HP and Autonomy: What Is Ahead?

August 18, 2011

I have been cruising through the write ups about the Hewlett Packard purchase of Autonomy. Amusing some are. I quite enjoyed the Bloomberg story “HP to Buy Autonomy Cloud Software for $10.3B” in the 4 54 pm edition.

Why?

It shows what is going to happen when “real” journalists write about search, content processing, and the Autonomy technology. Here’s the example that caught my attention:

For HP it’s an intriguing volte face,” said Tim Daniels, a strategist at Olivetree Securities Ltd. in London. “Autonomy is a leader in unstructured data — so that’s data that isn’t in the form of spreadsheets or word documents.

I highlighted the bit which I think is at odds with what we typically say. Here in Harrod’s Creek, Word and spreadsheets fall into the category of unstructured information just like email and petabytes of other information not lined up like Marines on parade.

Other observations:

  • Hewlett Packard, not Autonomy, is on the hook to make its purchase of Autonomy’s technology fit into the Hewlett Packard Leo Apotheker is crafting. My hunch is that the task is going to be a formidable one.
  • The Microsoft experience with Fast Search & Transfer has been in my opinion a harbinger of what is ahead. Fast Search & Transfer has been a challenge under Microsoft’s stewardship. The executive shuffles have been sprightly. The technical challenges interesting.
  • The price tag is going to put some pressure on everyone involved with making Autonomy generate sufficient revenues and margins to make the deal a bonanza. At a time when there are open source alternatives and competitors offering robust solutions at competitive prices, HP will have to look beyond license fees. In order to deliver the consulting services to make the $10.3 billion deal a pot of gold, HP will need to address the expertise shortage that exists in search and content processing.

Our view is that Autonomy has worked hard to reach the peak of the enterprise search sector. Compared to the fate of Entopia and Convera to name two competitors which fell by the way side, a tip of the hat to Autonomy’s management team is due.

This challenge is likely to be as risky as Google’s planned acquisition of Motorola Mobility. The killing of consumer products, the Treo / WebOS when added to the Autonomy cost makes the HP play as large as Google’s gamble on its Motorola acquisition. I am glad I am old and watching these two Silicon Valley outfits’ actions from a safe distance.

Now the work begins to make the $10.3 billion deal pay off. For a comprehensive look at the IDOL technology, you may want to take a look at my new monograph The New Landscape of Enterprise Search.

Stephen E Arnold, August 18, 2011

Comments

4 Responses to “HP and Autonomy: What Is Ahead?”

  1. J on August 18th, 2011 7:08 pm

    Look behind the curtains, AU is just all smoke and mirrors. A company that has attempted to cobble together technologies to form a highly dysfunctional organization. HP has their work cut out for them to fit AU into the HP brand.

  2. asas on August 18th, 2011 8:21 pm

    Autonomy is losing in E-Discovery space as well. Solution is very expensive and does not work. Utter customer dissatisfaction and it is losing money in all its acquisitions. Not sure what the folks in HP were thinking.

  3. Raphael Perez on August 21st, 2011 10:52 am

    After Microsoft/FAST and Exalead/Dassaul Systems its now with HP/Autonomy; 3rd act in big $ purchase of a key Search software player. It will be very intreresting to see future results and when HP will stop PC sales, it will be easy for analyst to figure out what they did with Autonomy business. For me at 10 Billions, and because they will have to cut licenses costs.. It’s a great challenge Mr Apotheker proposes to the company he is heading now.

  4. Dave Haucke on August 22nd, 2011 12:23 pm

    Hopefully, the deal will translate into the kind of superior customer service that enterprises are demanding from IT vendors today (and which ISYS prides itself on), but based on Autonomy’s reputation, the cultural integration with HP is likely to be even more formidable than the technology integration. While that’s good for us, and our document filter and OEM search technology , it’s likely to be a massive challenge for HP’s customers.