Wave Systems Corp. (fka WAVXQ)

[Paul Czar]

Microsoft's failure to develop (in the near-term) a hardware & software based Trusted Computing system is great news for Wave. Just a few month's ago, the worry was that MSFT was gonna eat Wave's cake. Now, we have MSFT announcing that it won't be around for years. Well, one thing for sure is we have MSFT to thank for many things.

First, they brought Trusted Computing into the limelight. The amount of visibility MSFT has provided for TC is unmeasurable and most of it is in a good way. I say most because the only negative is that they illustrated how complicated it is and that they can't do it right now. Furthermore, their description of what NGSCB is supposed to do ( http://www.microsoft.com/technet/Security/news/ngscb.mspx ) is exactly what Wave states they can do right now, all the way to attestation and key management.

Secondly, the road show MSFT/Wave is conducting right now will only provide Wave with much more serious attention for TC deployments. The interest being generated about TC is growing everyday and even more so now with the NGSCB news released at WinHEC and the road show. We can all see that with the number of articles and attention the media is giving to this announcement. We are just days away from an epiphany amongst IT professionals. I believe they will be able to connect the only 2 dots necessary for an all-out recognition of Wave Systems and our Trusted Computing technology. Dot 1 being the description of NGSCB in the above link and Dot 2 being the description of Wave's product offerings, all the way to attestation and key management. All the dot connecting entails is a side-by-side comparison and analysis of the 2 technologies.

At this juncture, it would be indeed prudent for Wave to make an announcement that it can provide a Trusted Computing enviroment (like what NGSCB is planned to do) on a stand-alone basis, meaning that it is not embedded within Windows, but it is easily incorporated into a Windows environment. They can do this without stepping on MSFT's toes, but with their support. In fact, I believe the timing of the road show, the shelf registration and the NGSCB announcement are perfectly placed for an announcement of biblical proportions (for Wave investors at least). A buy-in by MSFT at this time is a win-win situation for both companies. MSFT needs Wave's technology and Wave needs MSFT's money. It is a business textbook example of a perfect fit between 2 businesses with similar businesses and the same business goal of developing and deploying Trusted Computing. I wouldn't doubt that SKS and Billy are on the phone right now. Remember, SKS stated that MSFT "gets it". A joint venture at this time would accelerate the implementations of Trusted Computing systems ten-fold in the short-term. Wave would reach break-even this year. I believe SKS was setting up all his ducks in a row and we are about to hear some spectacular news. Isn't it also nice that Wave is due to announce Q1 results next week.

Paul