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b_p/blue,
yes, the Q3 report (beginning of Nov) is the first Q report that will report on the mgmnt defined performance measurement window, the last day of Q3 being Sep30, any business between the July1-Sept30 being reported then.
Q2 has been long marked as the ugly quarter, Q3 being marked as the first Q to reasonably anticipate material evidence of turnaround, but it does not involve waiting another 8 months.
barge, I'm not tying to imply anything, mine were a collection of things i think are. I couldn't fire up even a single neuron on where or how Mr Collins gets his content. I simply could not give a flying monkey. This is not meant to imply good or bad things about Collins or anybody else, just saying it has an impact factor of zero.
Mr Collins' letter was good fun, basically mirroring many of the comments made here.
I have zero interest however in trying to parse anything vaguely resembling timeline notions from Mr Collins.
Solms runs the company, he has had and will continue to have opportunities to address shareholders, his statements and his statements alone are what I use to develop expectations and measure performance.
and now we wait /e
A carrot of a different color:
re BellID-Wave PR : "The companies have executed a letter of intent and anticipate the signing of a definitive agreement in August."
re MU-Wave PR: "The companies are targeting the second half of 2014 for future announcements regarding products in development."
coupled with the drumbeat (for almost a year now) that VSC is all about showing up for real 2nd half of 2014 and one starts to get the impression that management plans for the second half of 2014 to be pivotal in the turnaround thingy.
at least they are consistent and for the most part haven't been moving goal posts around much. a little softness introduced on the notion of 2 significant gov thingies 2014 being the only example I am aware of.
alea/blue,
the point re: opportunity cost vs what to sell, what to spend time on etc seems pretty solid to me, the whole point of a turnaround is to focus ... pick the most promising near term things, clean them up, focus, and get them moving, at the expense of not focusing on other things. I would add to this the 'impression cost' of contuning to push out things that need service/work, and that the impression cost may be durable, so the effort to sell a turnaround story to not just investors, but to customers, involves NOT selling things that are night clean, pleasant, easy, and functional.
as for as obfuscation etc., certainly at the top, I am inclined to speculate that it was 'shiny object syndrome', that SKS got bored with things when it started to become work to actually clean an invention up and market it, it started to seem real (which cut into the dream of it being worth a trillion dollars with a margin of 99%) so he dreamed up new projects. these aren't bad projects per se, but they distracted from closing the deal on the last project. I think this filtered through the company and undercut moral for those tasked with getting products out the door. there was no leadership on 'old' things like VSC, ERAS, SED management etc, I doubt SKS could be bothered to participate in problem solving in those areas, but all the power was his, and the focus was elsewhere.
at the 'launch' I thought GK was very solid. clear, concise, fluid, at complete ease. The first time I have seen anybody from Wave talk where I was pleased. Solms does fine, I'm happy with Solms, he's the front man for the plan and the process and the direction .... and when it gets technical he hands the ball off (to e.g GK or this other guy for the webinar demo thingy on Aug5). SKS never handed the ball off, and while his understanding is top notch (well above Solms) his presentation was atrocious, insulting, incoherent, repulsive, demeaning, illiterate, rambling, and arrogant. Oh, and SKS didn't have very good presentation skills. So he abandoned the post on leadership of getting products cleaned up and sold in favor of whatever the new shiny object was (one where the dream had not yet been inconvenienced by reality), and would mix in an occasional effort to sell things by doing one of his atrocious, insulting, incoherent, repulsive, demeaning, illiterate, rambling, and arrogant presentations.
GK really came across as somebody who has his eye on the ball. Wave's leadership is now Solms, GK, and the CFO. Previously it was SKS, SKS and SKS.
I hadn't really been paying that close of attention,
but the broader market is getting pummeled a bit. The point is there are times where there are benefits to an equity not being listed in the major indices like Russel 2000 etc, the stock tends to correlate less.
tkc, I'm expecting worse. I just expect Dell to be much worse, expenses to have gone up some, and other revs to be weak as well and fail to revert to norm. And hey, IWBW too. The only things I imagine might temper that are perhaps some MU development/services revs (high COS) and maybe some early Samsung bundling to take a small dent out of collapsing Dell. But it is all really just pulling a bunny out of my bum. We see what is when it prints.
blue, I wasn't intending to say you expected a full turnaround real soon, I was unclear on that.
