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Go-Kite,
I'm not technically savvy enough to adequately explain your question, but I can add this. A family member of mine is a principal in a start-up Silicon Valley software company that is growing very quickly and has a great need of security for their own sensitive data as their computers are frequently being subjected to outside probes and hacks. I asked him about whether or not they used Wave's software. He pointed out immediately that TPM's are on all of their Dell computers and that the bundled Wave software was managing the turned-on TPM's. This provided machine authenticity to them, and of course they use the usual password protection. But apparently at this point they see no need for management of the TPM's by ERAS. Of course, almost all of their employees are computer scientists and they are virtually one big IT department. That may be a reason for not wanting to spend the additional dollars for TPM management. I'm not sure if this has relevance for larger companies that might benefit more from ERAS. But at least in this case non-awareness was definitely not the issue.
Svenm
Bull Dolphin,
Thanks again for the table and its update! There is a lot of information there. One thing is clear, Q309 on a YAY basis is easier to headline than Q409 will likely be. As Waveduke mentioned, Wave is heading in the right direction, but we're still waiting for the breakout quarter.
Cheers,
Svenm
Hi Ramsey,
Nice post. If it turns out that way it would be great! On the other hand, parsing SKS's words has been a futile exercise for lo these many years. A leopard may change its spots I suppose, but it doesn't happen frequently.
A weary Wave speculator,
Svenm
x4CSlewis,
Nice work! Those are reasonable assumptions and a good deciphering of what was reported today.
Svenm
Hi Ramsey,
I don't read those numbers the same as you do. The Wave announcement reads: "As supplemental information, we provide a non-GAAP performance measure that we refer to as total billings. This measure is provided in addition to, but not as a substitute for, GAAP total net revenues. Total billings means the sum of total net revenues determined in accordance with GAAP, plus the increase or minus the decrease in deferred revenue. We consider total billings an important measure of our financial performance, as we believe it best represents the continued increase in demand for our software license upgrades. Total billings is not a measure of financial performance under GAAP and, as calculated by us, may not be consistent with computations of total billings by other companies."
In other words, new upgrades number about 8000 ($400,000/$50 per upgrade) for Q408, which is a substantial increase from previous quarters, but not to the degree you are mentioning.
I'm still not disappointed as this is definitely an accelerating sales trajectory.
Please correct me if I'm missing something here.
Best,
Svenm
Awk and Weby,
Thanks for the explanations! I hadn't picked up on that Broadcom processor before. Hopefully all these Dell ads (every morning 1st page on the FT) will pay off!
Best,
Svenm
Would someone please explain exactly what Dell means by "Control Vault"? An article at ecommerce stated: "A proprietary Control Vault feature hides a nonvolatile RAM volume on the hard drive as an offline subsystem. This helps IT track lost laptops and wipe the hard drive remotely. This security sub-processor centralizes and protects user credentials and security keys in a single, hardened security "vault" away from the system's main drive."
This sounds to me as if there is an implicit reference to the TPM as well as a separate, proprietary to Dell, subsystem. Does anyone know what that is and if/how it is related to Wave's tech? Since it is currently bullet point #1 in the daily ad Dell is running in the financial press I'm curious to know exactly what they are referring to.
TIA,
Svenm
YeaIknow,
Could be, but I don't see anything in that article referring to hardware security. More likely, imo, is that the improvements in NAC that the article is referring to are software driven.
Svenm
hnstabe, Thanks, I saw that after my previous reply to you.
Svenm
Alea,
Thanks, I'd forgotten about SafeNet. April 8, 2008 dovetails nicely with the March PR re: Lenovo.
I suppose it's still a longshot and it's only dot-connecting, which in the case of Wave has provided nothing but losses for all these years. Nevertheless, the acquisition of the Intel rollout would, IMO, herald a turn around. And based on this whitepaper I still can't rule out this possibility.
Svenm
Player, 1)I can't find a reference in the paper specifically referencing the solution as a software-based solution. It does refer to it as a software solution. Wave's software would obviously fit that description. I'm open to correction if I am wrong on that point.
