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Dig
I do not expect revenues to double from Q3 to Q4 and nothing that Wave has said in public suggests to me that will happen. I believe my pick was about a 50% increase although I have not tracked the results with precision. And they still will have a leg to stand on but which is getting a little weaker quarter to quarter.
Obviously the lack of any new public information since last year cannot be considered a good thing but the window is still open. If a lack of upgrades and expanded partners continues through the next two quarters, then I would consider it to be quite serious both because it is a sign that things are not going going as well as has been implied and they will be seeking additional money in a weaker condition through PIPES which will be more difficult to execute.
It is easy to go along with each little tidbit that one comes upon especially if it supports what you are hoping to hear. However and perhaps unfortunately there is also a necessary reality to this investment which has been deferred for an extraordianriuly long period of time.
Wavx
It is very plausible that Citigroup represents a WAVX trusted computing pilot.
Alea
The stuff I have seen and heard and the public activity that we are seeing are not well in synch.
So we have
1) the comments were hyped, misleading, wrong etc.
2) they are moving along as planned but necessarily for a variety of reasons in a non public manner
3) they are stuck or things are just simply taking a lot longer than anyone anticipated or hoped
4) they once were but are no more
I agree with you that we don't have sufficient solid information to evalaute much and thus forecasts continue to be what you want them to be.
I suspect most of us remain optimistic because we don't see any direct losses to competition (as we define it). That would all change if TPMs didn't become a key ingredient in the new trust solutions but for me it stills seems like TPMs are here to stay and be used. I do think that anyone who thinks they know anything for sure either works in a senior leadership position at Wave or is full of it.
So SKS will get your attention when he replaces Michael with someone connected to content.
They tried once with Jenks but he could not get it done. I actually expect something like this to happen but by the time it does it may not matter.
I believe Ingram Micro appeared after Gateway.
goepling
from Wave's perspective, the big question will be how the federal government decides on the use of TPMs. Without TPMs, there are a variety of options which run on different computers. For example my company just started using PointSec by Entrust with a combination of Dell and Think Pads deployed. And few TPMs. But if they decide that TPMs should be part of the solution, then that changes the landscape and obviously places Wave in an excellent position.
Doma
I am not following these details so closely (but maybe that is an advantage). When I think of Protecttools, I think of a suite of functionality that is not entirely and solely tied to leveraging the TPM. Is that a correct assumption? If that is correct, then I could easily imagine a statement that it is compatible with all PCs even if there was some exceptions to the rule for some PCs for some functionality. This is marketing and not a detailed assessment of what it means to be compatible.
Doma
This may be absurd, but maybe the people who made the HP decisions didn't fully recognize the implications or assumed that the protect tools could do the job. If you recall, Infineon's literature suggested that their software worked on all TPMs because there was a standard. I have seen many corporate decisions made that seem silly in retrospect, that I would not be surprised this is the case here. Now that they are in this position, the question is how do they best reolve it - drop Boradcom, simply stay as is with reference to a thrid party or bundle some level of Wave. If Wave does not want to invest the money and resources to integrate ETS inot Protect tools ( I am told that but I don't beleive everything), then the choice is more limited to HP. Since they make a big deal out of ProtectTools, I am sure the corporate branding folks would not be inclined to have a HP ETS out there at the same time. No easy answers.
alea
I've assumed that SKS doesn't break things out becuase they will not appear to be impressive. However I would hope that booked revenue would both dispel concern and maybe even give guidance. If deployment was low but revenue per unit was healthy, then the outlook could continue to be bright even as there was concern about the number of units. If he doesn't explain further and revenue doesn't pick up and b/e continues to be ephemeral, it would be difficult to remain optimistic (while being in the dark).I haven't taken most things that SKS says at face value for a long time; however I do treat public statements which are repeated in different venues with greater credibility and hope that doesn't erode.
