Shares of Research in Motion (RIMM) are down 35 cents, or 0.8%, at $43.17 this morning after Wunderlich Securities analyst Matthew Robison cut his rating on the stock to Hold from Buy, and cut his price target to $46 from $76, writing that he expects the company to “churn down to hard core.”

What does that mean? Well, the company is not going to “participate in the mainstream of smartphone industry growth,” he writes, and it will see churn take hold until there is no longer any growth for the company.

There’s a kind of two-sided problem, according to Robison: BlackBerry users who really need top-tier enterprise security — the BlackBerry Enterprise Server — are only about a third of the total BlackBerry users, because, “corporations increasingly distinguish between users needing mobile access to data that must be seriously defended and users that can be allowed limited network access via personally liable devices.”

And as a result, RIM is left to try and market everything it’s got other than top-tier security, which Robison sees as a tough slog for the company with poor results thus far:

For the two-thirds of the RIM service subscribers that may not have critical security needs, RIM must go to market with product features and an applications ecosystem that, in terms of innovation rate, have been disadvantaged by the extra effort required to support the security and control mandate of the core BES user base.

New BlackBerry products in late summer (using OS 7) will sell well among the faithful, Robison writes, but “for new smartphone customers in the U.S. the BlackBerry brand continues to fade.” Robison expects RIM management will at some point sharply revise downward the $7.50 per share in earnings for this year that it has continued to insist on, given that it seems all pegged to those BlackBerry 7 phones.

Robison expects competition to be intense in overseas markets from budget phones based on Google’s (GOOG) Android software, not to mention marked-down Nokia (NOK) units. The arrival of technologies such as the “QNX” OS on BlackBerry will probably be too little, too late.

Robison has been quite positive in general regarding the PlayBook tablet computer, and writes that he still likes it, both in user experience and the strategy of linking it to the BlackBerry. However, it will sell too few units to offset the drop in BlackBerry sales. He models 2.7 million units of PlayBook this fiscal year, down from a prior 3.9 million unit estimate , and perhaps 3 million next year.

“The fact that the PlayBook works so well (this perspective is shared by our retail contacts) yet does not seem to sustain initial sales momentum highlights the shift in consumer orientation toward iOS and Android,” writes Robison.

In sum, Robison expects churn to take its toll on the company, and after 2013, there will no longer be any growth. He forecasts revenue in that year rising just 7%, down from perhaps 11% this fiscal year.

Interestingly, Robison concludes, “The biggest threat to RIM is obsolescence of the BlackBerry Network,” which remains, “the gold standard” in security. Robison mentions Intel’s (INTC) purchase of McAfee as an attempt to create broader networks with similar embedded security, but for the moment, the top-tier of enterprise security will stick with RIM.

The network could be useful in “cloud” computing, and therefore valuable to an acquirer, he writes, however, routing and switching technologies such as deep packet inspection, are already eroding the value of RIM’s network.

Article courtesy of Tech Trader Daily

EMC (EMC) shares are up 82 cents, or 3%, at $27.54 following the company’s reporting Q1 results roughly in line with expectations and a forecast for the year just a tad light of estimates.

The report comes after software maker VMWare (VMW), in which EMC holds an 80% stake, last night beat expectations and raised its current-quarter forecast. VMWare shares are up $10.11, or 11%, at $96.08 this morning.

Q1 revenue rose 18% to $4.61 billion, a hundred million dollars above estimates. EPS of 31 cents met expectations. For the year, the company sees $19.6 billion in revenue, slightly below the average $19.65 billion, and $1.46 in EPS versus $1.48 Street consensus.

Analysts this morning are generally encouraged, though they lament the lack of any upside in the numbers:

Mark Moskowitz, JP Morgan: Reiterates a Neutral rating on the shares. The company seems “increasingly confident” it will meet its full-year target for revenue of $19.6 billion and EPS of $1.46. Still, he thinks the lack of upside could weigh on the stock “in coming days.” NetApp (NTAP) probably has better prospects for revenue growth, but EMC is a close second, he thinks. Moskowitz recommends patient investors pick up the shares on any pullback.

Richard Gardner, Citigroup: Reiterates a Buy rating. Storage product sales were strong, especially for the more expensive products, but also a 20% increase in mid-range product sales. However, “Revenue was disappointing for Content Management products and modestly disappointing for Security products.”