I am inclined to rely on a hierarchical process.
If the inherited pipeline was empty,
Then there was nothing to sell.
If the sales cycle is X,Y,Z quarters,
Then I expect no sales before X, but expect some sales prior to the end of Z.
Much of this may revolve around T=0, you seem to imply a T=0 sooner than mine.
Given the notion that the products themselves required significant improvement, this influences when I would mark T=0. One could e.g. use Jul22 as T=0, but Solms was pressed on this at the SHM and seemed to allow RSA in Q1 to be a conceptual T=0 in terms of VSC. I can't go and assign a T=0 of e.g. 8 months ago by fiat.
FWIW the new guy did say the pipeline was effectively empty, did say the products were flawed, and did project sales evidence for turnaround into Q3/4 of 2014. With that I am only left for looking for evidence as to if that will be possible (things like launches, press, partnerships etc).
By my process not only do i not expect the sales I think you are referring to, they are not even permissible if one follows the framework.
it seems you broadly accept that the pipeline was b.s., and broadly accept the notion of sales cycles, but it seems to me that your are essentially saying the pipeline was empty, but not completely empty, the products were bad, but not completely bad ... hence somewhere in all of this there should be sales (some combination of dry leaves and bad products = at least some sales), and my process says there simply can't be.
Regarding no small sales, VSC is not Wave's only product and I expect there have been a significant number of small sales in Q2, that is I do not expect the non-dell licensing line to be $0.00, but I guess we'll see soon enough.
One of the difficulties I expect (for Wave) is it likely became important to NOT sell things, if VSCv1 is really pretty cumbersome, one is better off delaying until one can get a more attractive product into the customers hands, one more likely to establish a favorable rep and lead more likely to follow on sales.
So, I expect the preponderance of Wave's sales has been SFND DLP (it was a big chunk of last Q) and presumably some ongoing SED related revenue. but not zero.
Wave is about 16% of the way through their self-defined performance measurement window.
cartoon, it is not that 'it' worry's me per se, more that player made an argument that a near term SP cratering could directly effect sales, and it was spoken with some confidence, if I accept the premise then a dismal Q2 with nothing else could precipitate such a SP cratering, ... but if player thinks that correctly, then certainly Solms' presumably capable new sales folks would be aware of that as well, and if there is such awareness then there might be evidence of such awareness (alternatively player could be FOS), and hence the IR comment ... the timing of IR reaching out, a Bell PR, all might be considered evidence and may well indicate that management and player are in agreement ... and if that is the case then given what is in front of me now concerning the potential for a SP cratering and all of the above, the Digspaceticspookometer(tm) twitched.
matt, I read some sort of demo thingy then, that's all.
The recent outreach by IR to investors mentioned elsewhere would be consistent with near term concern (absent any equity funding requirements).
hmmm. Does tickle the Digspacticspookometer(tm) a biit.
thanks for your input.
player, In short, I wasn't putting much importance on the near term consequences of the SP potentially cratering in the context of presumably not needing to visit equity markets in the near term.
You seem to be saying that is an error, that a near term cratering of SP could have a direct impact on perception and hence the ability to sell products.
If management shares those views then presumably some combination of Aug5 glamour and/or Q2 CC guidance would be a must (as you indicated).
I'm not arguing one accepts whatever happens, I am saying it is difficult to provide guidance without knowing what the values are.
You assert small deals may have closed (and I'm talking specifically VSC) and they may well have, or not. In the absence of any closing and perhaps them still being viable one ends up with a 0:0 for the key decision maker, which for me is uncharacterizeable.
It seems you are saying they gotta say something, that a flounder is unacceptable, that's a reasonable position. My position is that the pipe lacks the maturity to determine the ratios you speak towards, and these are the ratios that afford rational guidance. Sure, one could just adopt and apply some sort of industry ratio notions, but until demonstrated that has nothing specific to do with Wave and would strike me as a reckless approach to guidance.
