Infinigate pledges support to washed-up Wave resellers

Wave's UK distributor offers continued first- and second-line support following bankruptcy bombshell

The UK distributor of bankrupt security vendor Wave Systems says it will continue to provide local partners with first- and second-line support.

Wave applied for bankruptcy on 1 February after restructuring last summer and subsequent refinancing failed to revive the encryption vendor's fortunes.

It had admitted in the past that its small scale meant it had struggled to win enterprise business and compete with larger competitors such as RSA Security, Safenet (now owned by Gemalto), Symantec, McAfee and Sophos.

Alex Teh, joint managing director of Wave's sole UK distributor Infinigate, told CRN his firm would continue to support Wave's 50-plus UK resellers, the majority of which came on board via Wave's 2011 acquisition of Safend.

"We don't know a lot and were only made aware of it when it went to press," he said.

"We will continue to support our partners and customers as best we can and will continue to do first- and second-line support. We have been in contact with the trustee who is in charge of looking after the assets of the company and will get notified of what's going on as soon as they do."

Last August, NASDAQ-listed Wave embarked on an "aggressive" restructure of its business to reduce its cash burn rate. In the preceding quarter, billings had almost halved year on year to $1.9m (£1.3m) due mainly to a drop in royalties from its OEM relationship with Dell.

A last-gasp move to secure $3m in accounts receivable financing in December as it evaluated strategic alternatives proved futile.

"While Wave's solutions continue to win technical evaluations against our competition conducted by our prospective customers, our small size and limited financial resources have made it difficult to meet our objectives of closing those large enterprise sales," CEO Bill Solms said at the time of the restructure.

Teh (pictured) said business had remained brisk in the UK right up until last week.

"We were closing lots of new business deals and were continuing to get lots of enquiries," he said.

Stuart Grist, group sales director at security VAR Intellect Security, said Wave's demise would "open the door for us" with some of the encryption technologies it carries, including WinMagic, Vormetric and Symantec.

"We are starting to see demand already from people who had put Wave in and are looking to switch to other vendors," he said.

"We did our due diligence [on encryption vendors] and although we did look at Wave, there were some alarm bells around their financials as well as their technology - we felt others were superior."

Frank Coward, managing director of WinMagic Platinum partner Gardner Systems, urged any customers left high and dry to evaluate alternative options carefully.

"I would hope they'd make a professional and intelligent decision, rather than a knee-jerk reaction. Security is not something you can mess with," he said.

Ian Kilpatrick, chairman of distributor Wick Hill, which carries encryption technologies from the likes of Becrypt and Check Point, said although the margins in IT security are healthier than the wider IT market, encryption can be a tough sell.

"Even today there are a lot of people who haven't taken steps to encrypt. We have seen sales growth in this area but it's not as easy a space as it should be," he said.