Replies to post #156966 on Wave Systems Corp. (fka WAVXQ)

[internet]

Chance To See

I understand what you are saying. I guess the difference between your concern and what I and others have posted stems from the belief that creating products that compete directly with Wave is not going to be as easy as some here would have us believe. Wave has spent years working on its solutions...not only to ensure that they work...but that they are also interoperable. People have for years been saying that MSFT would incorporate Waves functionalities into their own products and therefore usurp Wave. MSFT has known for years what the TCG was attempting to create....yet the playing field still looks rather bare.

SOME PEOPLE SEEM TO DISCOUNT THE RELATIONSHIP THAT WAVE HAS FORGED WITH BOTH DELL AND SEAGATE.

I assume that you have either recently bought a new pc or know someone who has in the past 12-18 months. They ususally come loaded with software from various vendors who offer the conumer a limited free trial period. The difference between Wave and these other software vendors (Symantec/Macafee....etc) is that the other software vendors PAY oems such as DELL to include their software products in their pcs. When it comes to Wave....DELL ACTUALLY PAYS WAVE TO INCLUDE THEIR SOFTWARE.

Seagate works with Secude in addition to Wave. HOWEVER, ONLY WAVE RECEIVES A BUNDLING FEE...why is that???

I agree that the window between complete sector DOMINANCE and simply being successful is 12-18 months. If the Segate FDEs take off over the next 6 months....Wave will have set itself on the course of DOMINANCE. I think that the marketing campaign we are now watching shows the determination of BOTH Dell and Seagate to make this FDE product a big success. I think that we will see this reflected in Q1 numbers and really show up in Q2. I seriously doubt we will see SIGNIFICANT sales of FDEs during Q4/07...imho

Sincerely,

Jas

[vickers2]

Chance to see, well stated, well reasoned post. Thank you

[goin fishn]

Chance to See

First, good post. It is a valid worry, and one that we as members of a DD community should be watching.

With that said, I would like to comment on your questions-

From your post:

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?

My comments:

The nickel and dime arrangements that Wave has with companies exist because no one else but Wave can make their TPM based applications TPM agnostic. Only Wave can create software that communicates with all TPMs and allows all TPMs to be utilized by the many applications that will use them in the near future. The government will have to use Wave for Seagate if they want to utilize TPM based encryption and attestation. Other companies may support TPMs, but Wave makes them interoperable. If the government uses TPM encrypting Seagate drives, Wave wil be their defacto choice because Wave's TDM is bundled on every FDE TPM drive. The question should be, with Wave already handling TPM encryption for Seagate, how will an existing software company unseat them?

From your post:

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?

My comments:

Wave's position is already established, but one of the tougher questions for those who follow this board is defining just what are the parameters of Wave's position. I think of it as this: Wave is the only software provider who can make applications TPM agnostic. Thus, any software provider who wishes to develop TPM applications that will be sold to owners of many machines which utilize several different types of TPMs must license Wave's IP. So far, all TPM based applications that are intended for horizontal deployment have licensed Wave's software, or asked Wave to develop an application to streamline use of the TPM. (like TDM for Seagate.) When I hear of another company that is developing a TPM agnostic application and is not licensing Waves software, then I'll be worried. Until then, it is just unsubstantiated worry.

From your post:

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.

My comments:

This is perhaps the most difficult challenge that Wave faces. Pre-existing relationships will likely delay some companies deployment of TPM based encryption and attestation solutions. However, the fact remains that software encryption is slower and can still be hacked. This will be the cause of its demise. While software encryption companies can tell their clients that TPM based encryption is not that much better, all it will take is for the right executives to see the speed and ease of use the TPM provides, and they will check out TPM based offerings. Will this process take long enough that the current software encryption companies can develop their own TPM agnostic applications in the meantime? That's hard to say, except that it hasn't happened yet, and we are not hearing of companies developing such products. You assert: They compete by keeping the customers they already have, by offering them new services like support for hardware encryption, support for the TPM. You say this as if it is simple to develop a competetive product when in fact, it took Wave years of employing the best encryption specialists in the country to achieve what they have today. It is not reasonable to expect that another company will easily do the same as Wave in a manner that doesn't violate Wave's patents, and faster by far than Wave developed its offerings.


In any event, until we see or hear of other companies developing TPM applications independently of Wave, it is again just unsubstantiated worry.

From your post

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.

My comments:

You are right to say that these are important topics. You seem worried by them. I am not. I think that the DD here (and on the various basher boards) will warn us plenty early enough about any serious competition for Wave. You also seem worried that we "lack" information about these topics. I don't think we lack information, what we lack is news of any direct competition for Wave-and that certainly does not rain on my parade.

My prediction: You will see these possible "competitors" end up having to license Wave to develop their products.

[Chance To See]

Note of thanks for the detailed replies to my post.

Lots of stuff to mull over and sort out. It’s going to take a while for me to clarify my thoughts here and see what questions may remain. I didn’t want more time to pass without acknowledging the replies.

Thanks again.