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Dig, That's not the way I read it. According to Chance's transcript around 20 minutes SKS says:
" And so today our pricing on that is measured in a few dollars per seat, not yet $50 per seat." And earlier in the CC he mentioned a "few hundred thousand dollars" being for 60,000 seats (I assume he was referring to the entire 60,000, anything less would have implied more than a few dollars per seat, and SKS doesn't exactly have a history of playing down any positive news). So I would say about $3.33/seat max and probably less when the volume is as much as 60,000. So much for the $99.99 pricepoint or the $49.99 pricepoint or even the $7.50 pricepoint for that matter as far as ETS is concerned. I don't think that is too surprising given the $1 price that Dell enjoys (admittedly for a much larger volume).
Is that of no matter? I think so. For a buy and hold investor who has had shares for a long time (like myself), even with additional shares bought post split, real rewards can only come with ERAS upgrades on a wide scale. For short-term traders it's a whole different ballgame, and a whole different set of risks as timing becomes all important. If Doma had a five bagger on the #'s of shares he says he held he's clearly gutsier, shrewder, and probably luckier than me!
Svenm
Chance and DigSpace,
Thanks for going to the trouble to dig up that data! At least we know what we're talking about now!
Svenm
Rooster, Nice find! I never skip your DD! It'superb!
Svenm
Thanks Doma for the input. "Keeping it real" is a good idea in my opinion. I share your concern about the ability of very large firms to use their existing PKI infrastructure to accomplish machine/individual authentication without ERAS and I'm not sure what applications (if any) would dissuade them from that. In that sense the PWC could be a two-edged sword. While very positive in that those TPM's are now being lit up, it is also pointing the way to an end-run around ERAS. Still very much a net-positive for Wave, but .5 magnitude (not 1.5 as I guessed earlier) less in revenue than the full boat. Given the fact that a major automaker committed to ERAS, one could expect that it may be a mixed bag going forward, with some very large companies fully upgrading while others use the TPM with Wave software for cheap secure authentication and take advantage of their own robust IT to manage it. It's still a very large market and the public endorsement of hardware security by PWC and the NSA can't be underestimated, IMO. As we all know, predicting the future (especially of Wave) is very difficult, but it looks to me like the tipping point for the switch to hardware-based security has finally been reached.
Now we may get to see how that will play out.
Svenm
Wiz,
This is great news and thanks to awk for finding this info. However, I don't think you can extrapolate that $6mil in revenue as so far it does not appear that PWC is upgrading to ERAS. As long as they don't upgrade the amount of revenue to Wave is on the order of 1.5 magnitudes less. Hopefully, PWC will take the next step and upgrade, but it doesn't appear (to me, at least) that we have that yet.
JMHO,
Svenm
PP, I believe the TPM provides the ability to hold data (e.g. authentication of a device or a root of trust) in a non-accessible space on the electronic device (e.g. a PC). The ability to wipe a hard-drive clean or to jam a cell phone doesn't really require a TPM, software is used for that. What's unique about the TPM is the degree of certainty which one has in device authentication prior to using such an application. Apple doesn't need a TPM to perform that, the software will perform it. Just not as secure, which, of course, could turn out to be a problem.
JMHO,
Svenm
1260,
Very helpful.
Thanks,
Svenm
Weby,
Thanks for straightening that out for me.
Svenm
1260, I admit to ignorance here as well. You seem to understand the MM machinations. Would you mind explaining how this game is being played?
TIA,
Svenm
Rooster, Nice find! I'm beginning to think Intel's McAfee purchase will be seen as the most clarifying event in the hardware/software vs. software-only-security struggle. Instead of if hardware/software security will establish itself and dominate, the question is rapidly becoming "How long will it take?". And the numbers of devices that are being thrown around are mind boggling. Even if Wave tech doesn't touch all those devices, the importance of having central management one way or another over them is increasing the potential size of the already huge potential market by orders of magnitude!
And thanks for the outstanding DD you consistently come up with. It's much appreciated!
Cheers,
Svenm
That is a pretty good customer testimonial: not that big a hospital but it is the number level 1 trauma center in New England and an academic institution. Since Boston's academic medical centers are arguably the most influential in the nation this can't be bad. Health care is an important vertical for trusted computing to break into.
JMHO,
Svenm
Hi Alea,
Ha, ha! I really outdid myself on that one. By all means, have as much as you like, but I don't promise any repeats! It's a one-of-a-kind trick, if you know what I mean.
Svenm
Alea, I think you may be right. Let's hope that we have a little luck here. As an aside, I'm pretty lucky in general. Two days ago I had an oncoming car pull out into my lane about 400 yards away at 90 mph fully committed to passing an 18 wheeler. I gave her my lane, went onto the gravel shoulder at 70 mph and she did the same (oops!). I held my ground, giving her my asphalt lane (2 lane highway) and she managed to swerve on to it, sailing by me at about 70 mph about a foot to my left with the 18 wheeler on her other side before she lost control and flipped her truck into the desert.
