Autonomy: The Canny Farmer Dell Does Not Buy a Pig in a Poke
December 11, 2012
Information about Hewlett Packard’s amazing judgment continues to surface. I just read “Dell Founder ‘Turned Down Autonomy’.” I assume the write up is accurate. If so, the key point is that a sales type was “shopping.” Autonomy. According to the article: [Michael Dell] “rejected the British software firm because it was “overwhelmingly obvious” that it was overpriced.”
The “overwhelming obvious” caught my attention. But here is the important bit:
His comments raise fresh questions over HP’s decision to pay $10bn (£6.3bn) for Autonomy last year – a 59pc premium to its market value at the time – and its subsequent claim that it only overpaid because the British company had cooked its books.
Oracle thought Autonomy was too expensive. Dell thought it was too expensive. HP thought that the price was right. What aspect of Autonomy’s financials looked so juicy to HP and so unappetizing to two other companies?
My hunch is that Autonomy prepared one set of numbers and a presentation. Dell and Oracle did not buy the pitch or the numbers. HP decided the pitch and the numbers were okay.
Was Autonomy’s sales rep creating different deal books for each company? I doubt that happened but I suppose it could have put in the extra work. A more practical view is that HP did its analysis and made a decision. Now HP wants to get out of its deal.
The question, “Why was HP unable to see what Dell and Oracle saw straight away?” Obviously no Swedish Nobel prize winner was involved.
Stephen E Arnold, December 11, 2012