Interview: Steven Sprague, CEO of Wave Systems Corp. (Nasdaq: WAVX)
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This is another in the series of Seeking Alpha interviews with CEOs of public companies of interest to our readers. These, however, are interviews with a twist: the executive has agreed to answer questions and respond to comments not from a single interviewer, but rather from our community of readers and contributors.
This interview is with Steven Sprague, CEO of Wave Systems Corp. (WAVX) a leader in a new approach to software and services that make your computer more secure and user-friendly, based on an industry standard called Trusted Computing. (See the latest WAVX earnings call transcript and conference presentation for more background on the company.) Wave Systems has sponsored this interview, which works like this:
- Steven briefly introduces himself and the issues he's focused on below.
- Readers and contributors can immediately start to post questions and remarks using the comment box below (Note: you need to sign up for free registration and be logged in to do so).
- Seeking Alpha editors will not filter or edit the questions and comments from readers, except to delete insulting or overly aggressive language.
- Steven has agreed to respond to the questions and remarks over the next three days, and will begin posting answers to readers' questions on Monday, March 26th. Readers can track his answers and respond to them during that period, with the resulting dialogue remaining on the site.
- Readers can respond to his responses during that time.
Greetings and thank you. I’m Steven Sprague, CEO of Wave Systems Corp.
Thanks to Seeking Alpha for providing this opportunity to chat directly with our target customers: people who have a PC and Internet access - the audience our security solutions address. Today, we are focusing on the enterprise market, but we expect the concept and technology behind Trusted Computing standards to be extended to the consumer market in the future.
In a nutshell, Wave Systems provides software solutions that support an industry standard for PC security and trust. The standard was developed by the Trusted Computing Group ("TCG"), www.trustedcomputinggroup.org, an industry standards body consisting of approximately 160 member companies, including PC industry leaders such as AMD, Hewlett-Packard, IBM, Intel, Lenovo, Microsoft, Dell, NEC, Phoenix, RSA, Samsung, SanDisk, Seagate, Sony, Toshiba, VeriSign, etc.
The TCG has developed a new approach to PC security that involves the placement of an industry standard security chip - a Trusted Platform Module ("TPM") - on a PC motherboard. The chip provides a secure location within the PC where secrets, such as encryption keys, passwords and PINs are stored securely, outside of the prying eyes of hackers or rogue viruses seeking to capture your high value information. Wave’s software works with each TPM, and enables a range of security and authentication functions. To get a flavor for what this could mean, imagine a future without user IDs and passwords and the data on your PC is always safe from theft; that’s the vision of trusted computing. Wave also produces server software that enables an enterprise to deploy, manage and optimize the use of trusted computing solutions. To date, we have established revenue-generating relationships with Dell, Intel, Seagate & Gateway, as well as with four of the leading TPM manufacturers.
The TCG standard chips have already shipped on over 50 million PCs worldwide. Industry analysts predict an accelerating shipment level for TPM-enabled PCs and expect that virtually all enterprise or consumer PCs will ship with a TPM.
We believe that Trusted Computing represents an enormous sea-change in the way business and consumers will protect their PCs, data and e-commerce interactions. Further, we think now is the time for investors to start to examine this trend and see how it might affect investments you may have in the PC, security, e-commerce, networking and related industries.
Of course, we are also eager to explain our role and competitive position in this trend and look forward to your questions.
This Q&A represents the opinion of Wave Systems management and is not intended to be a forecast of future events, a guarantee of future results nor investment advice. Except for the statements of historical fact, information presented herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to fund operations, the ability to forge partnerships required for deployment, the speed of adoption of trusted computing technologies, changes in consumer and corporate buying habits, chip development and production, the rapid pace of change in the technology industry and other factors over which Wave Systems Corp. has little or no control. Wave Systems assumes no obligation to publicly update or revise any forward-looking statements provided in this Q&A, or to correct any erroneous information presented in any investor questions herein.
Yahoo! Finance readers can leave questions and view Steve's answers by viewing the original article on Seeking Alpha.
This article has 97 comments.
Thanks so much for doing this interview.
Why has there been little media attention to Trusted Computing so far?
- John Singer
Sprague
The interest in trusted computing is growing as the installed base grows. TPMs have shipped on over than 50 million computers in 2006. This technology is still not very well understood by the "experts" and will have very broad implications for all of us.
for more foundation information on Wave check out
Steven
Sprague
WWW.WAVE.COM
steven
r
My question is, why shouldn't shareholders view WXP as a mere vehicle to provide your family and friends with paychecks and bonuses? Both your brother and father made well over $100,000 each.