2) I agree that the requirements say it had to be compatible with the existing base of of PC's deployed in their environment. That is a stickier point and I concede that it doesn't support Wave as a solution for Intel. On the other hand, depending on how the general deployment was to be rolled out (e.g., with the replacement of existing notebooks as they become obsolete) perhaps that requirement would be subject to some modification.
Since apparently Intel is using IBM Thinkpads, Wave's PR in March, 2008 (Wave Announces EMBASSY® Support for Seagate FDE Hard Drives Available from Lenovo on Select ThinkPad Series Computers
March 13, 2008) may have some importance.
If not, and this is a software based solution which satisfies the Intel IT Dept.'s requirements, namely: 1) High Security 2) Enterprise Manageability and 3) Minimal Impact on Notebook Users, then I would say it is a crushing indictment of Wave's ability to compete in the marketplace. I would have to agree that the share price is a fair (if not high) reflection of the value of the company.
JMHO,
Svenm
Honest Abe, I'm not sure what you're referencing on the substantially less than $5M cost for deployment. In this white paper I can't find any reference at all to the deployment cost. The only reference to costs is the conservative estimate cost of $5M per occurrence for credit monitoring for possibly compromised individuals in the event of a security breach on one of Intel's employees' notebooks. However, the paper does state that 80% of Intel employees have been issued notebooks. Assuming 90,000 employees (after recently announced planned layoffs) that would be 72,000 notebooks. At $50/notebook for ERAS it is $3.5M. I'm not sure what the server costs would be but it sounds like it would certainly come in at a total of $5M or less for the entire organization.
Svenm
29T, Additionally, one of the authors, Michael Amirfathi, was a co-author of this Intel whitepaper from 2005: http://www.intel.com/technology/itj/2005/volume09issue02/art07_platform_req/vol09_art07.pdf
On the page numbered 171 in the article the authors point out that TPM and LaGrande technology is the platform that they expect to provide security during the rollout period (presumably across enterprises in general, not just Intel)2009-2011.
There are a lot of dots here that point to Wave ERAS software managing all of Intel's employees notebooks if the pilot study, numbering 1000 and "proceeding smoothly", goes onto the next phase of a general rollout to Intel's 100,000 employees.
JMHO,
Svenm
TPT, I don't think this is about the bundle. The paper explicitly mentions the importance of centralized management of the FDE notebooks. Anybody can correct me if I am wrong, but I believe that will require server-based software (ERAS, hopefully). I'm not familiar with the capabilities of Wave's software based FDE competition, but given Intel's VPro technology and commitment to TCG standards, I find it a stretch to think they would be using a software-based system for their own employees' notebooks. I think this is the real thing unless someone can come up with a strong case for it being otherwise.
JMHO,
Svenm
Intel's headcount is about 100,000. Assume an equal number of notebooks with an ETS upgrade works out to $5M revenue for Wave. If the phase in is 3 years (for Intel this may be conservative) tht would be about $1.7M/year in rev's from Intel, not including maintenance contracts, nor the sale of presumably Seagate hard drives.
Svenm
JKIRK, Nice find! Although that document doesn't name Embassy software, everything in the article points toward a full disc encryption model based on hardware security employing software capable of providing enterprise control over employee notebooks. Currently in its full pilot phase (1000 notebooks)the next step should be the general rollout. In this case that would be all the employee notebooks at Intel. I don't know what that number is, but it must be quite a bit. Most importantly, if the ETS is adopted by Intel as its security strategy, Wave will have the best showcase one can possibly imagine.
This document was published on 12/08/08, so it really is new news.
Thanks,
Svenm
Awk,
Thanks for the reminder and I agree with your bullet points. It's certainly frustrating with the glacial rate of hardware security acceptance. Nevertheless, the snowball, though tiny now, is finally beginning to roll!
Svenm
Just musing, but it is incredibly encouraging that even in the face of disappointing FDE drive sales by Seagate to date, that Toshiba and Fujitsu feel compelled to offer competing products and have chosen (and trumpeted) Wave as their partner in software management. As SKS pointed out in the CC, without the muscle of large partners Wave is mainly a tiny voice crying out in the wilderness. One can't help but think that Toshiba and Fujitsu are basing their decisions on the expectations that this is going to be a significant market. If October upgrades matched those of Q3 as SKS said, perhaps even in the face of the adverse macroeconomic climate Wave will begin to get some real traction.