I definitely agree that showing up at the Q2 CC empty handed (my ongoing concern) would not be desirable. I think I said in the past the outcome could be "punishing".
We'll know soon enough.
**good points. it would seem that doing pipeline metrics requires that the whole pipe has been realized, as the delivery end is still dry it seems untenable to establish leakage rates, throughput, and kinetics to the pipe. this doesn't prohibit an exercise in farming (particularly carrots), but seems like something they hope to avoid if they can.
That Aug5 is 2 days before a CC that they (as you pointed out) could kick down the road for another week, one hopes they have a plan - and the tools to implement that plan in this comparatively narrow time slot.
** if they pull it off, that is if they effect and adequate stir Aug5 to salve the Q2 two days later, then is will be a significant second managerial triumph (the placement being the first, I think even the PP detractors have likely thrown in the towel on their condemnation at this point).
the previous admin seemed always want the whole enchilada, fearerd 'giving up the keys to the kingdom', which perhaps made them both a poor partner, and more broadly too risky and too untested in what they hoped to accomplish.
It seems the new guys recognize there is already a kingdom, people already have keys to the kingdom, and Wave initial role is more sensible to get in the game. And play nicely (WYY).
Folks are looking at total EMV in error IMO. Bell/EMV has chip cards deployed that are effective that they manage (a kingdom with keys), they have no interest in surrendering that. There is more of a problem in NA, such chip cards not in favor, so Bell/EMV seeks to compliment their abilities ... not replace them, in particular markets with respect to a certain class of transactions. Much more incremental, much more play nice, in reality much less reliant on Wave. Wave provides a capacity which represents value in a certain segment - the incumbents will handle the rest.
hmmm, an interesting idea,
but to provide a pipeline x-ray and be late would be devastating.
They did the recent placement, they currently have adequate capital hence they have no material reason to risk rep to buoy the SP nearer term.
They could, quit reasonably, allow the SP to flounder, not deliberately, but just not alter their methodology on what they announce and when.
I could see guidance on Samsung bundling (if it is actually shipping in some volume, if they have some numbers on that, if Samsung is providing any sort forward volume guidance). The bundling revs would be a pretty harmless piece of guidance, if they know its coming they can speak towards it.
The whole pipeline guessing when a VSC deal closes thing is a minefield, too reminiscent of the last guys.
A small reference customer (if Aug5 affords such a thing, which I think is somewhat unlikely) they might be able to speak towards that - 'we made an initial sale of 1000 seats, we are in talks with a couple that are reasonably far along and are 5x and 50x larger, those talks are progressing as planned' .... but I doubt it.
The potential of an empty-handed Q2 CC in the context of ugly numbers has been a meme of mine for some time, as it stands it looks to be shaping up that way.
I'm thinking the 8th could present one of them thar "opportunities".
Maybe they pull a bunny out of the hat with the Aug5 demo and have some sort of case-study reference customer (even a small customer, sub 8k) to hint towards material traction in which case they would not show up to the Q report CC entirely empty handed on the sales front ...
but ... I can't see the Q2 numbers being anything other than ugly and a little bit of a dirty thrill for dubyakays and a thrashing point for 'the beef should have arrived by now' folks.
So maybe they have moved far enough along for Aug5 to salve the pain of Q2 numbers.
With EMV it would be applicable to the
subset of transactions where Wave's technology allows the conversion of a CNP to a CP transaction, we are not talking the whole universe of EMV transactions.
Middleman solutions may well reduce the size of this subset (e.g. Paypal), or not.
yea, but you had to know it was coming,
there have been musings by Solms about efforts with EMV and talks and so on, and as this is likely a work in progress it seemed inevitably their would be the "partner" announcement.
With Finread it seemed like Wave was really trying to be the whole thing, this effort seems considerably more modest, attempt to piggyback Wave's technology with a current solution provider and sell it to the banks.
For reminders, the model was (in the future, when something actually gets developed) that for transactions where Wave's technology was able to convert a CNP transaction into a card-present transaction that they would get a sliver of the fee difference. It is a potentially valuable thing for Wave to get into, it is not a near term thing.
Definitely part of the tomorrow stuff.