In addition, Wave, the parent company, funded a lease with Michael Sprague for an additional nearly $50K/year to house WXP headquarters in his personal loft apartment in New York City.
All of this seems a bit suspicious to me, but I would love to hear an explanation, since one has never been given.
Thank you--Digital Dancer
Sprague
The purpose of Wavexpress is to have a foundation for building a services based network that leverages the TPM to eliminate user ID and Passwords for consumer media access. Combining the availability of rich media with the subscriber managment tools of trusted platforms should enable a seamless entertainment experience.
Dave has not been working with Wavexpress but has been key in building our goverment contracts and relationships.
Wavexpress had temporary housing in New York that was very usefull to us and only lasted a few months. We fully disclosed the event and it was very inexpensive transitional space.
Steven
Eli Hoffmann
Great to have you here answering questions.
Could you describe the competitive landscape in Trusted Computing software... What do you feel is your competitive position/advantage? Candidly, what is your competitive weakness?
Thanks,
Eli
Sprague
Today there are two major players in the market Wave and Infineon. In addition, Thinkpad Builds there own for Thinkpad.
Wave's primary advantage is that we bring interoperability and we bring the server managment tools. We are the only software that will run on all known TPMs at this time. Wave has recently added support for Seagate Drives with Drive Trust Technology. These Drives will encrypt and protect your data in the case of a lost laptop. The combination of TPM support and Seagate support will be a Key advantage going forward.
Our weakness is that the market revenues have not yet engaged strongly so customer conversion is hard and we have still to prove we can be a Class A Enterprise software provider.
Steven
Editors
Sprague
The strategy is to deploy Millins of copies of client software with our OEM partners Dell, Gateway, Intel, Seagate and others to introduce the TPM (Trusted Platform Module) and Wave. We then help the customer to understand the value of deploying Wave's enterprise managment solutions to realize the full potential of the TPM.
Steven
The potential scale of products and services that can be derived from Trusted Computing seems large. I have two questions regarding Wave System's current ability to derive revenue from Trusted Computing.
First, it appears you have had good success getting OEMs to provide Wave a small amount of revenue by bundling software with the Trusted Platform Modules in PCs and laptops. It seems you have had limited success convincing the purchasers of those PCs and laptops to purchase additional, higher revenue generating, software from Wave. My question is - is this a case of Wave selling software that no one wants to buy? If not, when do you expect revenues to be generated from selling non-bundled software.
Second, as I mentioned above, I see great long term potential in the ability of Trusted Computing to fundamentally change the way digital devices enable both BtoB and BtoC business to be conducted. What is the focus of Wavexpress to that end, and what do you see in the short term from this service? I actually use it today and I like my user experience, but I don't see how it is currently adding such value to the company as to offset the resource drain it must be.
Cheers
Sprague
The global need for trusted computing is enormous and wave is positioned as the market leader with strong solutions in the key areas. We are best know for our tools to manage TPMs but we also have strong investments Digital Signature where our ESIGN suite is being broadly adopted and with WavXpress where our TVTONIC brand ships as an online spotlight partner in every new copy of Vista that includes Windows Media Center (most of them do).
I am confident that we users want to get rid of USERID and Password from our daily lives in Banking, Insurance, Email, Storage, and media. If wave can help that happen and be positioned as one of the leading brands to facilitate a users aceess then we have accomplished our mission.
With Wavexpress The susbscriber managment tools, Media Tracking Tools and Security are all capable or will be capable of using a TPM.
steven
Also, since the 1st quarter is nearly completed can you provide any indication of successful upgrade activity for this quarter? If sales are closed, will customers permit Wave to disclose those sales, if only in terms of the relative scale of those sales?
Further can you describe the greatest barriers exist to the adoption of the ETS software and what are the greatest benefits a customer would relalize from adopting the ETS software?
Thanks.
Sprague
The greatest barrier has been an understanding of what a TPM can do and that the tools are ready. I have seen a strong change in the attitudes and awarness over the last 6 months and I believe this change will help us to grow the overall market and our shar of it over the next year.
steven
Many of us shareholders were frustrated and very dissappointed by that result, I am sure you were also. Something changed. We have very little concrete information we can rely on to judge the progress the company is making. I would just like some general explanation why as to why it didn't work out. It could be as simple as the person that had made a purchasing decision left for another job. Thanks again.
