Dinner with Steven Sprague.
Not sure where Snackman found the stamina to post his remarks a few hours after returning home to LA at about 5 AM, having just driven about 800 roundtrip miles (LA to San Francisco to LA). Snackman dropped me off at home. I staggered inside, and slept for the next 12 hours. I just read Snackman's summary. He does a great job summarizing much of what was discussed that night. I'll just add a few additional observations and comments of what impressed and stuck with me.
It should come to no surprise that Snackman, the brilliant tactician that he is, spmehow managed to get our group of 12, including S. Sprague, into a private room, at a busy, noisy and very popular 5 star Italian restaurant in the city of San Francisco. Racing from LA, Snackman and I arrived at the restaurant about 45 minutes early. We were under the impression that XAM had made a reservation for a private room, but to our disappointment we were told by the no-nonsense maitre-Dee that no private room were available. The wealthy Snackman slipped him a nice thick pad of greenbacks, and, a few moments later, our now charming and engaging maitre-Dee informed us that good fortune had fortuitiously come our way: Yes, indeed, a private room with a single table for 12 had suddenly become available. The adjacent private room we soon learned had been reserved for San Francisco mayor, Willie Brown and some of his cronies.
Let me first state, that Snackman and XAM were really quite fearless in the questions they asked of S. Sprague. XAM was always asking, "Steven, can we please, back up again on a few earlier comments you made." Snackman, reminded me of attorney, Barry Scheck (of OJ Simpson fame), in his aggressive questioning: "Steven, let me repeat for the third time, do you, or do you not, recall having told us....see page 6, paragraph four, line 3, from the UncleverName transcript......that the deployment numbers for the 4th quarter would be......"
A few comments about S. Sprague. Love him or hate him, one thing for all would agree on: He's a veritable Force of Nature. He tackles questions and topics head-on with unabashed glee, enthusiasm and passion. There is nothing bureaucratic, stilted, or deliberative about his style. He is not the type of player would ever consider sliding under the catcher blocking the plate; he going to run full speed right over that catcher. Crash! Splash! He has an aura of indomitability. Give him enough room to gather steam and he will walk through brick walls; or usher in new revolutionary computing paradigm shifts that will change the World. Simply put, I was impressed with the force of his personality and character.
I wanted to get some feedback on the one issue that has really been driving me nutty over the years, namely, Why does the investment community continue to be so oblivious about the awesome progress and dazzling potential of WAVE. Why is it that WAVE finds it so difficult to gain any positive presence in the consciousness of the investment community? Why does WAVE remain so damn invisible? Why did they name this company, WAVE SYSTEMS? Certainly, the name STEALTH SYSTEMS would have been a much better fit.
And so, I asked him (and I paraphrase):
Why doesn't someone from WAVE just grab some reporter from the Wall Street Journal, sit down with that reporter, and tell the WAVE story. Tell the reporter: We have breakthrough, Holy Grail technology! Real Attestation! Real Interoperability! Real Security. A real business model for Web Services. A real trust infrastructure. TCPA and then TCG came into being and were sustained primarily on the shoulders of WAVE’s intellectual property. And if you doubt me, ask yourself WHY has WAVE been designated the subcommittee chair of the TCG Infrastructure committee. How could a Wall Street Journal reporter turn his back on a story like that?
He responded (and I paraphrase):
WAVE has to be careful with the OEMs they are dealing with. The gorillas are “terrified”, “scared to death”, “paranoid” about the free content/privacy movement and their power to potentially delay or kill the trusted computing movement dead in its tracks. The Intel Pentium III fiasco still reverberates loudly in their ears. Therefore trusted computing remains intentionally low profile especially with respect to deployment schedules. But make no mistake about it: The OEMs want to deploy millions of trusted PCs into the marketplace. BUT: They want to do so QUIETLY; with little or no fanfare. Therefore you trumpet out the deployment after the fact, and not before the fact. Once the trusted PCs are in the marketplace in significant enough numbers, there is not much that the no-content/privacy folks can do to hold back the Trusted Computing push. And let me tell you, you're going to see significant deployment not only on the enterprise side, but on the consumer side. Keep your eye on “working groups”, who will immediately see the advantages of trusted computing in being able to control the security and privacy of their communications between group members. And they'll start ordering trusted PCs left and right. You're going to have the grandmothers of the World who will want to retrieve over the Internet, photos of her young grandchild romping about in the buck naked, while at the same time, wanting to be absolutely assured those same photos are not exposed to anyone else without the explicit authorization of the parents. Basic and simple trusted services as the above will catch fire on the consumer side. And the OEMs know it, but will never talk about it publicly. Trusted computing will catch on with both the consumer and enterprise side consumer side. You watch.
The discussion continued. He reemphasized that, yes, the OEMs are scared to death about the power and influence of the free-content movement. Nevertheless, the OEMs are very committed and determined to push through in a very major way, trusted computing NOW. But the OEMs would be idiots to trumpet this out before the fact. And the OEMs probably would not be too pleased with WAVE if it chose to headline its pivotal role in the Trusted Computing movement.
Sooner than later the Investment World will learn that WAVE is the ONLY PLAYER out there providing the core technology of trusted infrastructure and the component services that will make Trust computing a reality. Trusted computing won't happen without us.
And so I asked:
So if what you say is true, and I believe it is true, where is the RISK FACTOR in this investment? I mean, the buzz is trusted computing. The OEMs have committed themselves that this will be the year they begin deployment of trusted PCs, with basic trusted services attached. And if WAVE is the only player around that can presently make that happen, I really fail to see where the risk element in this investment.
Now I want to be careful in how he replied to my “risk” question. I'm quite certain that I heard him mutter that there really was "very limited risk". His response was a spontaneous reply, and not a deliberative one. That is, I'm quite sure if someone had attempted to press S. Sprague by what he really meant by "very limited risk" he would have quickly backed off, and offered the more cautionary boilerplate statement regarding investment risks, but that he was confident that WAVE would surmount them. In my mind though I really believe that S. Sprague genuinely believes that the risk factor is presently minimal. That the WAVE Train called the EMBASSY SPECIAL has already left the station, has been gathering up speed, and will soon be one of the first players to arrive at a new untamed, expanisive territory in cyber space called Trusted Web Services.
Of course, accepting the "very limited risk" viewpoint, is difficult, both emotionally and intellectually, when WAVE continues to flounder within the 80 cents range, with anemic volume, and cash running out in a couple months. Though I would argue that if you believe the below propositions are fundamentally true, then you'd be foolish to Sell, and very wise to Buy.
Proposition 1. WAVE has no peer in the Trusted Computing marketplace. WAVE is at least 12 months ahead of any potential competition.
Proposition 2. WAVE has presently available the ONLY TOOLS which can enable Trusted Computing on a large scale with a business model seamlessly integrated with it.
Proposition 3. Trusted Computing will begin this year. Real plans are in place by the major OEMs to push aggressively trusted computing with revenue producing trusted services.
Proposition 4. Funding related issues do not pose a significant threat to WAVE's survival. The best case scenario is funding through deployment or sell of assets or strategic partner funding. Worse case scenario, additional dilution of shares.
Some tidbits:
1. Microsoft informed WAVE in March 2002, that Palladium would be announced in June.
2. WAVE has met face to face with Carly. (Actually I was hoping he was going to bring Carly to dinner.)
3. Steven Sprague has a tendency to refer to much of the competition as "stupid," "schmucks" and "schlemiels". In other words, he's my kind of guy!!!!!! lol!
4. The darn meal cost 90 bucks. Or about 10 shares of WAVE. If you see a 10 share trade tomorrow, that'll be me!
AI
