title, there is some data on this, it is just rather dated.
The original deal was for $3.5m of which $2.8m was stated to be licenses, the rest for some maintenance.
Were one to assign a round number like $50 per seat then the initial deployment may have been for some 50-60k seats.
In the subsequent 2+ years the remainder of the seats were presumably filled. If that was 40k seats at the ballpark $50 per seat and performed quarterly, then that could be some $250k/Q. Obviously, the price is just a guess and so on, but in any event this PR is simply trying to remind folks that Wave has large accounts that are part of ongoing business, not new business, just ongoing/recurring business.
Maintenance seats for Wave seems to be in the area of 20% of the initial seat license. Regarding large customers that looks to be about 250k seats at around $10 a seat maintenance or $2.5m annual in installed base maintenance from large customers.
The game has always been to get a larger installed base so that at some point maintenance closes in on expenses, e.g. a few million seats to cover a bare bones operation. Bundling was the other component of this, in the good old days Dell being about $20m/year in bundling. As that appears to be closer to $10-15 per year, maintenance from the few larger order is falling short of even just replacing Dell erosion. Samsung, it is said, may replace some Dell erosion next year, but all of this adds up to a no growth or neg growth situation in the face of negative cash-flow.
While a BigNewContract here or there would alleviate near term cash issues, the installed base is still well short of what would be required to stabilize cash-flow against core expenses of some $40m+ a year.
Dell 10-15m
Samsung 2-4m
Large maintenance 2-3m
2014 looks like a base (assuming Dell does not completely vanish) of some 20-25m in revs with SMBs contributing something (presumably, looking at past financials) of $5-10m.
Hence, as stated by Wave, they need about $6m (of which they have placed $3m) to keep the light on for the remainder of 2013, and in the absence of developments will require the same again in 2014.
This is all rather plain to see in a foggy Wave sort of way, and any fool governing institutional money (as is hope for in some places) is not going to touch this until this more or less empirical reality is significantly improved.
This, more or less, is what is. Hence the company is not worth a whole heck of a lot, trading at about 1x sales. Were sales improving then more generous PS ratios would likely follow. Such is not the case. Sales are falling.
The above content is my opinion.
