On Monday May 12, 2014, WidePoint Corporation (WYY) announced a collaboration with Wave Systems Corp. (WAVX) that will enable WidePoint to utilize Wave’s security software technology to secure digital certificates within a trusted platform module (TPM) chip on customer devices. The solution strongly binds certificates to an identity and protects the certificate private key within the TPM hardware module.

Wave’s CEO Bill Solms provides some additional perspective on the announcement through the following Question & Answer session:

Q:     Is this a technical agreement or is this a commercial agreement, or both? How does it benefit Wave?

A:      This agreement and our relationship with WidePoint is very significant for Wave, both in terms of its revenue potential but also because it partners us with WidePoint which has a robust presence in the U.S. Federal Government.

         WidePoint is a certificate authority for the Federal government, which means they manage digital certificates, a building block of security and access, for the government.

         We are providing them our proprietary software in exchange for a per-device royalty. The synergy in the relationship is that they can bring our technology to their customers and we both benefit.

Q:     Is this a development agreement?  Will you receive development funding as you have in the Micron deal?

A:      This is NOT a development agreement – the technology is complete on Wave’s end and ready to be offered.  So there is no development period or funding, just the roll out of a solution that provides a per-device royalty payable to Wave.

Q:     Is there revenue attached to this agreement?

A:      Yes, we have negotiated a per-device royalty for the use of Wave technology to store digital certificates within the trusted platform module (TPM).

Q:     How does Wave get paid?

A:      For every device on which WidePoint provisions a digital certificate onto a TPM, Wave will receive a “meaningful” per-device royalty.

Q:     How did the agreement come about?

A:      Wave had been in discussions with WidePoint for some time but the dialogue had stalled, principally due to a deal structure that was not sufficiently favorable for both sides.

         We recognized that this relationship had good potential; reinitiated the dialogue and ultimately threw out the old agreement and developed a new approach that worked for both parties as a “Win-Win.” I met personally with the WidePoint management a few months back, Andy Avery worked hard to move the deal forward and to get us into contract.

Q:     When can we expect initial revenue and at what scale?

A:      We believe it will be a relatively short time frame from signing this agreement to Wave being able to record initial revenue.

         As for the scope and scale of revenue, it’s very hard to assess at this point. Like any new offering, it’s most likely that it will take some time for awareness and understanding to be built with customers before any larger scale deals would be likely. We’ll certainly know a lot more in a few quarters when we have some experience with this solution and customer reactions to it.

Q:     What sort of devices will this solution involve?  What sort of certificate applications?

A:      At this point any device with a TPM and in the Federal sphere that is principally desktop and laptop computers.  Ultimately this can extend to tablets and mobile as those devices are supported in the federal space with TPM, etc.

         This can be used for really any digital certificate, and potentially multiple “certs” on one device.

Q:     Will this agreement cannibalize Wave’s own sales opportunities for this solution?

A:      No, this should not cannibalize Wave’s sales effort. In fact, we really expect it to help jump-start sales of this solution by virtue of WidePoint’s reach and market position.

         There are probably several things we can work on with them that would build upon this initial agreement.  For now our focus is on making this relationship successful.

View the press release from May 12, 2014.