If I can survive that I'm sure that Wavoids will survive this! And in 2011 this may retrospectively look like the buying opportunity of this new century!
Cheers,
Svenm
VH, Thanks for taking the time to post that.
ASISEEIT,
I agree with 1965. I hope we TPM's get used a lot quicker than seats belt did!
Svenm
A bit of Sunday trivia.
Here is an example of TTT (Weby's Things Take Time) regarding seat belts in autos, which may (or may not) be an analogy for hardware based computer security:
1930's- several U.S. physicians equip their own cars with lap belts
1955-National Safety Council, American College of Surgeons, International Association of Police Chiefs vote to support installation of seat belts in all autos.
1965-All U.S. manufacturers providing lap belts.
1972-W. Germany requires 3 point belts front and rear.
1985-NY State mandates belt use front and rear.
Now, where do TPM's fit in that kind of timeline?
Svenm
Hi Awk,
Thanks for the reply! If PWC does a full adoption that would be a great step forward, for sure. Based on past history I just have to believe it when I actually "see" it. I'm not looking to buy any more WAVX but I do plan to see this through so I'm personally not concerned about not acquiring prior to a big runup. I'd just like to see a runup, and have it based on the success of the company with achievement of at least some of the potential we've given it credit for so many years now!
Cheers,
Svenm
Awk, What kind of adoption are you referring to? Do we have any kind of evidence that PWC is buying ERAS for their 60,000 seats or does it just mean that they are going over to the use of TPM's for the purpose of computer authentication alone? Perhaps someone who was at the SHM could provide some info here?
Svenm
I don't know about Doma, but I would, of course. However, I wouldn't give him an extraordinary bonus or raise his salary on that account. He's just doing his job for which he has been compensated far in excess of what he has actually delivered for investors.
Svenm
TexasPlains,
Hear, hear! I've never understood for all these years why SKS has gotten the kind of loyalty and support that he has from many on this board. Not to deny the challenge facing his company, I do have a comparison to make.
I have a family member working for a software startup that began five years ago. I have no idea how much this privately held company has raised by way of equity sales, but it has no debt. The company has doubled in size each year of its existence and has major customers in multiple markets around the world. It is cash positive and has a market cap three times that of Wave Systems. Its CEO earns a fraction of what SKS has taken in for lo these many years. "Feet to the fire" would be a welcome change, if you ask me (I don't expect anybody to do that!).
Svenm
khillo (and others),
My initial reaction to this National Strategy document was one of enthusiasm, hoping that finally the feds were going to kickstart hardware security. But at least my initial review and consideration of this 26 page missive is a lot more downbeat for a variety of reasons:
1) The agency mentioned for opinion gathering is the Dept. of Homeland Security, hardly the greatest backer of hardware security thus far. Perhaps the submitted opinions are only window dressing for a politically correct aura of democracy anyway, but I would have liked to have seen a reference to the NSA instead.
2) While TPM's are mentioned several times, they are hardly represented as the mainstay to this policy. They are promoted on an equal basis as software security, via software credentials. Unless these credentails are rooted in hardware security, they will be subject to all the flaws we are very familiar with. In fact, when TPM's are reported in this document as being present in a cell phone, we are presented with totally erroneous information, unless there has been a miraculous change in technology that we aren't aware of. Wouldn't one expect Howard Schmidt, at least, to have understood the difference between an instanchiation (sp?) and an actual TPM?
I'm beginning to worry that our government bureaucrats are just too plain incompetent to bring about the cybersecurity this country actually needs.
Sorry for being so downbeat (and I hope my instincts are wrong), but I found this document woefully inadequate.
Svenm
JD,
Thanks for all your dd'ing! Slides 18 and 19 of this Boeing presentation were particularly interesting. Hopefully this is where Wave will be fitting in.
Svenm
Snackman,
Thanks, good to hear and thanks for the reports from the ASM.
Svenm
Toro,
Thanks for your reports! I'm looking forward to any more forthcoming.
Svenm
Wavedreamer,
Based on some quick googling your assumption of volume of 4m laptops/qtr is ballpark correct. If we can trust those figures cslewis' numbers are also in line. I'm afraid it won't get us to $40M revenue for 2010, however.
Svenm
Bert,
Wave entered a resale agreement with SafeNet in 2008: http://www.wavesys.com/news/08press.asp
Svenm
Snackie, You are an eternal optimist but that's not to your discredit! The case for hardware based security has never been stronger, even if one cannot be but very surprised and disappointed at the length of time it has taken to get to this point. But given the momentum we now have I would say your predictions are very modest indeed.
