.
Choice and control
Once your computer's TPM is initialized, TPM Services enables an administrator to prevent access to selected TPM functionality through a command management feature. By default, Windows blocks TPM commands that might reveal personal information, as well as TPM commands that have been deprecated or deleted from previous versions of the hardware. This block list may be modified by an administrator.
You can choose to turn off the TPM at any time. Turning off the TPM prevents software on your computer from using the cryptographic capabilities of the TPM. You can also choose to clear the TPM and reset it to factory defaults. Clearing the TPM removes owner information and, with the exception of the endorsement key, all TPM-based keys or cryptographic data that programs may have created when the TPM was in use.
Trafelet’s Holdings per the 7/18/08 13D
http://www.sec.gov/Archives/edgar/data/1083036/000092963808000396/sc13delectronicgame15jul08.htm
I think this is the correct interpretation of the 13D. I don’t know how the holdings are divided between the various entities, but I think these are the totals.
Scroll down to the end of the 13D to the tables and footnotes.
4,517,647 shares of common stock (before the recent sales)
960,000 warrants, each convertible at $.50 to one share of common stock,
expiring 3/24/10
2,851,686 Series A Shares, each convertible at $1.01 per share into about
1.485 shares of common stock. If these shares aren’t converted
prior to March 15, 2010, they are redeemable for $1.50 per
share + unpaid dividends.
(Don’t know if this means the company must redeem them.)
COMMON SHARES
488,835 penalty shares on 4/13/06
252,240 penalty shares on 6/14/06
3,776,572 penalty shares issued at the time of the conversion of the Notes
to Series A Shares on 11/29/06
- - - - - -
4,517,647
= = = = = =
tkc,
“It would help me if you would share where (how) you arrived at 5800 upgrades for Q1 and Q2”
Per SKS in CC’s: A little less than 2,000 in the first quarter and 92% more than that in the second quarter.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33002417
I'm no expert, but I think your 17,000 FDE estimate is reasonable. I've been using a smaller figure, but 17,000 works with 6,000,000 ETS bundles at $.25 and Steven’s “under 20,000” statement. In the estimate below, I used 6,100,000 for ETS bundles just to demonstrate how quickly the FDE numbers change with a slight increase in the ETS estimate.
Below is a rough estimate for a Q2 breakdown with lots of guesses. This gets to $2.160 million. Something would have to be massaged to bring it up another $50 or 60k. I just want to reiterate that there are guesses here. Just trying to fit in to what we have been told. Maybe eSign should be higher, as he’s said that it pretty much pays for its small staff.
I’ve tried before to do a detailed after-the-fact estimated breakdown and it's hard to get everything to work without better information, as I’m sure you know.
Q2 Breakdown Estimate
Units Price Revenue
- - - - - - - - - - - - - - - - - - - - - - - -
ETS old 6,100,000 .25 1.525
FDE 13,000 7.50 .098
- - - - - -
TOTAL DELL 1.623
Upgrades 3,800 60.00 .228
Services .039
Bcom, STM, Intel, etc. .190
Other deferred rev (devel?) .050
eSign .030
- - - - - - - -
TOTAL NET BILLINGS 2.160
= = = = = = = =
tkc, I like the idea of trying to break out FDE upgrades and TPM upgrades. Maybe SKS will start giving at least some ballpark info on that if asked. Also the idea of estimating FDE upgrades through calculating a percentage of the estimated of FDE drives sold. But what he actually said in the Q2 CC was:
SKS: Within the context of people who are buying Seagate drives and not yet buying Wave's management software, it's actually a very hard number to tell, because we find that most of them come around. And so if I were to look at January Seagate sales, how many of them were then ultimately upgraded to the administration server, it's a pretty high percentage. If you were to take a snapshot today, you might look at it and say, it's probably less than half of the Seagate drives shipped have yet upgraded to the server. So that just means market potential for us. There's nothing better than a customer who calls and says, "Gee, I bought 100 laptops with Seagate drives, and how do you manage these damn things?" We get those, and they're easy to convert.
All we really know here is that “a pretty high percentage” of January FDE sales has to mean more than 50% because he compares it to upgrades equaling “less than half” of the whole current FDE total.
The upgrade percentage of recent FDE sales could be quite a bit less than 50%. For example, if we use your 17,000 figure for Q2 FDE sales and add even a low figure like 6.000 for Q1 FDE sales, that gives 23,000 total for Q1 and Q2. The 5,800 upgrades for Q1 and Q2 equal only about 25% of that.