Kant
isuspect that wave's meager contingent spent their whole life making Vista work on Dell's platform. After ll if it doesn't boot up and link to the various security features, there is a problem.
Pickle
It is quite good. Towards the end, it almost sounds like the original Embassy concepts stored in the harddrive instead of the chip. No coincidence.
Dory
I assumed that the government wanted to make sure this was the case becuase they are buying both HP and Dell computers. And HP wouldn't objecxt per se to an announcement by Wave that this is the case. While it oculd be more generic than that, I would think the catalyst was a client (eg government) and once Wave achieved the cert (whoever did it), it was convenient and good to say so.
ok
I thought it was clear this was government driven or have I missed something?
ZZZZ
When SKS says thousands, you should think as little as possible and be surprised. Over the year's I've spoken with him and seen results, I found that my expectations were a lot higher than his. He may think 1 million in revenue is a lot higher than before(which it is) but when you've waited for what seems a lifeime, I'm already past that and would hardly say anything at these levels. So I'll go with 2,000 upgrades and 20,000 upgrades until he says 8,000 and 80,000. Don't get me wrong - I hope its 800,000 and they achieve what I expected for a long time. But one of the biggest mistakes I've seen made here is the extrapolation of some comment into wishful thinking. And SKS doesn't discourage that because it has generally served Wave well. In fact it's that issue that generates a lot of discussion. Was he deceitful or did we just over estimate. But you know the song "Don't be Fooled Again"
kant
It was Brookside Capital , a hedge fund associated with the Bain Family that did that. But rememebr they bought at 34 when the price was 42 and sold their holdings netting a profit. A familiar financing strategy to be repeated multiple times. It had nothing to do with the perceived value of Wave - a notion which became clearer later.
ZZ
Still the hook is how will enterprises manage the drives. If someone else doesn't come out with a strong key manager, the extra from TDM will be an increment to some reasonably high basic revenue.
lincoln
What I heard and thinking was 1 million drives and something like $5 for TDM. I did not hear you need to buy a $50 upgrade in order to utilize TDM to leverage the Seagate drive. If that were the case, we'd be in clover.
Now you can make the arguement that an enterprise would inevitably buy the whole deal in order to manage the drives and thus SKS really said conservatively we will generate at least $50 million and breakeven is obvious. Why are you even asking. As I'm writing this note it seems quite likely but I've thought so many things were obvious before??
breakeven
I had the benefit of listening now and not before. During the be discussion SKS talks about 1/2 to 2/3 coming from licensing revenue and then talking about 2.5 million coming from upgrades. At least that is what I remember.
As I was hearing this, I concluded his revenue target was above the 4.5 million I thought of as quarterly burn. Still I found these projections as somewhat foggy and imprecise; that wouldn't be much of an issue except in prior calls, the break even target seemed very clear and repeated several times.
In my opinion, the comments could be clearer and better grounded and thus not create all this discussion and further call into question other forecasts and comments.
As for other aspects, I still feel like we are dealing with tiny revenue amounts. 10's of 1000's of upgrades is still less than $1 million. 1 million Seagate drives is less than $10 million dollars. 20 million TPMs is less than 10 million. None of that adds up to grandiose amounts and thus expectations of share prices need to be tempered accordingly.
It will only get interesting if and when we are discussing whether there are 1/2 or 2 million upgrades a quarter.
Eamon
There is still too much fog here. Wave had indicated they wanted to fully utilize the shelf and have also indicated that they could use more resources now as the market is engaging. So I think they would have acted as quickly as they could and felt the price was about as good as it was going to get in the near term. Also if revenue is engaging then the quicker the market feels they won't be going back to the well, the better. So with positive revenues and some cash in the bank, the overall outlook will be more positive.