JMH hoping,
Svenm
Not good:
Intel, Microsoft Squeezed by $170 Billion Budget Cuts (Update2)
By Ian King and Katie Hoffmann
Enlarge Image/Details
Oct. 13 (Bloomberg) -- Intel Corp., Microsoft Corp. and the technology companies that so far have escaped the credit crisis relatively unscathed will lose out on as much as $170 billion in sales next year as the crunch catches up with them.
Corporate spending on computers, software and communications equipment may be little changed or fall as much as 5 percent next year as the lending freeze spooks clients, said Jane Snorek, an analyst at First American Funds in Minneapolis who has followed the industry for 13 years. It would be the first decline in the $3.41 trillion market since 2001 after the dot-com bubble burst.
``Business kind of stopped dead in the last two weeks,'' said Snorek, whose firm owns Microsoft and Intel stock among more than $100 billion in assets. ``People are pushing off orders and saying, `I have no idea if we're going to have a global meltdown, so I'm not going to buy anything right now.'''
While consumer spending growth slowed this year as the economy slumped, corporate budgets stayed fairly constant until now. Snorek said the collapse of financial-services customers, who account for a quarter of technology outlays, and a subsequent surge in interest rates persuaded clients to pare back.
More data will emerge tomorrow when Intel, whose chips run more than three-quarters of the world's personal computers, kicks off two weeks of third-quarter reports from technology companies. Software maker SAP AG said last week orders froze in September, and a Forrester Research Inc. survey found clients pressing outsourcing and services providers to renegotiate at lower rates.
In 2001, technology spending sank 7 percent, according to UBS AG. The reason Snorek estimates that next year's slump won't be as bad as that is that companies have less inventory built now than they did in 2000 and 2001.
Researcher Gartner Inc. said today that spending growth would slow to 2.3 percent next year in a ``worst-case scenario,'' down from its earlier projection of 5.8 percent.
`Tallest Midget'
As the Dow Jones Industrial Average fell below 8,500 last week and took safe havens in technology with it, shareholders were left with few winners. The Standard & Poor's 500 Information Technology Index dropped 25 percent in the past month.
Intel had fallen 43 percent this year before today in Nasdaq Stock Market trading. The shares rose 58 cents to $15.77 at 9:46 a.m. in Nasdaq Stock Market trading. Microsoft had declined 40 percent this year. Its stock advanced $1.19 to $22.69.
UBS AG's Heather Bellini in New York said she rates Microsoft and Oracle Corp. buys because she needs to give clients something to invest in.
``It's like looking for the tallest midget,'' said Bellini, ranked the top software analyst by Institutional Investor.
She said clients have questioned some of her downgrades and predictions of hard times ahead. ``I had one client say to me, `What? Did people just stop buying software in the last two weeks of the quarter?' I said, `Yes, they did.'''
Intel's Slump
Researcher iSuppli Corp. in El Segundo, California, cut its forecast for 2008 global semiconductor revenue growth to 3.5 percent last week from 4 percent, saying the industry faces ``significant potential downside'' if the economic slump deepens.
Intel may post its lowest sales increase in six quarters, reporting 2 percent growth to $10.3 billion, according to the average of 30 analysts' estimates compiled by Bloomberg. Profit probably rose to 34 cents a share, the survey found.
``We're seeing the beginning of the end,'' said JPMorgan Chase semiconductor analyst Chris Danely in San Francisco. ``For the fourth quarter, I think they'll guide lower. Then the first quarter is a total disaster.''
He lowered his profit estimates for Santa Clara, California- based Intel to $1.27 per share for 2008 from $1.29, and reduced sales and earnings targets for next year.
The outlook for PC purchases is dimming. Boise, Idaho-based Micron Technology Inc., the largest U.S. maker of memory chips, said this month that fourth-quarter PC shipments may be little changed from the previous period.
Microsoft Projections
Microsoft, which reports Oct. 23, may say profit increased to 47 cents a share last quarter on a 7.6 percent sales gain to $14.8 billion, the Bloomberg survey showed. Analysts anticipate that earnings will rise to 56 cents and that sales will climb to $18.3 billion in the current quarter.