As SKS says, that means more market potential for Wave. But it’s hard to work it out or know how long it will take customers to upgrade. It probably also has to do with the fact that most[?] FDE sales are still pilots. So if we see more larger orders, this should change dramatically.
I tried to work this out in more detail but it was getting too complex and I ran out of steam, but it would be useful to come up with a ballpark calculation.
cslewis, here is a possible Q3 scenario.
1. They need about $2.3 million in cash.
.146 Cash on Hand 6/30
.940 Accounts Receivable 6/30
3.197 Q3 PP’s (1.503, .772, .711, .211)
- - - - -
4.283
(6.600) Cash Spend Estimate *
- - - - -
(2.317) Cash Shortfall Before Revenues
= = = = =
Units Price Revenue
- - - - - - - - - - - - - - - - - - - - - - - - -
ETS old 4,500,000 .25 1.125
ETS “E” or 3.0 1,500,000 .45 .675
Acer 0
FDE 32,000 7.50 .240
Upgrades 10,000 60.00 .600
Bcom, STM, Intel, etc. .180
- - - - - - - -
TOTAL NET BILLINGS Q3 2.820
= = = = = = = =
NET BILLINGS
2.820 “core”
0.600 eSign and WXP Olympics
- - - - -
3.420 net billings
= = = = =
CASH FROM NET BILLINGS
1.692 cash from “core”
0.600 cash from eSign and WXP Olympics
- - - - -
2.392 cash from net billings of 3.420
= = = = =
Upgrades: Steven spoke directly to the number of upgrades in the past two CCs, so we have a very close approximate number.
Q1 CC Q&A
Halpern: Okay. And in terms of seats in the first quarter, so we can get a good baseline when you report second quarter. What were the number of seats, and if you care to offer how many seats have you gotten to date so far in the second quarter?
SKS: So I don't think I can quote off the top of my head the number of seats for second quarter. We've seen a couple thousand seats in first quarter.
Halpern: Okay.
SKS: It's probably a little bit less than that, in upgrade seats. And again, most of it is pilot-based volume.
Q2 CC OPENING REMARKS
So our second quarter has seen a pretty strong increase. We had 92% more seats sold in the second quarter than in the first quarter.
If we are slightly generous and use 2,000 for the first quarter, we get 3,840 for the second.
He also spoke about Q3 upgrades in the Q2 CC Opening Remarks:
So our second quarter has seen a pretty strong increase. We had 92% more seats sold in the second quarter than in the first quarter. And we've seen an increase in the number customers of over 100%. We've seen half of the customers in Q1 have repurchased additional product in Q2. That doesn't mean that the other half were un-interested. It may be that they satisfied their specific volume needs for the first half of the year. We'll continue to track that. That is a very important number for us, because there is a lot of investment that goes into converting a customer the first time and we really hope that the Dell sales channel can manage the conversion of the customer the second time. So we already have a good strong showing in Q3. So revenues are up in Q3 versus a similar time frame in Q2. The Dell Tour continues. We're seeing conversion of customers that we've seen on the Tour into actual, real orders and more volume. In general, most customers are ordering pilot volumes, 20 to 100 units, and then standardizing it as they buy new machines.
hnstabe, thanks very much for responding.
First a note re xxxxcslewis thread: I’ve been using the terms “revenue,” “revenue/billings,” and “billings” interchangeably, all meaning revenue + the part of upgrade sales that is being put in deferred revenue. Going forward I’ll use the term "net billings." Hopefully this won't be even more confusing, as Feeney is using that term for revenue + change in deferred revenue (problem there pointed out by player).
hnstabe, the points you make are useful to think about. I know you were not trying to convince anyone of your point of view, but I’ve written some responses below to some of your points. None of my comments are meant to “refute” your ideas, but are merely reactions which hopefully will be of interest.
I’ve only responded to part of your comments below and will try to address the rest later.
Q3
- - - - -
Re “E” series included in my Q3 numbers. This is from the Q2cc:
Halpern: And on the Dell side, with the increased royalties, really for modeling purposes, you figure one month in the third quarter and the real impact with the fourth quarter.
SKS: Right.
If my E series figures are too high, then those sales would revert to "old ETS" at about $.25 per unit instead of $.45. I would not put that money into FDE sales (maybe you were joking and I am being dense?). If there were no E series sales, my total net billings would simply reduce by $.20 x 1,500,000 = $300,000. (Total: $2.82 million changes to 2.52).