Do you still expect Seagate to start shipping their FDE.2 drive by the end of April?
How much money does Wave get for each digital signature? When will the Ellie Mae deal start to produce per transaction revenue for Wave?
Great news today with the deal with Ellie Mae...Carl.
Sprague
Helping Ellie Mae to reduce the cost of loan origination and improve the quality of the documents is a great opportunity for Wave.
Steven
Jackson
Could you talk about your cash flow? How has it been over the last 4 quarters, and what guidance have you given going forward?
Sprague
We receive about $50 - $100 per seat to Wave for our Enterprise Servers and Client software. We have about 400,000 seats identified the could close this year but they are not signed today. We work hard every day to add to the list and to close business with these partners. We also recently added Trusted Drive Manager with Seagate as a new partner. It is impossible to know what will close but this should be a big contributor in 2007. We are excited about the potential but it is to hard to guess the engagement. Is it possible to sign 100,000 seats worth of business in Q2 yes have we historically proven we can do it not yet. The scope of the business is strong, No other company is closing business yet either, We get up every morning and push the ball up the hill. (I think we can see the top)
steven
Jackson
Thanks for this opportunity. Two questions please:
1. What positive news or aspects of your company are not currently priced in to your stock that you think should be?
2. What catalysts do you see for your stock over the next 12 months?
Sprague
We have the core TPM business.
We have a solid video distribution partner with thousands of subscribers and distribution on all Microsoft platforms in WavXpress.
We have a very strong digital Signature team growing a market leading player.
Just launched a full disk encryption solution with seagate that will provide the strongest data protection in the market at an affordable price.
But mostly we have a strategy to combine these together to enable the industry standard solution for securing the PC and the services relationship with the user.
The first Catalyst is expected to be sales followed by the realization that TPMs have shipped on Millions of machines. The spring is winding every day that new TPMs ship. They will all have to be managed. The market potential for TPMs grows daily.
Jackson
It's the first I've really heard of WAVX and I find this intriguing.
Question for you: What do you think is the "tipping point" for trusted computing? The point at which enterprises will feel comfortable to make this a part of their security/compliance strategy?
Sprague
We might look back and say the army mandate for TPMs on every new machine.
We might look forward and say that it was wave posting a positive quater :)
We Might look forward and Say (NAME your favorite top 10 bank or top 50 corp.) adopting trusted computing.
But it will happen it always has with Industry standard High volume shipping technology (Ethernet, Color, CD-ROM. USB.......) All of these have become huge markets.
Star
1) The 1 for 3 reverse stock split in June 2006 artificially inflated WAVX's stock price to remain listed. Afterwards a share holder with 75,000 shares had only 25,000. On that day the value was the same however once significant seat upgrades occur and hopefully positive cash flow and EPS follow each $ per share increase will return more to each share holder with the pre-split number of shares. Has there been discussion of a 3 for 1 split for either share holders effected by the reverse (or all share holders) as soon as the stock price permits?
2) I have seen numerous posts regarding the Wave ETS Dell edition on Dell's support web site. How diligently does your support staff and engineers monitor it to initiate patches, discover features needed, etc? Does Dell refer all ?'s to your staff or does Dell resolve themselves?
3) I read that Intel's Classmate PC reference design includes a TPM. I believe this will be used for the One Laptop Per Child initiative. Is Wave working on bundling software with either OEMs building these or govt's of countries that will be purchasing them?
4) Regarding Symantec Antivirus Corporate Edition. When uprading recently I noticed an optional program, Sym Network Access Control. It includes system integrity checking and other features similar to the TCG NAC. Symantec is a TCG member. I did not see a TPM system requirement. Is this an attempt to diversify and capture a share of the future TCG market which will increase when MSFT releases Vista 2 (NGSCB) later this year? Are they future competition of Wave?
5) Any deals closed during the recent CEBIT?
Thank you for your time.
Sprague
Dell has first customer contact and we are then called in as experts if first tier support can't help the customer resolve the problem
We work closely with Intel on their motherboard solutions no announcements have been made on this platform. We are very pleased to see the TPM as part of this platform the uses to imporve learning and secure the platform and the children are fantastic.