Daniel Ives, FBR Capital: Reiterates an Outperform rating. The core “Information Infrastructure business” was up 14%, better than he’d expected, suggesting an “impressive” product cycle, he thinks. “While the company did not raise the bar on its outlook, we believe this is the prudent strategy as the company continues to “under promise and over deliver”, a dynamic we expect will continue over the coming quarters.”

Keith Bachman, BMO Capital Markets: Reiterates an Outperform rating and a $29 price target. “Net, a solid quarter, but we think investors would like to have seen a modest EPS beat.” Bachman’s slightly disappointed by the underperformance in the “information Intelligence” category, as well as the “RSA” products. And “information management” products, down 10%, showed “yet another weak quarter.”

Article courtesy of Tech Trader Daily

One of these days, there will be an “internet of things,” or once-dumb appliances and gadgets smartened up with chips and internet connectivity. Wireless chip maker Atheros Communications believes that day is not so far away.

Today, the San Jose maker of wireless chips is announcing an initiative that will make it easy for internet-aware home appliances to transfer data over electrical wires in the home to a user’s web-connected devices and to the smart grid. This initiative is one of the enabling steps to putting smart appliances on the grid without spending money to wire them with traditional Ethernet-based wiring.

“There will be 100 internet-connected devices per home one day,” said Adam Lapede, senior director of internet of things technology at Atheros, in an interview.

It’s kind of a pipe dream, but it’s a big one that is shared by a lot of companies that want to make everyday appliances smarter, more useful in providing data feedback, and more energy efficient. Atheros has chosen to connect the smart appliances using the HomePlug Green Phy, or a version of the HomePlug AV standard for transferring internet data over home electrical wires.

Atheros, which is in the process of being acquired by Qualcomm, designed the technology so that smart appliances can transfer or receive internet data without consuming a lot of power or taking much of the available internet bandwidth of the home wires, Lapede said. Once connected, these devices will be readable, recognizable, locatable, and addressable. It means they will be able to provide information such as how much energy they are consuming and when is the best time to use them to preserve energy.

“We need to figure out how to reduce the demand during peak usage and improve our efficiency,” Lapede said.

Lapede said the cost of putting internet connectivity is getting smaller and smaller. Atheros, which makes Wi-Fi chips and other related technology, hopes to drive the costs of the connectivity chips even lower by making them in huge quantities and standardizing them across the industry

With the HomePlug Green Phy technology, Atheros is asking software developers to begin developing applications that will use its chip hardware in the future for the internet of things vision. As envisioned, the technology will be integrated into stand-alone gateway devices or into the appliances themselves. It will allow the transfer of data from device to device at a rate of 10 megabits a second or more. That will happen seamlessly, without the need to translate the data from one format to another.

Lapede said that applications will have to use built-in encryption and other security methods to ensure that a neighbor won’t be able to hack another one across the smart grid. Lapede said that the power line technology has rivals, but he believes it is the best way to reach all of the appliances in the home. And while HomePlug AV has a number of rivals, he says chips based on the standard have shipped in the tens of millions of units worldwide. So it makes sense to adapt HomePlug for the internet of things.

Once the applications have been defined and requirements set, Atheros will design chips based on the standard and ship them to customers in the coming years.

“We expect to see traction in 2012,” Lapede said.

Tags: HomePlug AV, HomePlug Green Phy

Companies: Atheros Communications

People: Adam Lapede

Article courtesy of VentureBeat » deals

Bit9 has raised $12.5 million in a new round of funding for its enterprise security business.

The Waltham, Mass.-based company offers protection for endpoints, or the smartphones, tablets, and computers that connect to an enterprise network. Since those endpoints are increasingly vulnerable to attack, Bit9 specializes in protecting them so that information technology managers can still allow employees to use them. Overall, the endpoint security market is expected to reach $10 billion by 2014 as corporations try to protect their assets from increasingly sophisticated cyber attacks.

Atlas Venture led the round, with participation from existing investors Highland Capital Partners, Kleiner Perkins Caufield & Byers, and .406 Ventures. New investor Paul Capital also joined the funding. To date, Bit9 has raised more than $23 million.