Q4 FDE
- - - - -
You wrote: “My FDE estimate of 400,000 units comes from the E having both 5400 RPM and 7200 RPM HDD available (there are 3 other drives that a customer could chose as well), from the logic that 400k is only 10% of 4 million machines, from SKS words that both Dell and Seagate are pushing, encryption is becoming a byword for business and governments, and we know that Dell will ship at least several million Es since the E is a better machine and the D is discontinued at end of 2008. 400,000 Es could be an underestimate.”
7200 RPM: This is Steven in the Q2cc: “There's no question that there are some customers who have waited for the E Series platform, as well as there are some customers who have waited for Seagate's new, newer Full Disk Encrypting drives, mostly because of speeds and capacities. That certainly isn't everybody, but I think definitely with the availability of those platforms over the coming few weeks that will also help realize some of the volumes in Q3.”
I just find it hard to believe that any large number of companies would be deterred from adopting FDE drives merely because of the speed (or capacity). It’s not as though the initial drives were exceptionally small or slow. I can’t imagine anyone saying, “FDE is the way to go, but we’ll stay with unencrypted drives if all we can get is 5400.” That just doesn’t sound logical to me.
[edit] I just re-read Steven’s words and he said some customers were waiting for better drives, not that they were going ahead with non-encrypted drives. That is more believable.
10% of 4,000,000 = 400,000: Q2 had an adoption rate of about ½ of 1 percent. So based upon what we’ve seen so far I just can’t see such a large jump up to 10%. Even up to 2 or 3% would be a big jump. If it’s 4,000,000 laptops, 3% would be your Q3 figure of 120,000.
Dell and Seagate pushing. I went back and looked at the Q2cc again and you are quite correct that Steven indicates that Dell and Seagate are “pushing” these drives. And he does mention specifically Dell sending out a 50,000 piece mailing from which Wave was getting some orders.
I just wish that we could see some public evidence of this pushing. Dell seems to have abandoned its print ads for the drives and no one on the board has found anything from Seagate that I’m aware of. Also, I listened to Dell’s August 12 launch presentation of the E series in San Francisco happily expecting to hear at least a mention of the FDE drives, but there was nothing. I know they were focusing on what was new in the E series, but if they were really pushing these drives, Control Point would have served as a perfect lead-in to mentioning them. Also, I think that the ease with which a Dell customer can get these drives and Wave’s software is a real competitive advantage for Dell. Dell's various competitive advantages was also a focus of the presentation, so I was doubly amazed that they didn’t mention the drives.
Encryption becoming a byword: We certainly think encryption is important, and it appears to be slowly seeping into the IT culture, even to the point of some states requiring it. Maybe that will do the trick. But we have to wonder how long it will take companies to get going and whether it will be quick enough to support such a massive change from Q2 to Q4.
Wave’s cash position.
This you identify as the biggest influencer for your estimates, and others on the board have mentioned this as well. I will try to address this later, as it is a big subject.
Also, your Q4 upgrade ideas I will try to address later as well.
Thanks again for taking the time to respond.
tkc, re Steven’s TCG statement.
“ AA, SKS replied " All of TCG is focused on driving usage of our 40 million copies of sw." "Our" meaning Wave's software? So, in your opinion, is he saying that "all 140 TCP member companies" are buying Wave's sw? even though it's tough out there. How did you interpret his reply?”
tkc, I agree that the statement is remarkable enough to require some attention and explanation. To some degree it’s probably an example of Steven’s hyperbolic tendencies, and it’s very helpful to review what he said in the Q2CC on the subject even though his statements there are not always clear or consistent.
FWIW, to me it sounds like he is saying this in the CC:
A few months prior to the CC [8] some of the leading people within the TCG started to try in earnest to get their own companies to turn on their TPMs and publicly support their use.[2,5,8] They also encouraged other TCG participants to do the same.[5] He says some deployments are actually underway.[2] At some point the internal deployments will be publicized [2] and other plans to promote Trusted Computing and TPMs will be developed.[5,6,8] But it is not clear how far this has progressed within the companies or how long it will take to see results. He hopes within six months.[8] Wave is still the point company in public [3,4] although he talks in one section about marketing efforts as if they are already underway.[1]
As for the crucial question about Wave’s software, in the CC he doesn’t specifically mention TCG members deploying Wave’s software. He does say, more generally, that “There's energy and dollars being put behind it to push it. And we're a beneficiary of that, and we're helping to guide that.”[5] and “Wave is in the position to benefit from that.”[9]
I, for one, am still not clear about how much TPM implementation can be undertaken without using Wave’s software at all. Maybe someone can address that.