Cheers,
Svenm
VH,
One can read the entire bill that you reference here: http://www.govtrack.us/congress/billtext.xpd?bill=s111-773
I skimmed it and it just about what one would expect from a couple of U.S. senators. Very disappointing sound and fury empty of substance. Lots of talk about setting up panels, advisors, scholarships, grants, reviews (quadrenially, no less!) and how many $'s would be spent on them. And then oodles of paragraphs about demanding that software security be made secure.
In other words, if Wave's future is dependent upon the U.S. Senate passing a bill to further cybersecurity, fuggetaboutit! Hopefully our DD is actually closer to the reality and there are influential groups with the federal government that are actually implementing hardware security, even as the politicians babble on without a clue.
Cheers,
Svenm
DaBears,
Kudos to you once again for your really outstanding DD! After all this time to finally see this tech written into the army budget is really almost surreal! (lol) After all the false starts it looks like we will finally be off to the races!
Thanks again,
Svenm
BullD, Have you got one of those for billings? That may be more timely and representative of progress.
Svenm
Warbil,
That's a good question. I think part of the answer lies in the fact that the TCG made the estimate long ago that the enterprise & govt. sectors would be addressed first, simply because of the obvious need and investment involved for implementation. Therefore, whatever infrastructure exists today is mainly directed at those two sectors that have the ability (in-house IT) to manage their networks. The consumer is still on the back-burner. However, if you purchase a PC with SED per TCG standards at least you won't have to worry about sensitive information falling into the hands (unless those hands have an electron microscope, savvy and $200,000 to break their way into your TPM!). You'll be losing an expensive brick.
I don't know much about the Open ID program but my assumption is that Wave is becoming a little impatient about the ability for TCG standards to address the consumer population. Their entry into the market place as a certifying authority may be an effort to jump-start it, even if that isn't occuring yet. It's really an example of why the ubiquity concept really is important. Until there is widespread use of hardware based trusted computing it will be difficult to really use it properly. If you tell your computer(via the TPM and a certifying authority) that you will only accept data from authenticated sources, yours will be a pretty lonely PC! In other words, the consumer, as originally envisioned, will be the last to benefit from this tech. (Not to say that that couldn't happen relatively quickly, once we see widespread adoption by enterprise/govt).
I hope this sheds some light on your question, and I'm sure that others can do a much better job.
Cheers,
Svenm
Taxi Vader,
Nice find! The RFI application expires today. Though government moves at a glacial pace, perhaps we'll see this coming out as an RFP pretty soon. It looks to me as if everything that is being asked for can be supplied by a number of implementers, and it is pretty clear that Wave would be involved, given the need for adherence to TCG standards. I'm wondering what period of time something like this would be implemented over, and what the procurement would involve in terms of trusted PC's, though if I read it correctly, there would be other digital devices involved as well. It may be that the Department of State already has a sizeable number of TPM outfitted PC's, in which case the deployment could be handled much more quickly.
Cheers,
Svenm
Doma,
Edit: My bad. I responded before reading the other posts indicated two manufacturers and your reasoning for the previous PR. That's great! Funny that the other manufacturer's logo didn't show up on the slide at the presentation yesterday. Probably that manufacturer does not want their identity disclosed.
Cheers,
Svenm
Doma,
I doubt it. Mazda North America qualifies as a "U.S. based global automaker". It has 37,000 employees in the U.S. so it could easily accomodate the order size that was quoted in the PR. Really no need to look for another manufacturer. Personally, I assumed it was Ford or GM previously, not really parsing the PR as carefully one ought to with Wave, based on previous experience.
JMHO,
Svenm
My apologies if this has already been posted, but this legislation passed in the House of Representatives may be contributing to the recent interest in WAVX shares:
In new federal legislation, a victory for cybersecurity
By CHRIS BRONK
HOUSTON CHRONICLE
Feb. 11, 2010, 8:10PM
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It's not every day that we hear that a bill regarding a major issue of great importance to American industry, society and national security has sailed through the House of Representatives with overwhelming bipartisan support, but that's exactly what happened earlier this month with passage of House Resolution 4061, the Cybersecurity Enhancement Act of 2009. Sponsored by Rep. Daniel Lipinski, D-Ill., and nine others, including the representative for Texas' 10th District, Michael McCaul, the bill represents a concrete set of steps that government can use to confront the threat that Director of National Intelligence Dennis Blair chose to lead off with in his annual intelligence briefing on Capitol Hill last month.
This is not the first major legislation proposed on the cybersecurity issue. Last April 1, Sens. Jay Rockefeller, D-W.Va., and Olympia Snowe, R-Maine, delivered their own blueprint for cybersecurity. Coinciding the introduction of their bill with the activation date of the much-hyped Conficker Internet attack, their initiative withered on the vine. Conficker, while still a real threat, was essentially a bust and left those who gave the gravest warnings about it looking like April fools.