The software maker projects that sales in the year ending in June will climb 11 percent to at least $67.3 billion. Slowing growth in PC shipments may hamper that effort, Morgan Stanley analyst Adam Holt in San Francisco said last week. He cut his estimate for Redmond, Washington-based Microsoft to $65.3 billion, an 8 percent increase.
More than 40 percent of firms already reduced technology budgets, according to Cambridge, Massachusetts-based Forrester. The credit crunch prompted many clients to delay contract decisions, hampering the typically high volume of orders in the last quarter, Forrester analyst Pascal Matzke said.
IBM's Performance
About 70 percent of companies have sought to negotiate lower rates with technology-services suppliers, Forrester said. International Business Machines Corp., the biggest computer- services company, released preliminary results Oct. 8 that showed sales rose 5 percent to $25.3 billion, short of analysts' estimates.
At least 3 percentage points of the gain came from currency fluctuations, underscoring that Armonk, New York-based IBM isn't immune to the slowdown. Still, per-share profit topped projections at $2.05, probably helped by currency hedges, said Merrill Lynch analyst Jeff Fidacaro in New York.
Dozens of technology companies will report results in the next two weeks, including Apple Inc., the maker of Macintosh computers, and chipmakers Broadcom Corp. and Advanced Micro Devices Inc.
``I would expect to see some misses that will raise red flags and ultimately could be the beginning of the slowdown that so far has eluded the tech industry,'' said Jason Pompeii, a Chicago-based technology analyst for debt-rating company Fitch Inc. ``We could really start to see the effects of the broader economy.''
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net; Katie Hoffmann in New York at khoffmann4@bloomber.net
Last Updated: October 13, 2008
Svenm
Nothing new here, but I found the following to be an interesting blog on FDE drives (includes a personal conversation with SKS):
FDE (Full Disk Encryption) Hard Drive
We talk a lot about data security nowadays. From time to time we hear people lose their computers and the value of the lost data exceeds the value of the hardware by several orders of magnitude. Yes we all know we can encrypt data. But the encryption solutions available so far have always required a trade. Be more secure used to mean put more work into what you were doing. Set up some encryption software. Remember to encrypt files. Be careful where you store your encryption keys. And do not lose them. But do not keep them together with your data. And so on...
Windows NT introduced encrypted file system a while ago. But it was never perfect. The encryption keys were stored on the same disk drive as the protected data. Not a good solution at all, as in case the drive was stolen, the thieves could recover the keys and decrypt the data. And not many people went to the extremes of storing keys on a separate device, like an USB dongle. And even if the dongle was used, the keys were leaving it temporarily, as most of the encryption algorithms were run by the main CPU, so the key had to be extracted from the dongle to the main memory. And in many cases that was just enough to make the entire protection very vulnerable. As in this case: http://blog.wired.com/27bstroke6/2008/02/researchers-dis.html.
Of course there are more secure ways to handle encryption - do not let the keys leave the security dongle, just let the dongle encrypt your data. Yes, fine, but in this case the data has to be passed to the security device, encrypted there and passed back. Slooooowwww..... Hard drives are already the slowest components of modern computers, so why slow things down even more?
Then Windows Vista came along with its BitLocker encryption engine. BitLocker is clever, as it relies on the TPM (Trusted Platform Module) - the security chip on the motherboard. TPM is engineered to securely generate and store encryption keys. They are released from the TPM as needed, but as the encryption is again handled by the main processor, the key has to leave the secure TPM module. To be honest, when I got my new laptop two months ago, I was tempted to try the Vista BitLocker feature. Until I learned it was not available in Vista Business and I really was not in mood to do any upgrades to the OS I was having hard time falling in love with. The only thing I did was checking the number of BitLocker - related bugs in the Microsoft Knowledge Base. The list was long. With scary titles signaling potential data loss or recovery problems. No thank you. And of course, as BitLocker is an OS - level solution, using it degrades performance (who would want that?).