Basically, VSC today (and SEDs and some SFND DLP presumably) with things like WEM and EMV as a couple tommorrowish notions.
Yes, Wave's position as a
"story stock" has for some time been completely trashed. Should they begin to execute re:VSC, and should development with outfits like Samsung and Micron pave a way into mobile that is cohesive with the current PC/laptop/notebook space one could imagine a story being built.
**The Loop Group seems frustrated,
a number of complaints about the current regime's lack of communication.
I think what the complainers are failing to observe is that their thirst was satisfied in the past by a river of BAD information.
I would recommend they revisit the process ... what is better 10x more information that is 100x less reliable, or 1/10th in information that is 100x more reliable.
There was all sorts of WEM information, public and private .... yea, that was good stuff, eh?
If the concern is on the vision thing I don't know what to say, it seems pretty clear to me. Those things they hope to do are vague, those things they will do are clear.
**Previously those things they hoped to do were clear, those things they will do were vague. If one requires a firm declaration of a transformative position atop a pile of gold, then one needs counseling. Those are hopes, everybody has them, but rational leaders don't present them as inevitabilities. They plan, they position, they indicate direction and then they seek to execute. If one thinks the longer term plan or direction are particularly obscure, it may be that that is what the truth is and has always been.
Who the frik knows how mobile TPM is going to pan out, but the direction is and has been clear. Stop judging and start listening.
barge, you said:
"Every CEO plays that game of expectations! "
that is simply not true. I await a link to a single Qtrly CC from another CEO that compares even loosely with SKS' tripe.
What you call normal simply is not, now you run for a fig leaf of frothy.
The opposite is what is normal. Stick to your guns barge, dig up a link.
barge, I am afraid you are just wrong,
most CEOs don't play a game of setting expectations of which they meet none.
Most CEOs do exactly the opposite. Open a magazine, turn on the T.V., do something to visit what most do on the matter of meeting expectations or failing to. Most lower expectations in order to ensure meeting them. The whole earnings calendar is entirely an exercise in the company doing everything it can to cajole investors into a expectation window that the company will meet or exceed.
The exception is "XYZ disappoints .... misses expectations".
Do you or have you ever owned any other equities?
There is nothing normal about SKS, nothing.
A few things,
1. Wave is 15% through the measurement window, a fair bit of Fenster left.
2. WAVX is oversold if they end up selling a fair bit of stuff, and overbought if they don't - technofunkomentally(tm) speaking.
3. Their (Wave's) statements absolutely reek of "plan" (a refreshing reek), so the next few months will be interesting no matter what.
FWIW, in my experience for those who have actually served in a career capacity, assignment of false rank like "General" in the cartoonish fashion frequented recently borders on pejorative.
blue, that me be true,
but at least he did basically invent iTunes ...
on quick sales,
Solms and the CFO did argue "+19%" non-Dell new sales in Q1 (the only reported Q) although personally when kicking the numbers around it became an exercise in picking denominators.
Q2 has at least the opportunity to show more in the non-Dell new sales column, but it mostly appears they have been gearing hard to 2nd half 2014 and VSC.
There is still SEDs, and there is still the more legacy Safend DLP (although it was stated that there may be a resource allocation shift away from SFND).
As far as blue's patience, there is definitely an inherent contradiction in requiring the selling of something one is describing as unsalable.
there seems to be a fair bit of agreement going on with different viewpoints and emphasis.
cm wrapped up a dual-function portrait, admitting abject failure in the function relevant to shareholders, which it seems I and you are more-or-less doing as well.
his 'thought leader' stuff may be real or not, I don't really care. he might knit a mean sweater. again, not particularly interested.
I'm more inclined to think that SKS served as the town crier with apparently unlimited time and resources, and that there are pleeennttyyy of thought leaders in the field (that manage their time and resources in keeping with reality).
This 'industry needs' notion is perfectly sensible,
all organizations small and large often need an evangelist, somebody who keeps espousing a certain point. through that value they are tolerated. while some of these 'leaders' are fundamentally arrogant, manipulative and dishonest to the point one would never actually do business with them, they still represent value to the organism as a whole.