The fog I refer to is simply our inability (or rather SKS' inability) to articulate clear guidance that stands up. We shouldn't need to parse statements, guess what periods it applies to and then be unable to understand what has changed. If he said, the expected volume through Q2 was less than he expected before, or the average price was less than before, and thus he was extended his outlook a quarter we would understand. He also could have said that he expected breakeven because of upgrades in any event. Instead there are dozens of posts seeking explanations and looking for missing numbers. That's a failure by him to be clear. Now he may not want to be clear, but that's another story.
orda
As far as I know, the TPM can be turned on remotely under the 1.2 spec. I've seen this comment before but I'm wondering where it comes from. If it is an individual, I can see that. But an enterprise with remote TPM management capabilities, they should be do it without touching each machine. I also think the process by which machines are built and images loaded initially may be another way of enabling the TPM. I don't believe it will ever be necessary for an IT person to visit each employee to turn it on.
Orda
When my company or most any other company installs machines for their employees, there are a number of automatic builds and remote mass updates/upgrades. So one way or the other, TPMs will be enabled without the user needing to do anything other than being connected to the network. Whether the actual TPM is enabled upon purchase or not is not known by me but I don't think it matters now. It may be a more relevant question in a consumer rollout. I would assume Vista makes it easy to do however.
CM
I have not heard the call yet but if this is helpful. About a month ago when I spoke to Steven, he alluded to a comment Cisco made. It was a complaint that Vista did not provide all the support needed around the TPM (I've forgotten the precise reference so I won't say authentication but it might have been", SKS laughed and said what wasn't said and what many people don't realize is that Wave does and he looked forward to the time people realized it.
I also know, referring to another post, that Wave in intricately involved with detailed implementation of Vista because of Dell. I don't know, and I didn't pick up any inferences that they were doing something special for Microsoft, but because of Dell they were working with each and every instance of Vista as it was being locked down.
So if third party tools are needed to implement Vista in an enterprise or other commercial environment, Wave is in a very special, if not unique, place.
Over the weekend, I'll listen to the CC.
P.S. I always took SKS' b/e comments to mean that the monthly revenue rate would equal the monthly expense rate by July 1, 2007 based on the chip licensing revenue with their known OEMs based on the the volume shipment expectations that they provided to SKS. Personally I've assumed that this would be conservative in that there should be more than $1 of other revenue being earned by that date. We may not know the outcome until that day passes.
DRM
I believe Wave is being supported by the Democrats and the Republican obstacles have now been removed from our DOD contract?
I'm here in Paris but don't want to waste my time going to Cartes instead of visiting musuems. Perhaps I should go there and find out?
VH
I've been assuming for awhile that Wave helped them build the connection to a TPM just like they did for Seagate. We'll know soon enough. It would certainly be a coup since at some point FDE capable drives will be standard and that would be a lot of plugin's plus a seat at everybody's table.
Barge
it is this very point, no upgrade to Ultimate, that caused me to say that there is no consumer push. Of course you could counter that this version will be sold by content providers as part of their premium service deal with Microsoft and that is why it is being handled separately.
Xpress
I started thinking about this given all the recent attention. I wonder whether Steven and michael share the same objectives or perspectives on Xpress? Is Michael as advertised a techy at heart and satisfied with the game channel? My sense from my conversations with Steven is that he wants to make a business proposition to say Comcast. Could it be worthwhile for Comast to earn dollars from a Direct TV or a Time Warner or just a rabbit ears consumer? Does the subscription management model allow them to deliver access control content to my PC if I am a Comcast subscriber in a different manner than me going to their website or with different content than I could through the set top box. Is their value proposition better if I can get Comcast channel on my PC anywhere in the world without one of those slingbox devices?
Barge -
Did you write this article?
Barge
I'm not sure what I was thinking as both seem to fit- your choice. I seem to recall doing that once before (maybe with the same word).
P.S. I'll be amazed to see massive consumer deployment in early 2007 and even more amazed if Wave is part of it.
Barge
You've said many things. Many aspects are inciteful but it sometimes hard to separate the accurate points from the wild proclamations. But yes among your points has been hype for Xbox and consumer trusted contnet distribution. And by the way, the Xbox comment came from Steven , not I.