We shall see but I hope that they will leverage what we have already put in place to manage the TPM. The Whole arena of TNC will be an important area to wave as that market developes it is very early.
We were pleased to demonstrate our software with Tarox a PC manufacturer in germany showing the Seagate FDE drive.
Star
6) I recall reading One Laptop per Child pcs with tpm are so secure antivirus (I think antispam, antispyware) are not needed. Wow (: this plus eliminating passwords will free significant $$ in product and maintenance labor to focus on value added resources for a company. Symantec and other current players need to diversify before TCG vision is realized.
7) 3 for 1 stock split needed so long term SH accumulating and not selling Wave since turn of the century will see there investment value increase faster with their original number of shares in hand when numerous (: end users begin upgrading to full ETS and related mgmt software.
8) Seagate FDE preventing unauthorized USB drives from accessing network or client data is an exciting alternative to inserting glue in USB ports, cutting port wires on motherboard, disabling in OS. This could be applied to DVD drives, tape drives and likely internal hard drives. I also like the flexibility Wave Trusted Drive has by working with Seagate’s drive firmware with or without a tpm in the pc.
9) HP Integrity rx6600 server has a socket on the motherboard for a plug-in TPM. It can be added and removed anytime. I assume it is this way versus soldered because a server performs numerous tasks and needs to be repurposed or purged often? I did not find Wave software related to the rx6600 server on HP’s site. Is it bundled with OEM servers? Does Dell sell servers with tpms? Does Wave’s server software require a server operating system?
10) Do you agree that the human element in a company’s IT infrastructure, the Network Administrator, likely the Wave software administrator, implementing and maintaining network user and application policies for device and data access privileges is the potential weak link in trusted computing? Although I think after carefully designed policies and implementation of trusted computing in networks the data and devices will be more secure than today.
Thank you again.
Will Seagate start to ship FDE.2 to the major OEM's bv the end of April?
How much money does Wave get per digital signature?
Sprague
That's up to the specific OEMs to announce but the general time fram of Q2 is a good reference. It will take a few months for volume to ramp but we are seeing strong interest in the drives. we hope it converts to strong sales we are suppling test units to the market today. We are showing these drives and our Embassy software at the mortgage bankers conf today in Tampa
Our business model for esign is typically a setup fee up front and then a transactional fee per signature. it ranges depending on the value of the documents. can be as small as 25 cents and as much as a couple of dollars.
steven
steven
We always hear that the market needs a lot of education yet about the TPM, what it is and what it can do. I am not surprised that this is indeed the case as the TCG has not exactly been very forthcoming with information about this technology. I think we'll see broader adoption once the press starts talking about it on a much broader base and on a technically much better level than they do today.
It appears that the basic required elements for the TCG infrastructure (clients, servers, applications etc.) are finalyy coming together. Will the TCG and its member companies do the required - better - job better in the future or is what we've seen so far the extent of it?
Thank you
awk
Sprague
The enterprise buisness is also a show me market and that is hard when the hardware has to ship first to reach saturation levels for a big company. The army is doing a great service to the market showing how to spec TPMs now we need them to manage those TPMs.
Steven
With the above being true, what has been the barrier for a founding member of the TCG implementing Trusted Computing corporation wide?
Sprague
All kidding aside these are big companies and they don't always lead with their IT department Ask MS if they have moved customer service to Vista
I logged onto my computer with my biometric and MY TPM using Wave software and I am on Email through our corporate VPN with a Certificate held in My TPM and I have secure vaults on my drive. Now I need to replace my hard drive with a seagate drive.
Steven
Sprague
steven
Jackson
Do you see pressure mounting to adopt TCP? That pressure could be:
i - liability concerns, ie preventable loss of personal data,
ii - high internal need to safeguard data or,
iii - offering secure data technology as a competitive feature.
Do you see any of these as forcing adoption?
Sprague
However, the banks are not yet understanding that every user is getting a strong authentication device in their new pc and the banks have yet to turn it on. The majors need to lead in showing their financial services and online banking can leverage the hardware security the every user is getting for free with their laptop. When the first one falls there will be a scramble to catch up.
Sox compliance also looks for Best practices and TPM is clearly going to be part of best practices for all systems.
thanks for the question
steven
Jackson
I'm new to your stock, so could you provide some detail about company officers' buying and selling of stock over the last 6 months and any other insider activity?