Demand for Bit9’s technology has escalated in the past year across industry segments such as government, healthcare, defense and retail. That happened in part because of sophisticated attacks, such as Operation Aurora, which cracked Google’s security system, and Stuxnet, which destroyed some of Iran’s nuclear centrifuges.

Patrick Morley, chief executive of Bit9, said that the company’s technology allows IT teams to precisely control what software is allowed to run and what is not. The company saw 140 percent revenue growth in 2010 and 60 percent growth in new customer acquisition. The company will use the money for new product development, better sales and marketing, and expansion in Europe.

Market researcher IDC expects the market to grow at a compound annual growth rate of 8.3 percent, reaching $10 billion in 2014, compared to $6.6 billion in 2009.

Bit9 was founded in 2002 and has more than 70 employees. Rivals include Symantec, McAfee and others.

[image credit: inbluetech]

Tags: cyber attack, security

Companies: Bit9

People: Patrick Morley

Article courtesy of VentureBeat » deals

CertiVox, an information security startup, announced this morning that it has raised $1.46 million in funding.

CertiVox provides application and content security, as well as on-demand encryption key generation services. The company’s cloud-based infrastructure aims to satisfy the need for privacy, authentication, integrity and non-repudiation. Businesses can use the service to reduce identity theft and data loss, secure emails, and to implement digital rights management.

Say Brian Spector, CEO at CertiVox, “Our breakthrough security technology is so easy to implement it effectively removes the barrier that has prevented enterprises and ISVs from fully embracing cloud-based services because of their concerns over protecting sensitive information.”

The round was led by Pentech Ventures with participation from Octopus Investments. Dr. Sandy McKinnon, a partner at Pentech Ventures, and Mr. Bruce Leith, an ex-managing director at London Bridge software, will be joining the board of directors. The funding will be used to bring to market CertiVox’s key management infrastructure as a service.

CertiVox, which was founded in 2009, has offices in London and San Francisco and had previously raised $250K in funding.

Tags: cloud computing, information security, security

Companies: CertiVox, Octopus Investments, Pentech Ventures

People: Brian Spector, Bruce Leith, Sandy McKinnon

Article courtesy of VentureBeat » deals

$$$ BlackRock’s Doll Says Worst May Be Over [CNBC]

$$$ Obama Aides Say Social Security No Threat to Nation’s Finances [Bloomberg]

$$$ David Letterman and Rand Paul: A Painful 12 Minutes [WSJ]

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$$$ Hedge Funds Have Run Out Of Good Ideas [Fortune]

Article courtesy of Dealbreaker

As we connect lots of gadgets to the internet, they become vulnerable to hacking. That’s why McAfee is teaming up with Wind River Systems to provide built-in security for embedded devices, or appliances with some computer smarts in them.

This is one more sign that, as we head toward that digital nirvana called “the internet of things,” we are not going to get there unless we can protect users. The McAfee-Wind River combination will protect everything from car entertainment systems to airline cockpit computers. Wind River’s software is already in a billion devices.

Many of these devices didn’t need the built-in protection before because they weren’t connected to the internet. But now, car makers are building Wi-Fi systems in cars so that you can get your messages or web videos in the car. And any connected device can be attacked, said Ken Klein, president of Wind River Systems.

Dave DeWalt (pictured), chief executive of McAfee, said his company would integrate its software into Wind River’s operating system for embedded gadgets. That’s easy for the companies to do, since they are both owned by Intel.

“This is all about moving beyond the PC,” DeWalt said in a conference call this morning.

But security in the embedded market is very different from PCs, where there’s lots of memory available to have beefy security software running all the time. The embedded software often has as little as 100,000 lines of code, compared to millions of lines of software code for complex applications. That means the embedded security software has to be small and efficient. Klein said that means that protection is limited to something like a “white list.” That is, if the embedded system is only going to connect to a few web sites, you can give it the capability to visit sites that have been scanned and are clean.

The companies made the announcement during the RSA security conference in San Francisco. They said that it’s clear that embedded security will become a big deal in the future. McAfee estimates that the number of connected devices will grow to 50 billion by 2020, as everything from alarm clocks to washing machines become web-connected.

Hackers have already attacked embedded systems such as industrial controls, smart meters, parking meters and other connected devices. That’s creating a big headache for security programmers, since the security software is often more complicated than the main software running on the device itself.

Both Santa Clara-based McAfee and Alameda, Calif.-based Wind River will work together on purpose-built solutions for particular markets. The security solutions will roll out starting this year.

