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Mr. Joel Achramowicz
Managing Director
Equity Research
Merriman Capital, Inc. Thank you for joining us today, Joel. Please give us a brief overview of Merriman Capital and tell us about your background.

Joel Achramowicz: Merriman Capital, Inc. is a wholly-owned subsidiary of Merriman Holdings, a public company founded in 1987 and traded on the OTC under the symbol, merr. The firm is a full-service investment bank offering securities research, trading, institutional sales, advisory services and banking counsel for small- and micro-cap companies mainly in the U.S. and Canada. However, the bank does do business at times on a global basis. We have about 50 professionals located around the country with two major offices in New York and San Francisco. We read with great interest in your recent research that, “Software has traditionally secured critical information on networks and PCs, and it has allowed users to access various centralized systems applications. But virus attacks and security breaches have demonstrated that server software, on its own, is not always capable of completely securing a network or remote user platform. Because of these security concerns, there is a pressing need in the computer industry for the development and deployment of a more robust and reliable security infrastructure, including new security hardware in devices, to guard against these persistent security risks.” Which companies are you tracking in this endpoint security market?

Joel Achramowicz: Actually our focus is directly for the most part on smaller companies; however, we keep our eyes on most of the large players as well. In particular, we’re looking for major technological shifts in the tech industry that can cause significant disruption, both macro- and micro-economically. For instance, historically developments in network security have helped to compartmentalize the security function within the bounds of most multi-nationals and what we might call the intranet. This has been manageable for the most part as long as companies could tether their employees to the internal VPN. Clearly, this is what we were getting at with the quotation you used above. Unfortunately for most CIOs, the advent of ubiquitous mobile computing has blown this internal model apart. The question becomes: How can we ensure security and authenticate external access to data at the systems level when employees are using all types of mobile platforms at remote locations?

This concern caused us to become interested in developments in Trusted Computing and the TCG consortium. It seemed evident to us that endpoint security will be one of the next major system challenges for multi-nationals around the world. We believe that the TCG standards can help these institutions regain control of their distributed, mobile workforces with some modicum of secure computing based the TCG standards platform. Every mobile device it seems to us must have a Trusted Platform Module (TPM) for reliable authentication. Moreover, every disk must have a controller that can encrypt data directly on the drive to protect this critical and vulnerable data store—particularly on laptops and tablets. We call these drives Self-Encrypting Drives (SEDs). The TCG is evangelizing the incorporation of TPMs, SEDs and critical endpoint security polices its established to ensure better computing security for the new era of ubiquitous mobile interactions.

Some of the companies we like that are championing TCG standards going forward include Microsoft with its forthcoming Windows 8 platform; Wave Systems with its comprehensive set of software applications that can manage disparate endpoint devices at the systems level; and, we’re intrigued about ARM Holdings, which has recently joined the TCG and is we believe planning to incorporate TCG standards into its popular processor cores. There are others, too, that we like; but, that’s a start. What is your perspective on the market drivers for these solutions? And what about barriers to greater adoption in the marketplace?

Joel Achramowicz: Unfortunately, security has always been a fragmented industry and this has been both beneficial and a detriment, too. With the scope of computing becoming so widespread today, we believe it’s perhaps time to have a major player such as Microsoft codify a new comprehensive set of TCG security applications into a systems platform—such as the next Windows 8 platform—to provide comprehensive, corporate control over both internal and external security and across a plethora of devices. This has yet to be done and we believe that Microsoft can help to validate the TCG standards as a new paradigm for distributed system security in today’s mobile world. What are some of the large caps, mid-caps and small caps, you are tracking in this space? Care to give a brief thumbnail on each? Any favorites?

Joel Achramowicz: Obviously, Microsoft, Intel (McAfee), Symantec come to mind, along with the PC OEMs; but, we’re interested to see whether Apple, Google and Samsung join the TCG. Nokia recently joined; but of course, that company’s working closely with Microsoft. And, we mentioned Wave Systems above as perhaps the “biggest” little company driving trusted computing. is another name that we might see joining the TCG since that major e-commerce behemoth has a stake in distributed mobile computing devices. Clearly, this is going to be an interesting space to watch going forward.