Wave Systems Corp. (fka WAVXQ)

[Chance To See]

tkc, re Steven’s TCG statement.

“ AA, SKS replied " All of TCG is focused on driving usage of our 40 million copies of sw." "Our" meaning Wave's software? So, in your opinion, is he saying that "all 140 TCP member companies" are buying Wave's sw? even though it's tough out there. How did you interpret his reply?”



tkc, I agree that the statement is remarkable enough to require some attention and explanation. To some degree it’s probably an example of Steven’s hyperbolic tendencies, and it’s very helpful to review what he said in the Q2CC on the subject even though his statements there are not always clear or consistent.

FWIW, to me it sounds like he is saying this in the CC:
A few months prior to the CC [8] some of the leading people within the TCG started to try in earnest to get their own companies to turn on their TPMs and publicly support their use.[2,5,8] They also encouraged other TCG participants to do the same.[5] He says some deployments are actually underway.[2] At some point the internal deployments will be publicized [2] and other plans to promote Trusted Computing and TPMs will be developed.[5,6,8] But it is not clear how far this has progressed within the companies or how long it will take to see results. He hopes within six months.[8] Wave is still the point company in public [3,4] although he talks in one section about marketing efforts as if they are already underway.[1]

As for the crucial question about Wave’s software, in the CC he doesn’t specifically mention TCG members deploying Wave’s software. He does say, more generally, that “There's energy and dollars being put behind it to push it. And we're a beneficiary of that, and we're helping to guide that.”[5] and “Wave is in the position to benefit from that.”[9]

I, for one, am still not clear about how much TPM implementation can be undertaken without using Wave’s software at all. Maybe someone can address that.



In the CC he mentioned the TCG in four separate sections. I’ve tried to keep the comments in context. The bolded parts directly mention the TCG’s efforts.

ABOUT MINUTE 40

Halpern: And with regard to Seagate drives, do you have a number on how many drives were put with the Dell machines this current quarter?
SKS: Yes, it's under 20,000.
Halpern: Okay.
SKS: It's been nowhere near what we all collectively expected. I think we will see a significant tick associated with the marketing that goes along with the new machines.
Halpern: Right.
SKS: So, just the nature of the beast, if you go see a Dell presentation on their new platforms, security is part of that presentation… [Here he talks about Dell’s Series E campaign, implies that the smallest version will now take the 2.5” drive, talks about a new customer and Seagate’s new drives.] …And so both of those I think will help us in the volumes of conversion.

[1] Plus there's a fairly strong marketing effort by everyone associated with this, from the Trusted Computing Group, to Dell and Intel and others, to the drive manufacturers, and awareness has been created within the marketing of the industry and I think all of that is helping.

[I don’t know what he’s talking about here. Subsequent statements indicate that the TCG has not yet implemented its marketing plans, and Intel certainly is not out there promoting the use of FDE drives when they themselves are about to introduce a competing technology. Maybe he is referring to encryption in general. ]

NEXT, ABOUT MINUTE 57:30

Meyer: Why aren't more members of the TCG implementing Trusted Computing? I don't get why they're, maybe they are, and they just don't announce it, but are they showing serious signs of accepting their own medicine and switching to Trusted Computing?

[2] SKS: So there definitely are some deployments that are underway now. They haven't publicized them yet. I know there's some work on the path to go begin to publicize them. We push that point all the time.

THEN ABOUT MINUTE 1:02:30

Paulson: Okay. What has, what's, you know a few years ago now and I hate to go back this far, but you guys, Wave I should say, was forecasting 2 or 3% turn on rate for TPMs and forecasting breakeven based on that by simply being in the box of PC OEMs, and today you said you're just a fractional percentage of that, but you're out there seeing these companies and they're still not turning them on in volumes. Is it the product, is it still long decision making cycles, what is it, because you're still no where near 2 to 3% turn on rate for TPMs for Wave's products, as it relates to Wave. So what did you over forecast, and what is the market under delivering on, as far as you are concerned, as far as turning them on, what are the major hurdles?

[3] SKS: I think we touched on the broader topic. So who's told you to turn your TPM on, other than Wave? I mean, I'll give you a perfect example, I went to see a major group within the Defense Department the other day. Met with the CTO, and the CIO, and the head security guy, and we had a great conversation about this. And they were totally unaware that we basically forklift upgraded all their machines already. So think of it this way. We patched all the hardware, but nobody told you that we did it. And so now everybody is still running around. There was an article in the New York Times over this weekend basically saying passwords are dead. Great. Why don't you articulate the solution that's in 200 million machines?

[4] Now, I can do my piece, which is send that writer a little note saying, "By the way, did you know..." But my voice, when they hear it from Wave, they look at this and say, "Why is this little company out here telling us this, and we haven't heard this from the major players?"

[5] And so there is a major effort underway, led by the Trusted Computing Group and all the members within it, led by the leading partners. I think you will see a concerted effort to really support the use of TPM. It's out there in enough scale. They're focused on it. There's energy and dollars being put behind it to push it. And we're a beneficiary of that, and we're helping to guide that.

THEN ABOUT MINUTE 1:07:30

Paulson: What kind of things, you mentioned that the TCG could do some things to get Enterprises to turn them on, what kinds of things could you imagine them doing, besides shipping the equipment that has it? Can you give us a "for instance" that they could do this, they could do that, to help Enterprises turn TPMs on?

[6] SKS: Sure, I'll pick on one. Have Juniper stand up and say, "Your network is more secure if you use Juniper equipment in combination with a TPM."
Paulson: Okay.
SKS: Not only say it, but live it. Which means that their field application engineers are out there telling their customers when they buy a Juniper switch that the Juniper switch is not as secure unless you turn on the TPM. If you turn on the TPM, you have now implemented the best available security in the market, and your network is not at risk. And you won't be pasted up on the wall of sheep at Defcon.

Paulson: So why haven't they done that to date?
SKS: Uh…
Paulson: As an example, I'm not saying Juniper, but why hasn't any TCG company said, "Hey...'

[7] SKS: Because the guys who go to TCG are part of participating in standards conversations, they're not the marketing folks within the Enterprise. So the task has to be for those people who participate in the standards to go back to their corporations and say, "We've done the standards work. We've shipped the hardware. Now we need to reap the benefits from it."

[8] And so those efforts have now been underway for three or four months to help carry that message back into those Enterprises, up into the organizations and begin to press it out, and hopefully we'll begin to see some of the results of that over the course of the next six months.

[9] And, Wave is in the position to benefit from that. I think we've done everything we can to put us in a premier position to be the leading company to benefit from when hardware security turn-on takes place.