Tags: embedded systems, security

Companies: Intel, McAfee, Wind River Systems

People: Dave DeWalt, Ken Klein

Article courtesy of VentureBeat » deals

He showed up this morning in a White Honda Civic, requesting face time with “the president.”

City police are looking for a man who appeared at UBS’ sales and trading headquarters on Washington Boulevard and brandished a baseball bat after asking for “the president.” Capt. William Mullin said the man drove to the financial company’s office just before 7:35 a.m. Monday and approached a security officer asking to see the president. Mullin said the security officer wasn’t entirely sure if the man was looking for a top UBS official because the firm’s international headquarters are in Switzerland, where all of its top officials work.

After demanding to see “the president,” the visitor then walked back to his car and pulled out a bat. He then began gesturing with the bat before driving away in his white Honda Civic. Police checked the area and were unable to find the man or his car.

The local paper helpfully notes- in case the guy is reading?- that UBS’s top officials are located in Switzerland, although, it’s pointed out, you can find some pretty high-ranking guys in Stamford, NYC, and Weekhawken as well.

[Stamford Advocate]

Article courtesy of Dealbreaker

Phone manufacturer Motorola has acquired 3LM, a stealth startup that develops security technology for phones running Google’s Android mobile operating system.

3LM develops software designed to make phones running Android as secure as BlackBerrys to make them more viable as enterprise-class smartphones, said co-founder Tom Moss. The company wants to work with original equipment manufacturers (OEMs) to pre-load its security software on phones rather than posting an application on the Android Marketplace.

Despite being a part of Motorola, 3LM still plans to work with other Android phone manufacturers. That’s because the both Motorola and 3LM want to avoid creating an arms race when it comes to security software for Android smartphones, Moss said.

“You want OEMs on one consistent solution,” Moss said. “That way customers can pick whichever phone they want instead of having to rely on whatever the company asks for.”

Moss, a former Google executive that worked on Android, said Android was more secure than the iPhone and Windows Phone 7. Android is typically seen as a more open mobile operating system, so it’s easier to run third-party applications — which means it’s a better candidate for enterprise phones, he said. Moss also plans to work with tablet computer manufacturers and package 3LM’s software tablets for enterprise use.

3LM has actually been around for less than a year. The company was founded in July last year, and actually began talking with Motorola about a potential deal in September, Moss said. The company wasn’t disclosing any additional details about the acquisition. 3LM has raised around $1.5 million from a seed funding round led by a number of angel investors and Accel Partners.

[Photo: Daniel Leininger]

Tags: Android, Blackberry, enterprise, security

Companies: 3LM, Google, motorola, Research In Motion, RIM

Article courtesy of VentureBeat » deals

Securing documents became more relevant after Wikileaks unleashed thousands of confidential documents concerning the U.S. government onto the Internet. Enter Confidela, a provider of software designed to secure documents and make them more difficult to crack unless the reader has permission to view them.

Confidela, designer of the WatchDox document security program, announced today that it has raised $9.25 million in its second round of funding led by Shasta Ventures.

WatchDox basically wraps up a document in a protective layer that requires another user to have permission to read it. The sender has full control over the document and can decide whether to delete it, allow the reader to print it and pretty much everything else. The document is read through a web browser after it has been opened. There are also applications to access WatchDox-protected documents on the iPad and iPhone.

The company has around 3,000 customers, including a number of businesses in the financial services industry that deal with more sensitive information. Other customers include some companies in the semiconductor industry, where intellectual property needs an additional layer of protection. But perhaps the most notable new customers coming to WatchDox are governmental agencies concerned with potentially disastrous leaks following the Wikileaks scandal.

The service can already be integrated into some email services like Gmail and Microsoft Outlook. Part of the funding will be spent on developing a plug-in for Salesforce’s customer relationship management (CRM) software and Microsoft’s Sharepoint software, said Moti Rafalin, Confidela’s chief executive. But the majority of the funding will be used on sales and marketing, he said.

Confidela earlier raised $5.5 million from Gemini Israel Funds and Shlomo Kramer, co-founder of Check Point and Imperva — two other security firms.

Tags: document security, leaks, security, Watchdox

Companies: Confidela, WikiLeaks

Article courtesy of VentureBeat » deals