In the CC he mentioned the TCG in four separate sections. I’ve tried to keep the comments in context. The bolded parts directly mention the TCG’s efforts.
ABOUT MINUTE 40
Halpern: And with regard to Seagate drives, do you have a number on how many drives were put with the Dell machines this current quarter?
SKS: Yes, it's under 20,000.
Halpern: Okay.
SKS: It's been nowhere near what we all collectively expected. I think we will see a significant tick associated with the marketing that goes along with the new machines.
Halpern: Right.
SKS: So, just the nature of the beast, if you go see a Dell presentation on their new platforms, security is part of that presentation… [Here he talks about Dell’s Series E campaign, implies that the smallest version will now take the 2.5” drive, talks about a new customer and Seagate’s new drives.] …And so both of those I think will help us in the volumes of conversion.
[1] Plus there's a fairly strong marketing effort by everyone associated with this, from the Trusted Computing Group, to Dell and Intel and others, to the drive manufacturers, and awareness has been created within the marketing of the industry and I think all of that is helping.
[I don’t know what he’s talking about here. Subsequent statements indicate that the TCG has not yet implemented its marketing plans, and Intel certainly is not out there promoting the use of FDE drives when they themselves are about to introduce a competing technology. Maybe he is referring to encryption in general. ]
NEXT, ABOUT MINUTE 57:30
Meyer: Why aren't more members of the TCG implementing Trusted Computing? I don't get why they're, maybe they are, and they just don't announce it, but are they showing serious signs of accepting their own medicine and switching to Trusted Computing?
[2] SKS: So there definitely are some deployments that are underway now. They haven't publicized them yet. I know there's some work on the path to go begin to publicize them. We push that point all the time.
THEN ABOUT MINUTE 1:02:30
Paulson: Okay. What has, what's, you know a few years ago now and I hate to go back this far, but you guys, Wave I should say, was forecasting 2 or 3% turn on rate for TPMs and forecasting breakeven based on that by simply being in the box of PC OEMs, and today you said you're just a fractional percentage of that, but you're out there seeing these companies and they're still not turning them on in volumes. Is it the product, is it still long decision making cycles, what is it, because you're still no where near 2 to 3% turn on rate for TPMs for Wave's products, as it relates to Wave. So what did you over forecast, and what is the market under delivering on, as far as you are concerned, as far as turning them on, what are the major hurdles?
[3] SKS: I think we touched on the broader topic. So who's told you to turn your TPM on, other than Wave? I mean, I'll give you a perfect example, I went to see a major group within the Defense Department the other day. Met with the CTO, and the CIO, and the head security guy, and we had a great conversation about this. And they were totally unaware that we basically forklift upgraded all their machines already. So think of it this way. We patched all the hardware, but nobody told you that we did it. And so now everybody is still running around. There was an article in the New York Times over this weekend basically saying passwords are dead. Great. Why don't you articulate the solution that's in 200 million machines?
[4] Now, I can do my piece, which is send that writer a little note saying, "By the way, did you know..." But my voice, when they hear it from Wave, they look at this and say, "Why is this little company out here telling us this, and we haven't heard this from the major players?"
[5] And so there is a major effort underway, led by the Trusted Computing Group and all the members within it, led by the leading partners. I think you will see a concerted effort to really support the use of TPM. It's out there in enough scale. They're focused on it. There's energy and dollars being put behind it to push it. And we're a beneficiary of that, and we're helping to guide that.
THEN ABOUT MINUTE 1:07:30
Paulson: What kind of things, you mentioned that the TCG could do some things to get Enterprises to turn them on, what kinds of things could you imagine them doing, besides shipping the equipment that has it? Can you give us a "for instance" that they could do this, they could do that, to help Enterprises turn TPMs on?
[6] SKS: Sure, I'll pick on one. Have Juniper stand up and say, "Your network is more secure if you use Juniper equipment in combination with a TPM."
Paulson: Okay.
SKS: Not only say it, but live it. Which means that their field application engineers are out there telling their customers when they buy a Juniper switch that the Juniper switch is not as secure unless you turn on the TPM. If you turn on the TPM, you have now implemented the best available security in the market, and your network is not at risk. And you won't be pasted up on the wall of sheep at Defcon.
Paulson: So why haven't they done that to date?
SKS: Uh…
Paulson: As an example, I'm not saying Juniper, but why hasn't any TCG company said, "Hey...'
