Replies to post #138238 on Wave Systems Corp. (fka WAVXQ)

[RootOfTrust]

goin fishn, thanks for the summary. e/

[wavxmaster]

goin fishin

Thanks, I also thought SKS mentioned being re-elected to one of the 3 positions on the Board of Directors. Perhaps it's not money in the bank, but it assures Wave of staying politically connected within the TCG, and also enables it to help direct future solutions towards Waves' vision and IP!

It does seem as though upgrades aren't happening as quickly as we'd like, but just because Papa Ginos is the only enterprise mentioned, doesn't indicate they're the only adopters. I'm sure the large NY bank referenced in an earlier CC would not like their security revealed to the world, as would most others! I know there are plenty of others, but it seems as though perhaps Papa Ginos made an agreement to recieve discounts in return for being the poster child for TC with Dell/Wave. One reason may be that if an enterprise such as a retail restaurant can find a significant ROI and increased security and functionality with TPMs, than a security conscious enterprise should be a slam-dunk! JMHO

The DOD or a few high visibility enterprises would certainly help. NTT Data should be making better progress now that they have had more time to test and demonstrate TPMs w/Waves ETS to their many clients. Japan's Govt has made it clear that they are in the TC camp and are recommending TCG solutions. We also have ICT pushing Wave/TPMs in Germany and Austria. Even if progress is slow, with many different resellers, Wave will continue to increase revenues, and TC will eventually touch everyone!

Along with Dell, Gateway, Intel and others, the industry is getting educated. If TCG at RSA went from 150 attendees last year to 500+ attendees this year, what size arena will be needed next year?

Wavxmaster

[Robert I]

"The Sprague Formula"

If your SRA notes are correct and Wave only has a few thousand seats sold so far, it's likely Steven will again fall short on a forecast.

In the last cc, he spoke of thousands of upgrades in q4, tens of thousands in q1 07. I remember chiding Wavsmaster for predicting 5000-10,000 q4 upgrades, reminding him that if Steven says thousands, you can bet it's closer to 2000-4000. But this is even below those levels, since we're just a month away from the end of q1 and it's unlikely we will move from a few thousand to tens of thousands in that time frame.

I call it the Sprague Formula. Here's how it works. Whenever Steven offers a forecast involving a time frame, whether it has to do with revenues, the closing of a partnership deal, etc., always take the latest time frame he expects it to occur, and add on from there. The hard part is knowing whether to add a month or two or several quarters.

For instance, when Steven called for break even between 4th q 06 and 2nd q 07,the bets were on. Weby said it would be q1, others said q2. Using the Sprague Formula, q2 07 becomes the starting point, not the latest possible date, and then it's just a question of whether break even will occur in q3 or q4 07.

I'm not suggesting that Steven is deliberately misleading us with his timelines. I'm convinced he truly believes them, but that he lets his enthusiasm get in the way of the reality of doing business, particularly when a new paradigm is involved. The problem is that as more and more sophisticated analysts, who are used to CEO's hedging their bets and building a cushion, begin following Wave, they may not understand or take it in stride.

The bottom line is that if you believe in the technology, the tremendous market potential and Wave's ability to keep moving forward and eventually deliver big, which I do, then we have no choice but to accept the Sprague Formula. It's simply the cost of doing business.