WhiteEagle2007....your FDE sales analysis...Sucks!
Take off your Wave bashing glasses,be open minded
& realise that the ERAS 40 dollar per seat server
software for central IT management of the drives is
missing from your numbers.....please try harder next
time!
FDE Drive Sales Analysis
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Being open-minded, I decided to analyze the numbers required for a breakeven quarter from just FDE sales, since Wavoids say this product will produce a watershed of revenues. In fact, some Wavoids are tossing-out numbers like $40 million for a year once FDE begins and saying that's a conservative number. Whatever the math and revenue streams are involved to produce that estimate, I just wanted to determine a simple estimate and evaluate its possibility in reality, something the Wavoids are reluctant to immerse themselves in because of all the kool-aid they consume.
Consequently, I picked-up a number from I-Hub that seems to be the accepted figure amongst Wavoids themselves as being the dollars earned from a single sale of an FDE drive, and that's $7.00.
Next, let's just throw in a round multiplier to make things simple and start a market analysis from there. One million is best since it will result in $7 million in revenue, thereby achieving BE for Wave for a particular quarter. Hopefully, expenses don't rise above $7 million going forward which is another possibility.
There you have it, Wave needs to sell a million of these things per quarter. That's not including any of the 50 cent to a dollar-fifty royalties/reveues they receive from bundling with Intel, or Dell, or whomever else. Let's just call those revenues streams insignificant for the time being. Everything is centered on FDE in this analysis and with Wavoids' prayers as a matter of fact.
Well, let's just look at these bundling numbers to get a perspective on what the sales of FDE drives might be. I believe I'm being generous if I were to say they derived a million dollars from the aggregate sales of Embassy through all their bundling channels. Using an average royalty amount of $1.00, we arrive at one million units shipped. Hey, great! That's the same number we're looking for in FDE drives. Now, keep in mind that each unit shipped is bundled whether or not there is an actual consumer demand for it. That means that number is extremely exagerated and real demand is far less. With FDE, the consumer has to order each unit. So, how much demand is there out there for FDE drives. Wavoids would have you believe that every single IT guy in the world wants 10, 20, or maybe a 100, depending on the size of their company. How many of these IT guys have bought a TPM infrastrature with all the key management and laptop management. One, namely Papa Gino's. There has not been a single other press release stating that Wave has sold one other enterprise system. They say they're bound by NDAs. Really? Is there any other companies asking Wave to protect their network? Looking at revenues, you have to conclude no. OK then, to whom are all of these FDE drives going to sell, the IT guys that didn't want Embassy?
Say that 100 of these guys decide FDE is for them, probably because it has the Seagate name on it and they order 100 drives each. That amounts to 10,000 drives sold times $7 each and your result is $70,000 for that quarter.
Is my analysis really reflecting the market demand reality for network security of this type? My gut feeling says yes. I would love to hear whether I'm on track or not with my numbers. Please feel free to comment.
Thanks,
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