At 2007 Telecosm I spent a few hours at the bar with Steven Sprague. Steven is the CEO of Wave Systems (http://www.wave.com/). Wave is the leader in security applications and a company behind the entire TPM concept. While I am not a big fan of TPM itself (at least not for all the applications), I was really interested in the FDE drives, Wave made together with Seagate (the so called Seagate Momentus FDE). FDE drive - in short - is a disk drive with security processor on board, encrypting the data on the fly. Steven explained to me the FDE did not require any special support from the OS. The drive is fully autonomous. All it needs is a BIOS supporting ATA Security commands. The security chip on the drive generates a unique AES key to encrypt all data. When the drive is not locked, the key is always released by the security processor and data is transparently encrypted on writes and decrypted on reads. Hence it works just like normal drive, you can write / read anything to it. The only difference is, what is actually written to the drive platters, is AES-encrypted. When you lock the drive (by setting a password in BIOS), the password you set is a wrapper for the key. The security chip on the drive releases the key only when you enter the right password at boot time. Easy and transparent. Buy an FDE drive, install whatever you need on it (the OS and your programs and data) and when you are happy, just set the BIOS password. The data has already been encrypted, and by setting the password you are taking control of the encryption key.
Today the FDE drives are the most secure option to protect your data on a hard drive. And they are the least troublesome option at the same time. From the user's perspective, the overhead is very low - just to enter a password at boot time. No extra software, installation, maintenance, special partitioning needed... Almost plug and play. Plus there is one extra benefit. When you want to wipe the drive, instead of reformatting it, just drop the encryption key. The data left on the drive will be just a noise from that point.
I upgraded my Thinkpad to FDE drive last week. Instead of Seagate I went for the Hitachi 7K200. The Hitachi drive is based on the same concept, yet is more spacious and faster than the Seagate (7200 vs 5400 RPM). The upgrade was a piece of cake by means of the Acronis Migrate Easy 7.0. The entire migration process took less that 3 hours. And now my data is secure. One day every drive will be an FDE drive...
PS. A couple of good links if you would like to dig a little deeper into the FDE subject:
http://www.wwpi.com/index.php?option=com_content&task=view&id=2943&Itemid=44
http://www.wwpi.com/index.php?option=com_content&task=view&id=2669&Itemid=129
http://security-basics.blogspot.com/2007/01/introduction-to-full-disk-encryption.html
Labels: technology trends
posted by Headworx @ 21:20
http://headworx.slupik.com/2008/02/fde-full-disk-encryption-hard-drive.html
Svenm
Zen,
I think I recall Steven saying 10,000 Seagate drives shipped with Dell machines and that he considered that to be an extremely low figure which he hoped would be improving shortly. But ICBW. The number (whatever it was) was mentioned in the first third of the question/answer session.
Svenm
Fullmoon,
I just read your PM regarding the question I posed on July 16 re: Wavexpress. Thanks so much for filling me in on the information you gleaned. That's all very encouraging and it will help me subdue my cynicism in regard to Wavexpress. Hopefully the NBC Olympics arrangement will be as successful as your information would suggest!
Best,
Svenm
Fullmoon, Interesting article. Does anyone know if Black Armour is using the same security technology as the Momentus drives? It appears so but for some reason is not spelled out on the Seagate/Maxtor spec sites.
I've brought up this question before about government agencies' desires for access to the drives' contents. Though this article is by no means conclusive, it points out that that may be a factor in the delay of government adoption. Funny, the FBI doesn't have backdoor access to peoples' minds. Perhaps it's just gotten too convenient for them to look inside computers instead.
Just musing,
Svenm
Kite,
I value freedom as much as the next person. If you read my post you'll see that I'm referring to what the feds have (or have not) done in regards to hardware security thus far. I didn't recommend that they mandated it. Of course, that wouldn't be possible in any event. But they could lead a push in that direction if they had a uniform desire to have it done. I'm just pointing out that that isn't happening, and I'm trying to figure out why.
Reasonable people can argue when mandates for the greater good are imposed. Seat belts come to mind as well as air bags. It's a gray zone and arguments can be made pro and con. I accept your con vis a vis hardware security. But it is by no means clear (to me at least) that Wave will gain traction by enterprise pull alone.
JMHO,
Svenm
Countryboy,
As always, your finds are salient and interesting.