I don't have any idea if that notion represents a broad opinion of SKS, but I do know that is the impression I have gotten for a very long time from any public presentation he has done, and I do know I am not alone in that assessment.
I'm not particularly overwhelmed with Solms' public speaking, but he is clear, to the point, and doesn't leave me feeling like I was listening to a loose-with-the-truth narcissist.
Blue "Maybe we simply have not given the new CEO enough time, but surely Solms must realize his window is a short one and if execution does not begin soon, he will face massive desertions from the loyal longs who stayed too late and too long at the dance with SKS calling the tunes. "
There is no doubt they need to start selling things.
Solms has rather consistently point to Q3-Q4 as to when to expect results, a defined performance window if you will.
They have exhausted 13% of that window without a reported significant sale.
I'm still thinking they will spare no effort in seeking to not show up at the Q2 CC empty handed, as those numbers are going to be rough.
Not only have they pointed consistently to Q3-Q4 2014, but they also have stated that the recent PP gives them amply resources to effect a turnaround, and only a brief moment with an abacus indicates that ca. Q1 the treasury starts to wince if one extends most recent quarter trends.
Blue re:BP
well they certainly didn't give it away, an SEC 8-k being something I doubt they would falsify:
On November 30, 2011, through one of its distribution partners, Wave Systems Corp. delivered in-full against a $1.7 million order from one of the world's leading international oil and gas companies for Wave's EMBASSY(R) Remote Administration Server (ERAS), EMBASSY(R) Protector software and related maintenance services to manage laptop computers with self-encrypting drives.
The order, which involves tens of thousands of licenses and related software maintenance through the end of 2012, is a "large" class order (5,000 or more licenses) for which VSOE has not yet been achieved. As a result, Wave expects to record $1.7 million as revenue ratably through the end of 2012.
I post the text for a few reasons:
1. It states that the sale was through a distribution partner, if that partner was Dell then the revenue gets buried in the Dell 10% filing requirement,
2. It states that the revenue will be recorded ratably, the consequences of dividing up the billing over multiple quarters drops the event below 10% of revs (at the time)
3. It states that among the products sold is "Wave Protector" and it is worth noting IMO that Protector is Safend IP, the desire to completely trash the Safend acquisition seems to ignore important facts regarding the products acquired (products that Credant, a competitor, was also licensing).
Yes, they did Safend as poorly as one can, as if they went to 'how can I bungle this?' school on the matter, but the acquisition strategy is defensible. (and a reminder that the shares printed to acquire Safend represent 1.3% of outstanding, Safend represented 42% of non-Dell revs in most recent quarter, and 31% of company assets .... it certainly has outperformed the Ionosphere purchase e.g.).
As far as the number of seats that awk is stating, to me that involves some speculation. Sleuthing revealed that certain IT folks from BP added to their resumes on linkdin the notion that they had done an initial deployment of some 20-25k seats of ERAS for BP. That would be $85 a seat. It's the remaining 75k seats and the revenue for the that is more of a mystery. The entire BP affair has been masked as much as allowed. THere was an accelerated maintenance payment a couple Qs ago from an unnamed large customer, but I had long been expecting to see another 'big sale' to BP as part of a revolving replacement (25k seats in round 1, etc). If 100k seats was actually deployed, then it seems some discounting occurred, it would knock things down more to $20 a seat.
But not free. Hope this clarifies things as much as possible.
barge, only if we exclude the statements of the respective leaders. I could provide pages of SKS describing the barrier as a matter of "education" i.e. changing the customer, and if you have been paying attention the new guy's tune has been entirely different.
Its not really a zilch thing, it is more like a fact thing, well demonstrated through repeated statements, collapsed sales, and stagnant products.
Most of my comments are speculation in the extreme. This is more about RECORDED history.
broadly speaking the difference between the old regime and the new regime appears to be that
when the old regime couldn't sell something they determined there was something wrong with the customer, so they would seek to educate
and the new regime appears to look at lack of sales as something wrong with Wave or its product and seek to change Wave or its product
it is a fundamentally different world view.
We'll see how it plays out as the underlying technology is fundamentally the same. It is change the customer versus change Wave.