Also, provisions of the Rockefeller-Snowe bill, which would have permitted the federal government to take control over or shut down computer networks, including parts of the Internet, in times of crisis, was viewed by Internet service providers and just about anyone else relying on a large computer network to do their business as government overstepping its bounds. The telecoms and Silicon Valley argued, and rightly so, that recovering from a cyberattack was not a job in which the federal government should step in and exert its control, but rather a more nuanced process where industry and government work together to sort out the mess.
What the House of Representatives has gotten right is to begin assembly of a piecemeal strategy to develop our capabilities over time. This is legislation that accepts that there is no silver bullet or broad act of government that will solve the problem overnight. It provides funding for the training of technology workers who will pay off their educations in national service. It brings together universities, the country's rich resource and development resource pool and industry, funds them and thereby creates a pipeline from the labs to the desktop, the BlackBerry and beyond. Most important, it tasks civilian agencies, including the National Science Foundation and the Department of Commerce's National Institute for Standards and Technology, with delivering solutions to the cyberproblem. Moving forward, we will need to embrace such thinking as most of what constitutes cybersecurity is not cyberwarfare and therefore does not fall within the purview of the Defense Department.
For those here in Houston who may argue that this is a problem for the bureaucrats in Washington or the techies on the West Coast, that is simply not the case. This threat is real. It is real to my daughter's preschool teacher, who awoke one recent morning to find herself locked out of her e-mail. She heard from friends that someone had hijacked her Facebook account. Cleaning up the mess, she must now worry about the integrity of her online accounts, credit rating and identity, while every step of the way proving again and again that she is who she says she is.
The threat is also real to our energy industry. We are in the process of a revolutionary overhaul in the way we produce, buy and consume electricity: the “smart grid.” Smart grid will allow us to confront our energy dependency issues by bringing the same sorts of IT-delivered efficiencies to the electricity business that have allowed retailers like Wal-Mart to manage their supply chain and inventory to enormous profitability. What is risky is that the smart grid will connect the electrical grid's supervisory control and data acquisition (SCADA) systems to wired and wireless networks, including the Internet. While my colleagues and I argued here last spring that we had little to worry about regarding a cyberattack against the electricity grid as it is currently configured (Houston Chronicle, “Is U.S. vulnerable to a cyber attack?” Page B10, May 3), connecting SCADA to the Internet will change that.
A number of good things have happened on the cybersecurity issue in the past few months. President Barack Obama has chosen to tap a leading cybersecurity thinker and doer, Howard Schmidt, to serve as his top adviser on the issue. Google has very publicly pointed the finger at those attempting to steal its intellectual property and is working with the State Department and National Security Agency in what one diplomat called “21st-century gunboat diplomacy.” We are even talking about cyber arms control with the Russians.
Cybersecurity is now approaching where it ought to be on the national agenda. Now the same needs to be said of every Fortune 500 company's boardroom, including those with headquarters here in Houston.
Bronk is a fellow in technology, society and public policy at Rice University's Baker Institute for Public Policy.
Svenm
Chance2C,
Terrific job! Thanks for sharing!
Svenm
DaBears & Weby,
I wonder if it may have something to do with the identity service that SKS mentioned during the Q309 CC? From the Wave PR for that CC:
At Digital ID World in September Wave released and demonstrated a beta version of id.wave.com, its new identity service for strong authentication and single-sign on to Web services and applications in the Cloud. id.wave.com takes advantage of the TPM security chip to secure users’ authentication identities with keys held in the TPM
Just guessing,
Svenm
Ramsey, Weby,
Re: Current DoD budget and cybersecurity. I don't have the link in front of me but I've recently read that the proposed Obama administration budget includes a DoD allocation of $10B for cybersecurity as proposed by Robert Gates. Given that, I don't think budget constraints will hinder Wave's efforts with the DoD. I think it's still (perhaps no longer given DaBear's outstanding contributions this weekend) proof of concept.
One think I don't understand regarding the DoD RFP: the numbers look very small. Do you think this is another pilot or limited to a very small agency? Or what am I missing here?
TIA,
Svenm
Helpful,
Re: Dell as the last domestic computer manufacturer.
Not a terribly important point, but according to Wikipedia that is probably no longer the case:
From Wikipedia on Dell: "Dell's desktop plant in Austin was shut down in 2008. It closed its desktop manufacturing in Lebanon in early 2009. The last major U.S. plant in North Carolina is scheduled to close in April, 2010.[45] It marks the end for most of Dell's personal computer manufacturing in the United States. It's expected that most of the work carried out in North Carolina will be transferred to contract manufacturers in Asia, though Dell said some of the work will move to its own factories overseas.[46]"
Svenm
DaBears (and Pointandfigure),
Hear, hear! Terrific DD! Thanks a ton for all your efforts! You're really shining the spotlight on the stage as the curtain is being drawn back!
Svenm