Barge
The XBOX is a large "stealth" consumer demo for trusted content distribution. When it changes stripes to something announced and broadly used is a good question.
Mbondo
Didn't do the math but maybe zero.
Doma
While I am a bit disappointed that they didn't want to or could not wait for the stock to settle above $3.00 before financing, this should be the last time (at least under these circumstances).
The breakeven estimate still seems to be sticking and in my conversations, I picked up that there was a need to add resources to execute to meet demand. It seemed like they wanted to do this earlier but were unable to fully fund the operations. The Seagate push starting now as well as the imminent release of Vista are likely the catalysts for the stock strength and the ability to fully fund today.
Alea
I actually meant applet charging and some metering. This is now on an entirely bigger scale at least in terms of underlying industry. However it is simply impossible for me to look at a company with revenue of 1 miilion dollars today and believing the possibi1ity never mind the capacaity for 1000 times that amount in a few years. That's when people like barge come in.
alea
I agree. i don't think that Q3 is instructive for much except for a demonstration that our partners are selling more computers with our stuff bundled in. Sort of on auto pilot. Since I've only heard of some pilots moving forward, I have no reason to think there are major upgrade sales. but those pilots are moving into monthly procurements so I expect to see some signs in Q4 with a growing base each and every quarter thereafter. Vista and FDE will be the drivers.
Wave has always had success convincing outside investors that there is a great story here. Unfortunately it hasn't moved the way it was predicted to move. But al the pices are there and that's why the stock is now going up. We can only hope this time is different. it always seems different but that's human nature.
Alea
This vision actually goes beyond anything that was even contmeplated back in 2000 when we naively envisioned Embassy metering all digital content. However with the burden of more maturity, it seems almost implausible for a company to achieve this in broad daylight now a days. On the other hand, Google wasn't exactly hidden and that's a post bubble incarnation.
CS
I believe Wave needs more resources to deal with upgrades. Not proportional to revenue but they've been relatively lean for a while (and for good reason) but that luxury if you can call it that is now gone. If they can, they will undertake a placement for as much as they can get to put this to bed now when interest is apparently rising. There are enough projects underway and with the imminent release of Vista and FDE, they need to be ready now and not blow it. Execution is now the key focus and they have to be able to deal with whatever volume and issues associated with the ramp up. They will not get many if any more chances if implementation doesn't go reasonably well.
Dory - not true forget it
Weby
I don't necessarily think of it as $50 or $10? In order to get and maintain the $50 target, ETS will need to continue to provide value and some aspects can be commoditized over time. It may be that the FDE is the thing that provides the $50 value and increases the number of upgrades with server tools dramatically.
A good problem for us and wave will be when their sauce is in so many parts and in so many different configurations that they have to rationalize how much they get paid for the same thing.
Zen
I am not sure the type of battle that was being fought. There is always a tradeoff in the amount of revenue received depending on where you are in the chain. If the buyer wants to be connected with a TPM then I believe they need Wave's ETS. If they don't, then they don't need Wave for this purpose. For now, these are focused on laptops and will be offered by PC OEMs. So we'll have to see how the OEM addresses this opportunity. For an enterprise, I still think you are back to managing all your keys and needing the full suite.
Alea
The description of a potential strategy for Wave sounds a lot like the Wavexpress discussion. Get a piece of the desktop, work with content providers and enable a trusted subscription for each user based on what they subscribe to with the agreement and support of the content providers.
While the focus was on Media Center in the Xpress discussions, this is just ETS on an OS with a server side trusted application enabled with Wave's CSP. Especially interesting if they can take their internal client pilots and then meet with business leaders and extend the focus outwards.
You can envision the type of sales people they will need in the future although I assume they will get help from some of their IT business partners.Interesting concept for HP or EDS if they manage the IT operations.
Waverider
What does your comment mean? It is entirely cryptic to me.