This is day 23 of the consistently defined (by the new regime) 180 day measurement window.
awk, I understand that to be the case,
but in the demo - when coupled with what GK was saying - I got the impression I refereed to.
I guess I'll watch it again.
awk, I understand that VSC is capability per se, it is just that it seemed from the demo that the VSC feature could be activated remotely, one-by-one, from the server (that is where I am getting lite) but that if one wanted to script it at scale then one needs to pay Wave to unlock full ERAS capacity.
On this, beyond any doubt, ICBW.
I interpreted that for say 30 machines, that VSC would ship with a semi-enabled version of ERAS that could be used to activate VSC on each of the clients in the LAN, one-by-one, but lacking the ability to script 10,000 seats with groups of different credential levels, assign perhaps temporary PINs and yada yada yada.
remarkable is that, at least from my limited perspective, VSC is really nothing new in Wave's portfolio, and while perhaps "single-step" it is really a very important central step. VSC is not just a doo-dad, it represents the central feature of Wave's offerings for some time and at scale begs for ERAS deployment.
Then one gets the console thingy, as shown in the launch demo, and modules like SED management are just dropped in.
It has the potential to be a very successful strategy, one where "upgrades" are largely seamless and intuitively sensible.
VSC looks like ERAS-lite, with full capability afforded by simple buying the upgrade key and not installing anything new, at least it looks that way to me.
In a sense VSC is the long sought after "killer app" to get Wave-TC going.
awk, agreed. In any event, I am inclined to think the DMI as a distribution partner brings more to the table than just the ability to handle scale overflow so to speak (but that too I have no real knowledge on).
I'm thinking that DMI might not only help Wave keep up with volume, but produce additional volume that otherwise might not happen at all (and was looking at post-BP as a volume collapse example, hopefully to be avoided).
A lot has changed between then and now.
The tone of comments seems to focus only around DMI serving as a overflow agent, and I'm inclined to think that under-represents their value.
and awk, the points you made are entirely consistent with my speculation,
... that the BP deployment was laden with "discoveries", "a beast", and "needs to be tamed" to the extent that it deterred subsequent sales.
And that, to me, from a business perspective, is bungling not juggling.
That some BP tech individuals switched to Wave 'cause the stuff looks cool does little to address the fact that no other companies chose to follow the BP corporate decision. That requires an explanation, I offered one.
*The preponderance of this is outside of the main point of my post, the main point is that DMI (IMO) offers more than just professional services for meeting projects at scale.
But on BP, I don't recall that BP success opening any floodgates of orders. A lack of orders is what happened, that is the BP deal was the deal to END all deals, which to me requires explaining, and none of the points you made address how it went from GM to BASF to BP to zero.
They 'don't get it' fails as an explanation for what was being successful becoming entirely unsuccessful. The collapse of success was a real thing, not a "sounding smart" thing or a "blaming" thing, it was a real measurable thing lacking explanation (short of a flood and a 'get it' notion). Given that there had been significant succses in three different verticals, and then there was no subsequent success, the logical place to look for blame is at Wave, not the customer.
And FWIW my language did include "perhaps" and "wouldn't be surprised", so I am ethically satisfied with the speculative nature of my content.
While I am confident you have much more background and information than I, we are also both aware of the fact that you have at times been fed patently false information. See e.g. the "fact" that the ATM was not in use at a specific time where the subsequent SEC filing declared unambiguously that it in fact was. Claims of firm simple facts, when clearly wrong, temper the reliability of sources (to me).
Overlooked re:DMI
(or at least I suspect) is that not only can they assist with deployment at scale, but they likely lend credibility, and service other aspects of customers IT infrastructure. Customers would be dealing with the same vendor they already deal with, a vendor they trust.
Something tells me that the BP deal was not only frustrating for shareholders as far as pace, but perhaps frustrating to BP. I wouldn't be surprised if there was a gulf between ease of deployment communicated to BP by the previous regime and the truth of actual deployment ease. That leaks out, and it contributes to torpedoing the Thai flood deals. That's called bungling things (to be contrasted with juggling).
Credibility, I believe DMI will contribute to not just scalability, but credibility, helping to secure deals where otherwise the customer may not pull the trigger.