Software Encryption Companies
A link to an article was posted which stated that the software encryption companies now get it. They are working with Seagate, they are working with Intel to support vPro. I expected this to bring forth some concern, or at least some interest, about how Wave will face this competition. Only orda seemed to read the article accurately. Other responses were, for example:
“When WAVX starts seeing serious competition 5 years from now, I will probably be out of WAVX. Hopefully I will have sold at or near the top. At least that's the plan.”
“This board has speculated the demise of the software FDE companies. To my knowledge this is the first admission of it directly from one of those companies leaders.”
Internet, I wasn’t trying to insult anyone by characterizing such statements as “putting your head in the sand.” I think it’s a reasonable, even restrained, description. I mean no offense to the posters personally.
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I tried to make some simple, important points that I hoped would stimulate some discussion.
One, it appears to me that the software encryption companies are in an extremely strong position because suddenly everybody wants encryption. And not just for their new laptops, which is all that Wave/Seagate can provide. Every company, every government agency, every state that wants encryption for its legacy machines needs the software encryption companies now. The article calls it “their boom.” Doma, if that’s not a strong position, I don’t know what is.
Two, the article indicates that the software encryption companies now realize where they need to go for the future, which is to support hardware encryption and, most likely, the TPM (Intel’s vPro is leading them right to the TPM). I don’t know what took them so long to catch on, but they’ve caught on now. And through SafeBoot, even McAfee is now in the mix.
Are none of you alarmed, or concerned, or even interested that these competitors have finally awakened?
If you put points one and two together, you have a situation where thousands of customers and millions of seats (and more every day) are in the hands of these companies that will soon be able to offer what Wave offers and more. Intel and Seagate are not saying, “Wave helped us to develop our products, so we will not help their competitors.” Intel and Seagate are working with every company that wants to support their products. Naturally.
So, internet, what’s the point of listing all the nickel and dime (Steven’s words) arrangements that Wave has with these companies? They’re happily supporting Wave’s competitors in spite of these close relationships. What difference does it make that Wave turned the DOD on to the TPM? When the government finds that their software encryption vendors will encrypt all their old machines, support Seagate on their new machines, and support the TPM, why would they switch to Wave? If there’s an answer, that’s what I’m trying to find out. How will Wave compete with that?
And that’s why I spoke about the time element. That’s why I wonder how long it may take these competitors to get up to speed on hardware encryption and the TPM. Does Wave have time to establish a position? If the Seagate drive is immensely popular and hundreds of thousands or millions are sold fairly quickly, that would do it. So far, we don't see evidence of that. Hopefully Q4 will show some evidence of that.
Awk, you say, how can these companies compete with Wave? They compete by keeping the customers they already have, by offering them new services like support for hardware encryption, support for the TPM. How does Wave take these customers away? If you know the answer, I’d like to hear it. That’s what I’m trying to find out. The only competitive advantage that Wave has that I am aware of is that they support all the TPM’s currently on the market. Maybe that’s enough. I don’t know.
Doma, I don’t understand the point you’re making by saying that “Dell bundles/offers Wave’s software for TPM & FDE key management….they offer Utimaco’s software for encryption.” What will Dell do when Utimaco also offers support for TPM and FDE key management? Even Steven recognizes that Wave’s position with Dell is essentially one of “what have you done for me lately?”
Internet, it is good that Dell highlights Wave in its ads. That does give Wave credibility with customers. Good. That’s a positive. Wave needs credibility. But how can you compare the 20 million bundled ETSL units with millions of seats at customers who chose a company’s product, are paying an annual license fee, and know the software is there?
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I’m not trying to rain on anybody’s parade. I’m not trying to get people mad at me. I’m trying to bring up points that I think are important to our investment, and I’m trying to get information on these important topics.
Have a nice weekend.
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