Sprague
I have made no sales since 2003.
steven
Jackson
Quick follow up to David Frank's question above about cash flow. I understand that you aren't generating positive cash flow because you're working on ramping up revenues, but can you talk about your cash position and whether you have enough cash to get you to profitability without raising more?
What was your burn rate over the last year?
How much cash are you left with now?
What is your projected cash burn for the next 6 months?
Thanks for doing this -- it's really helpful.
Cheers
Sprague
We work every day to maintain the correct balance
steven
Will Dell enterprise purchasers of the Seagate FDE.2 get Wave's ETS enterprise version($49.95) budled with the drive?
Sprague
Steven
With regards to the below sentence, do you have a percentage number in mind of those that buy this notebook from Tarox, with the Seagete HD and Wave System's software, as to the number that will upgrade?
Seagate, Tarox, Wave Systems and ICT Economic Impact Presented Complete Solutions For Notebook Security. MANAGEMENT REGAINS CONTROL OF NOTEBOOKS
Sprague
1. Wave can help the user recover from a lost password to unlock the drive
2. Wave gives the enterprise the ability to centrally configure access for multiple users to a drive.
3. Wave provides audit logs that will prove a laptop had a properly configured seagate FDE drive if a laptop is lost or stolen.
We feel a high percentage of enterprise customers who purchase drives will opt to purchase the managment software as well.
steven
Any updates on NTT Data, Renesas, or Asian OEM's or for that matter any new OEM's coming onboard. TIA...Carl.
Sprague
As our aisian partners decide to use wave we will announce those agreements. We are making strong progress on a number of accounts and expect our presence in Aisia to grow.
steven
Could you provide any visibility on timelines and/or traction gained by Wave in the TNC and mobile sectors? Are we looking at 2008 for any real developments in these sectors and is Wave currently engaged with any of the main players (Juniper, Nortel etc for TNC and Nokia, ARM, Motorola for mobile). Thanks,
Sprague
steven
I asked you what percentage of the buyers of the Tarox Notebook do you think will upgrade? What I really meant to ask is what percenage of buyers of the SEAGATE HD will upgrade, not just the Torox buyers.
Do you think more will upgrade now, that buy the FDE.2s, than before, without this drive? Will it be as easier sell now?
Sprague
I think that the FDE drive is a simple concept that everyone needs who has a laptop. Managing that trust infrastructure is critical to any enterprise. So I hope everyone who buys a laptop buys a drive and then they buy the wave tools to manage the drive. It provides the best data at rest security solution available today. Hardware is just better than software for this function.
performance is better
Security is better
compliance auditing is better
Value is better
but I may be a little biased :) let's see what the market thinks.
steven
If there are FDE Drive production limitations, do you have some idea of what level of demand could be satisfied by Seagate in a given quarter in 2007, or for the year?
Do you expect other additional FDE Drive models to be offered by Seagate in 2007?
Thanks
Sprague
This is a modification to an existing product so I think it is more like asking for the first non black ford once you make the first red one the rest is easy
They said back in november that this functionality belongs on all drives.
they shipped something like 170 million last year
steven
Thanks again.
By the way, whoever came up with this forum, thank you!
der
Any update on DARTT or Hitachi
Sprague
Hitachi I can't comment on at this time. We are pleased to see multiple hardware Full disk encryption solutions coming to market.
steven
When we talk about Seagates FDE, I´m always wondering what software all the big OEMs, except Dell will use to manage these drives. In the CC you spoke about the first customer Enterprise calls with HP’s sales force. Could you expand on this please. Are these calls FDE driven or has HP finally realized that they need an interoperable solution?
TIA
ISPRO
Sprague
On trusted drives we would be pleased to support all of the OEMs with a fantastic solution for data at rest protection. Hardware has it's own lifecycle and every OEM is different. Some lead Some follow Some get consistantly run over .
steven
Star
6) I recall reading One Laptop per Child pcs with tpm are so secure antivirus (I think antispam, antispyware) are not needed. Wow! (: this plus eliminating user ids and passwords will free significant $$ in product and maintenance labor to focus on value added resources for a company. Symantec and other current players need to diversify before TCG vision is realized.
7) The 3 for 1 stock split needed so long term SH accumulating and not selling Wave since turn of the century will see their investment market value increase faster with their original number of shares in hand when numerous (: end users begin upgrading to full ETS and related mgmt software. Is institutional interest and their SP minimum requirements a reason the Board would not do so?