[7] SKS: Because the guys who go to TCG are part of participating in standards conversations, they're not the marketing folks within the Enterprise. So the task has to be for those people who participate in the standards to go back to their corporations and say, "We've done the standards work. We've shipped the hardware. Now we need to reap the benefits from it."
[8] And so those efforts have now been underway for three or four months to help carry that message back into those Enterprises, up into the organizations and begin to press it out, and hopefully we'll begin to see some of the results of that over the course of the next six months.
[9] And, Wave is in the position to benefit from that. I think we've done everything we can to put us in a premier position to be the leading company to benefit from when hardware security turn-on takes place.
Snackman, the survey is fine, but it would be also be most helpful to encourage people to post their estimates especially if they are willing to give the details and also share the rationale for their figures.
That way, those who are interested might find their own views changing due to others’ ideas - one of the main purposes of a message board.
Revenue estimates are one of the most important things in investment decisions.
Fortunately our space is not so limited.
wavedoctor, my Q3 and Q4 estimates are in the last section of my post, along with some explanations. Since I was asking hnstabe for information on his estimates, I felt that I should produce corresponding estimates of my own.
Here are some cash figures that imply greater Q3 revenues than my estimate (unless cash comes from a source other than revenues/billings):
PRIOR QUARTERS PERCENT OF REVENUE RECEIVED
(original table from tkc)
I don’t know why it has jumped around like this since most of it is from Dell. Maybe Q208 indicates that they are getting on top of this.
Q207 Q307 Q407 Q108 Q208
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Sales 1.410 1.734 1.875 1.699 2.218
A/R 898 1.353 1.165 1.427 940
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
AR/Sales 64% 78% 62% 84% 42%
Cash Rec’d % 36% 22% 38% 16% 58%
Q3 CASH
- - - - - -
.146 Cash on Hand 6/30
.940 Accounts Receivable 6/30
3.197 Q3 PPs
- - - - -
4.283
(6.600) Cash Needed Estimate
- - - - -
(2.317) Cash Shortfall
% Cash Received Implied Q3
$2.317 million Revenue/Billings
- - - - - - - - - - - - - - - - - - - - - -
40% 5.793
50% 4.634
58% (Q2 %) 3.995
60% 3.862
70% 3.310
hnstabe, thanks for giving the details of your revenue estimates.
I’m wondering if you could share your reasoning on the estimates, in particular your estimate for Q3 and Q4 FDE sales (120,000 and 400,000 units) and Q4 upgrade sales (100,000 units). Are your figures based on specific scenarios that you think are likely? Or is it more just what you hope will happen?
For example, regarding Q3 and Q4 FDE sales, do you think that the addition of the 7200 RPM version will make a big difference to customers? Or maybe you are thinking that a large number of the 1,000 Q1 customers who bought only a few drives will soon be standardizing on the FDE drives?
Regarding Q4 upgrades, are you thinking that several large orders for ERAS for TPM management (as opposed to FDE management) are likely in Q4? Or maybe your Q4 upgrade estimate is based on your Q3 FDE estimate, thinking that most of those 120,000 FDE drives in Q3 will translate into upgrades in Q4.
Any ideas you feel like sharing would be of interest.
For comparison, I’ve listed below the Q1 and Q2 figures for drives and upgrades and also my estimates.
Q1 AND Q2 FIGURES FOR FDE DRIVES AND UPGRADES.
FDE DRIVES
Q1 less than 10,000, say 8,000
Q2 less than 20,000, say 16,000 100% increase
UPGRADES
Q1 less than 2,000, say 2,000
Q2 92% increase, say 3,800
Q3
- - - -
% Increase
Units Price Revenue vs. Prev. Qtr.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ETS old 4,500,000 .25 1.125
ETS “E” or 3.0 1,500,000 .45 .675 (c)
Acer 0
FDE 32,000 7.50 .240 100% (a)
Upgrades 10,000 60.00 .600 163% (b)
Other .180
- - - - - - - -
TOTAL BILLINGS Q3 2.820
= = = = = = = =
Q4
- - - -
% Increase
Units Price Revenue vs. Prev. Qtr.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
ETS old 2,000,000 .25 .500
ETS “E” or 3.0 4,000,000 .45 1.800
Acer 300,000 .35 .105
FDE 64,000 7.50 .480 100% (a)
Upgrades 20,000 60.00 1.200 100% (b)
Other .180
- - - - - - - -
TOTAL BILLINGS Q4 4.265
= = = = = = = =
Thoughts about Knock-offs
RES-Q-VAC
I hadn’t thought about knock-offs until I read the following passage from the 10Q. Bad that there are knock-offs of the RES-Q-VAC, good that RES-Q-VAC has patent protection for the Full Stop Protection filter and it seems to be holding its own against the knock-offs.