Thanks,
Svenm
Snackman,
I reviewed the last four cc's and an annual letter and was not able to come up with those numbers. I assume your question was rhetorical so I'll let you answer it yourself. While you're at it, I have a couple of more questions for you: 1)How much has been spent so far on Wavexpress and 2) What do you expect the ROI to be?
Svenm
Alea,
Good points. Agreed.
Svenm
Dory,
The fact that the federal government has not assisted, either by mandate, or by widespread example and by forcing vendors to embrace hardware based security technology, should make one pause. For the sake of security the government can, and does, act quickly when necessary. Their lack of doing so in regards to TPM's leads one to question their resolve in this regard. While some agencies, NSA and the U.S. Army, may see a positive benefit from hardening the nation's computers' security, others (DOJ e.g. may not). I think there is an ongoing discussion on that level that is by no means resolved. Perhaps the Fed's will solve it by allowing backdoor entrance, much as the Chinese most certainly will. There's no question that important elements of government bureaucracy benefit from our lack of privacy.
JMHO,
Svenm
Fullmoon,
Maybe you could share that detailed answer? I, for one, have long wanted to see WXP disposed of. Never mind getting some pie-in-the-sky $40M for it either. Just eliminating the cash drain would have been fine for me. Alea's arguments are perfectly clear and rational, and to my mind, irrefutable. Basically, this has been corporate welfare for a few Spragues.
In the absence of some remarkable info in your detailed answer I fail to see any value in WXP for the majority of WAVX shareholders.
Svenm
CM, As I remember you know Drummond Reed pretty well? He's on the steering committee of the newly announced Identification Card organization. Would you be able to communicate with him and give us an idea of the organization's background, mission, and timeline (and anything else that may be of Wavoid interest)?
Thanks,
Svenm
Doma, You wrote "waiting 4 years for the DOD to deploy Trusted Computing is even more boring..." I agree it's boring, but it's also very disappointing and it has definitely been very detrimental to Wave's progress. In fact, despite all the DD that has been presented on this board (special thanks to CM) re: the government adoption of trusted computing, the fact that it has not occurred (the NSA letter of approval is still only in the status of DD--to our knowledge it has not resulted in any signifcant numbers of Seagate FDE.2 drives having been sold) has led me to think that perhaps Wave's biggest problem has been governmental ambivalence towards more secure computing for the masses. After all, there are now many instances of successful governmental prosecutions based on easily obtainable evidence from computer harddrives. Programs such as Carnivore monitor email of huge numbers (maybe all)citizens on a regular basis. Perhaps powerful interests within the government are reluctant to give up that advantage and are actively resisting trusted computing. Wavoids take for granted that the "government" would benefit from securing their computers with trusted computing. I used to think that but I'm beginning to feel that perhaps that is too simplistic an analysis.
I doubt that enterprise deployment will be rapid without a push from government. There just isn't a compelling enough reason imo. Perhaps it would take place slowly as the advantages became clear, but without the government pushing I doubt any rush to enable TPM's will take place.
This represents a significant change in my opinion in regard to the technology, but I am trying to understand why my anticipated sales results are not taking place.
JMHO,
Svenm
Ramsey,
Nice post. It's been a little surprising to me to watch the implosion of a substantial number of the stalwart wavoid long community. Having reviewed the transcript of the CC (I hadn't listened to it) it seems to me that though progress isn't as quick as we all would like, there is definitely progress being made. The software and server packages are beginning to be sold, the early adopters are stepping forward. The fact that it is slower than hoped will unfortunately cause more dilution. Nevertheless, huge amounts of resistance have been overcome and this technology is now becoming a commercial reality. There is plenty of reason for optimism. One just has to look in the right places. Yes, SKS has a history of hyperbole, unwarranted near-term optimism and truth-fudging. But would Wave be in a better position if he had been broadcasting that near-term prospects were zilch, and just hang in there for the future? I doubt it. I invested in this company because it looked like the best bet for me on a need that seemed obvious: the ability to safely keep secrets digitally. I don't think that's changed. It's just taking longer than I had hoped.