8) Seagate FDE preventing unauthorized USB drives from accessing network or client data is an exciting alternative to inserting glue in USB ports, cutting port wires on motherboard, disabling in OS. This could be applied to DVD drives, tape drives and likely internal hard drives. I also like the flexibility Wave Trusted Drive has by working with Seagate’s drive firmware with or without a tpm in the pc.
9) Above you need to replace your hard drive with a SG FDE and all you need is enter your PIN. You mean use ETS KTM to migrate your TPM keys, then your data, and then enter your pin with Drive Trust or Trusted Drive manager to encrypt your old hard drive so you can safely discard it or give it to another user? Where would you delete the key to that old drive making the data unrecoverable?
10) HP Integrity rx6600 server has a socket on the motherboard for a plug-in TPM. It can be added and removed anytime. I assume it is this way versus soldered because a server performs numerous tasks and needs to be repurposed or purged often? I did not find Wave software related to the rx6600 server on HP’s site. Is it bundled with OEM servers? Does Dell sell servers with tpms? Does Wave’s server software require a server operating system?
11) Do you agree that the human element in a company’s IT infrastructure, the Network Administrator, likely the Wave software administrator, implementing and maintaining network user and application policies for device and data access privileges is the potential weak link in trusted computing as are in networks today since they often have full access privileges and can easily give unauthorized users access to certain or all data and devices whether intentional or by accident? Fraud normally occurs by an internal person. Does Wave have a clear disclaimer for this in its licensing? Although, I think after carefully designed policies and implementation of trusted computing in networks the data and devices will be more secure than today.
12) I understand there is a trend to "dummy" terminals connecting to a central Citrix or Terminal server on a network internally and even externally to centralize and reduce software and hardware management costs. If this eliminates hard drives on desktop and notebook clients it hter will be less of a need for FDE except locally at the data server, and TNC although TPM for device authentication and key protection likely still needed. How will this affect Wave?
Thank you again.
Sprague
6. I think TPMs offer real value to secure the platform but I am not quite going to say all spam and viruses go away. The most important thing for one lap top one child Is access to services that are bundled with the platform that really is the future. Think of it like a cable box with only educational programing and all of the interactivity of the PC.
7. there are no pre conditioned opinions let's cross that bridge when we get there.
8. Thanks this is a very cool product and will bring a whole new paradigm to devices for authentication and access. Imagine a secure printer that could bind to your PC and then whever the two devices are they can talk to each other. Print a photo at home from 3000 miles away.
9. It starts easy if you delete the keys on the drive it can only be reformatted. Moving a drive between outhorized platforms with TPM binding will come in the future not version 1 we are keeping it simple to start.
10. We are thinking about the server software there are aspects that are to complicated to go into here. We will get ther but we are not there today.
11. we are fine on the disclaimer front but the goal is to make life simpler and build policy based control into the network for access. it will in the end be way easier to manage. You want HBO you get it and you get a bill.
12. I am not worried that the bandwidth on the airplane will ever allow me to have remote access.
I am also not worried that i will have to stop traveling
I am also not worried that I will wan to work from home.
I am also not worried that i want to take my data to a customer and not trust their conference room.
Every thin client need to have a tpm to authorize that it is the right thin client and that it has not been tampered with thin client are computers too.
steven
Thanks for taking the time to answer all these questions. Mine is a simple one. With all the data and laptop thefts, why hasn't Wave done more open marketing (i.e. full page Wall Street Journal ad) saying "we have the solution now" and "your personal information can be secure" to apply soft pressure on enterprises to adopt TPMs/Wave ? If my data was stolen from Citibank and they could have protected it, but didn't (via TPM/Wave) I, as a consumer, may go to a bank that did (protect it). So again, why hasn't there been more (any) advertising like this ?
Thanks again in advance.
Sprague
second the solution is more complex. Getting citi to adopt a product by shaming them into it is not necessarily the best strategy. We need the proof points before we can embarass everyone. the best solution is to drive the technology press and we make bold statements in that area. I am sensitive to the issues of overstating our impact.
however trusted computing will be the most effecive solution for any bank to do strong authentication and those who do it first will win customers and those that do it last will be bought by the others.
Some years back Wave demoed at the Cartes show an app for secure banking that would make ID Tronic a thing of the past!! When do you see secure consumer banking with both the Cartes Bancaire group in Europe & in the US ala FDIC stips? TIA...Carl.