“Currently there are a number of competitive devices built in China such as Ambu Res Cue Pump and Easy Breezer, which are essentially copies of the RES-Q-VAC technology, and are available at lower costs. There is also a device called V-Vac made by Laerdal which has strong representation. None of these devices have our patented Full Stop Protection filter, or are available sterile. The RES-Q-VAC currently has greater performance and while lower cost devices initially did affect our sales, currently it appears that we are increasing and maintaining sales in this market. However with the decrease in funding to the emergency medical market due to an economic downturn, there can be no assurance that our sales will continue at the current level, or that these lower cost devices will not begin to erode our markets.”
FREEDOM60
I don’t know what the patent protection is around the Freedom60 other than the connector, which I have always believed was primarily to prevent the use of tubes other than REPR’s tubes for revenue reasons – in spite of the statement that the connector also prevents overdosing. (“Our patented syringe disc connector insures that only the Company's Freedom60 tubing sets will function with the pump. Non-conforming tubing sets, without the patented disc connector, are ejected from the pump to prevent the danger of an overdose or runaway pump from injuring the patient.”)
So, aside from the connector patent, I am assuming that potential knock-offs of the Freedom60 would not be a threat at least in the U.S. because knock-offs would not be able to receive Medicare reimbursement for the subcutaneous immune globulin. (”In June 2007 CMS issued a clarification that the Freedom60 Syringe Infusion Pump is the only allowable pump to be billed with subcutaneous immune globulin under HCPCS code E0779.”)
awk, yes Control Vault.
You wrote: “Be advised that the new DELL Latitude E Series notebooks feature a new Broadcom made chip that works in conjunction with the TPM and makes the biometric template comparison now in hardware.”
Did you skip over my short intro to Steven’s words? “...It puts Control Vault a bit more in context. I wonder if there is a handshake between Control Vault and the TPM?”
I understand Steven to have been saying that some OEMs were already making the biometric template comparison in hardware in 2006. What was missing was the “handshake” between the chip making the comparison and the TPM.
So when you say Control Vault “works in conjunction with the TPM” are you saying that there IS this “handshake” between Control Vault and the TPM that Steven in 2006 was anticipating? That there now is this “chain of trust that’s consistent all the way through”? Or is Control Vault merely making the biometric template comparison but still not shaking hands with the TPM, just as similar chips were doing in 2006?
FOR REFERENCE:
“There’s already been initial work to hook biometrics to supply that PIN number instead of the biometrics. I will say today that we are one step shy of what I would consider really secure biometric authentication to the Trusted Platform Module in that today the template-matching, which is how I compare my fingerprint to the actual template that I’m comparing, is done outside of the TPM chip. Now, in the case of a number of manufacturers they’re doing that actually on a security chip that does that comparison but there isn’t yet a handshake between that biometrics comparison chip and the Trusted Platform Module chip. And that’s one of the things I think you will see down the pipeline as time continues to evolve. So we get these subsystems handshaking with each other so that the fact that I securely supply a biometric and it’s properly compared and said, “Yup, that’s Steven’s fingerprint” it now logs me in with Steven’s fingerprint to the TPM with a chain of trust that’s consistent all the way through.”
UND Comment Relevant to Control Vault
This is also from SKS's October 2006 University of North Dakota presentation, right after the paragraphs in my previous post. It puts Control Vault a bit more in context. I wonder if there is a handshake between Control Vault and the TPM?
“There’s already been initial work to hook biometrics to supply that PIN number instead of the biometrics.* I will say today that we are one step shy of what I would consider really secure biometric authentication to the Trusted Platform Module in that today the template-matching, which is how I compare my fingerprint to the actual template that I’m comparing, is done outside of the TPM chip. Now, in the case of a number of manufacturers they’re doing that actually on a security chip that does that comparison but there isn’t yet a handshake between that biometrics comparison chip and the Trusted Platform Module chip. And that’s one of the things I think you will see down the pipeline as time continues to evolve. So we get these subsystems handshaking with each other so that the fact that I securely supply a biometric and it’s properly compared and said, “Yup, that’s Steven’s fingerprint” it now logs me in with Steven’s fingerprint to the TPM with a chain of trust that’s consistent all the way through.”
* I’m not sure if he misspoke here and meant to say something like “instead of the keyboard.”