Best,
Svenm
Q4 Transcript. In case this hasn't been posted anyone can read the Q4 transcript at: http://www.unclever.com/wavx/
Thanks once again to Unclevername for the effort!
Svenm
Awk, Nice find! That seems to make a good case for the need for TPM management software.
Svenm
Sheldon,
Thanks for the clarification of the Hitachi/Phoenix device.
Svenm
Dreamer, Short answer: Doubtful. Small detail: on your calculations I don't think that Wave gets the full $7.50 per FDE loaded drive. Count on $4, hope for $5. 500,000 upgrades in 2008 is way beyond reasonable expectations. If it happens we'll have a great party in Vegas this year. But you're not talking hockey sticks here; this is more like an Atlas rocket, and so far every projection has fallen short. Doubtful, but longshots sometimes do occur.
JMHO, Svenm
Hi Alea,
Hopefully we'll get some clarity, and hopefully NEC Japan will follow in NEC Computers (Europe) footsteps!
Svenm
Alea, You're right. It doesn't include Japan.
From the PR: "A subsidiary of the Japanese NEC Corporation, NEC Computers is a leading supplier of state of the art servers, desktops and notebook computers, designed and manufactured for the business user. Design, assembly, marketing, support and system integration activities all take place at the technological and industrial facility, based in Angers. Target markets include Europe, Middle East, Africa and Latin America." With $100/barrel oil there may be a need for computer security in the Middle East! (lol)
I would think that the $5-10/unit is intact, if not higher (than the Dell deal). After all, this is a much smaller volume affair. SKS would be crazy to give NEC a better deal than Dell. Whatever he made from NEC he would more than lose to Dell after Dell demanded, and got, a lower unit price.
Svenm
Hi Alea, I've been wondering about NEC European volume as well. The best I could come up with this article below from the International Herald Trib. The sale of Packard Bell did go through, but NEC appears to be selling its business notebook Versa line in Europe, and all three appear to be bundled with STX FDE drives and Wave management software. If the 2.8% mentioned below applies to Europe it is not a huge number, obviously. On the other hand, if it applies to the 20% of the Japanese market it would translate into an important revenue stream for Wave. Does anybody know if the Japanese Versa line includes the Momentus FDE drives with Wave software. I took a stab at the Japanese NEC site, but alas, my Japanese skills are not up to the task!
Svenm
NEC plans to sell Packard Bell unit
Published: WEDNESDAY, JUNE 21, 2006
TOKYO:NEC said Wednesday that it was in talks to sell part of its European personal computer operations, whichwould lead to its withdrawal from the home-use PC market in that region.
Shares in NEC, one of the largest Japanese electronics conglomerates, rose slightly on the news. The company declined to give details, including the name of the potential buyer and a sale price for the wholly owned unit, Packard Bell.
The Nihon Keizai newspaper reported Wednesday that NEC would sell the majority of its holding in the unit and that it was talking with Lap Shun-hui, a China-born entrepreneur who is one of the founders of eMachines, a maker of low-cost personal computers that has since been bought by Gateway.
A price has not been decided, but it appears to be less than ¥10 billion, or $87 million, the paper said. Packard Bell has annual sales of about ¥130 billion, but it has been unprofitable in the past few years.
Goldman Sachs said a sale of the European operations would be positive."We view favorably NEC returning to a stance of exiting businesses where it has little chance of creating value," a Goldman analyst, Ikuo Matsuhashi, wrote in a note to clients.
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NEC holds the top position in Japan, with more than 20 percent of the PC market, but it has had limited success overseas.
In 2005 it had a market share of 2.8 percent, according to the research firm Gartner.
Its PC operations posted an operating loss of ¥7 billion in the financial year that ended March 31 on sales of ¥680 billion, accounting for 14 percent of group revenue of ¥4.8 trillion.
NEC runs European PC and server operations for corporate clients through another local unit, and that business will continue regardless of the outcome of the talks on the sale of Packard Bell, an NEC spokesman said.
Doma, Great find! On the spec page(read only) on the NEC European site it only says "TPM chip support" under security and 80/120 G SATA 5400 drives. But there do not appear to be options so I think your conclusion that Seagate drives with Wave software support is standard is correct!
Svenm