Sprague
The market is ready
the technology is ready
Now we just need to wake up the banks we are pissed and their mickey mouse solutions that are not secure do not make us safe. It may take more regulatory intervention to remind the banks that customers are important. We have seen strong interest within the IT departments of a number of financial institutions but not yet on their consumer side.
There is motion happening but not as fast as we would like. Wave sees this as an important area but not a short term revenue area.
Best thing we can all do is send our bank president a letter.
steven
der
Thanks for your answers. This has been a great forum and I appreciate your taking time to respond at length over the past few days.
Great job!!
Kevin
Sprague
I appreciate all of your support and interest.
steven
You responded to my question with this statement "Their IT Department !!
All kidding aside these are big companies and they don't always lead with their IT department."
What is Wave Systems's strategy to overcome the IT dept obstacle? Is it a matter of tpm saturation, market pressure, economic benefit, compelling sales team? Something else?
Sprague
We had a meeting the other day with a large potential customer over 100K seats and they had a room full of really smart guys. They got it. they wanted tpms, they have a plan for how they want to use them. They found us as a key supplier.
now we have to close a deal with them and work it into their it planning and budget. These companies will show the world the way.
We educate the press, the analysts, the pundents, and the regulators. Every we day we make progress.
Steven
Does your web site have a general or specific case study on costs, including customer infrastructure, versus cost savings within the IT organization itself? IMO, ROI talks, costs walk.
Do we expect much uptick in the burn rate going forward in 2007?
Thanks
Sprague
We will grow the team as the strenght in sales justifies it. Our balance is okay today We know what to build next there are huge opportunities that are very clear but we have to maintain balance.
The business with seagate is an example of an area we have been investing in for 3 years and it is only really clear today how strong the market could be for this technology.
There are other technology components that are even stronger but the market is not ready yet to understand the role of the service we could offer.
steven
Thanks for taking the time to answer these questions in this format. As a long time shareholder I feel the frustration of both the shareholders and what can only be more of the same on your end. A few questions if you will.
Do we have anything going on with EDS and Maximus any more? These seemed so promising back in the day, and seems to have not paid off the way one would have hoped.
There has been a lot that has been banded about on the message boards about the Papa Gino's usage of ETS. Can we assume that they are the only enterprise using the system after 14+ months since this is the only public case study that has been cited by Wave, and how much influence did Chris Callahan have in bring that system into the Papa Gino's fold?
Steven as a major player in the TCG, the one thing that has bothered me is a reluctance of the other players in the group to publically aknowledge using any portion of Wave's offerings. I understand that this would give the impression of endorsing Wave's products over some of the other companies that are included within the TCG. That being said we are also told Wave offers the only comprehensive, interoperable solution available, so I don't see how this would be stepping on anyones toes. If a company is looking for a complete solution Wave should be the one they turn to. Thanks for your time Steven
Sprague
The future of TPMs is as the foundation for a global services based network with policy driven access control. This will make it possible to log into your PC and have your PC manage all of the services and devices that you have access to. The race to capture Eyballs has yet tot really start. YouTube had a 100 million viewers but no subscribers. This means that they can only deliver new services by adding to the portal. ie a transaction like ebay buying skype. The concept of bringing a discounted service to an existing installed base through identity and security has yet to really happen. AAA travel does it every day so does comcast. The billion customer PC network is still virgin territory. Our plan?
1. Get your brand on every PC or as many as possible
2. Build the tools to manage the relationship with the customer or their platform and for the customer to manage thier keys or relationship with a service.
3. Demonstrate viable transaction based models
4. Facilitate the package and promotion of services to the end user.
Every day we make progress. We are working to build the enterprise business to support the deployment of the TPM as a global subscriber managment model for the corporation and for the user.
Papa ginos has been a fantastic customer but they are on of about a dozen in differnet industries. Chris at Papa ginos has been a fantastic advocate for TPM because he can see the value of a standards based security solution.
Big companies are great partners and can be a real pain as well. Sales will drive our powerbase and strength the respect we get from everyone in the market. I won't say it is not frustrating but we will change the world and we are making a huge contribution to driving the security of the internet. This will benefit all of us as shareholders, parents and citizens.
Security is a very powerful technology and the right plan has been a quite launch of this market so that it could be launched. it is hard but it has been the right thing to do now it is time to pull back the curtains and it is happening with Vista, seagate, DOD....
Steven