Wave Systems Corp. (fka WAVXQ)

[RootOfTrust]

Once SED management is initiated in an enterprise, I anticipate an adoption of the management of the existing TPM infrastructure.

The account's already deployed base of unrefreshed PCs with TPMs. Good point.

Assuming a 3 yr. or 12 q replacement cycle, and further assuming the average account has procured two q's worth of new laptops w/ SEDs/ERAS (since standardizing on the solution), two q's would represent refreshing 16.6% of the total installed base, call it 20%, leaving 80% of the existing installed base unrefreshed (potential TPM turn-ons).

Consider an account with 4800 laptops. This would certainly be an above average sized account, not Wave's current largest (we know Seagate is larger), but above average. 4800 laptops require replacing 400 every q (12 q replacement cycle), on the average (in reality procurements will vary in size and frequency). Assuming this account standardized on the solution 6 months ago, we'll allow 800 in new orders to date, leaving an unrefreshed installed base of 4000, plus desktops (this illustration assumes SEDs are not being procured on the account's desktops, although some accounts may).

So yes, the account's unrefreshed installed base of TPM-equipped machines represents a significant upgrade-to-ERAS opportunity.