HP: Deconstructing IDOL

March 12, 2014

Michael Lynch did what no other founder of a search-and-retrieval company was able to achieve. He operated a company that grew from a couple of government contracts into an $800 million plus giant in 15 years.

My analyses of the pre-Hewlett Packard Autonomy emphasize several facets of Mr. Lynch’s achievement. Competitors were not able to match Autonomy’s marketing. Whether it was the “Portal in a Box” or the augmented reality system Aurasma, competitors had to catch up with Mr. Lynch’s products, features, and benefits. As other search vendors played musical CEOs, Autonomy built a stable senior management team. With each change in leadership, competitors lost time with reorganizations and relearning. Autonomy’s management capabilities have been ignored. Mr. Lynch figured out that growth from search required acquisitions. Once the financing was in place, Autonomy gobbled up companies and its revenues soared.

Companies like Fast Search & Transfer and Endeca labored to close the revenue and marketing gap with Autonomy. Both failed. Fast Search resorted to accounting tricks, and Microsoft has been “investing” in Fast Search technology to make it fit with today’s enterprise. Endeca hit a glass ceiling at about $140 million in annual revenue despite evangelists, fancy MBAs, and a clever partnering method. Oracle is marketing Endeca as a business intelligence system and eCommerce system, not a search system. Other companies with promise just failed. These include Convera, Delphes, and Entopia. TeraText retreated to the government sector. IBM abandoned its in house search technology and just adopted Lucene, an open source toolkit. Other vendors remained essentially invisible like Albert, dtSearch, Lextek, and EPI Thunderstone, among others. Exalead disappeared into an engineering firm that is struggling with its core business.

Autonomy, like it or not, emerged after 15 years as the major brand in search, content processing, and a number of closely related fields.

Despite the changes in the search sector and in Autonomy’s technology line up, Autonomy delivered one product—IDOL, the integrated data operating layer, and its DRE, the digital reasoning engine. One product name persisted for 15 years. One technology, the DRE, powered the famous “black box” at the heart of every autonomy product or service when developed in house or acquired. Once Autonomy bought a company, it IDOLized the product or service.

I read “HP Breaks Autonomy IDOL into Discrete Services.” The write up smacks of the “real journalism” from the azure chip outfit IDC. The story reported in cheerleader fashion:

The service will expose most of the IDOL features as discrete services, accessible through APIs (application programming interfaces). HP is hoping that enterprise developers use the service to embed IDOL functionality into their own applications.

At first glance, this is no big deal. Exalead was moving in this direction before it was purchased by Dassault. Elasticsearch offers a compelling open source and lower cost alternative as well.

In my view, HP has a big job ahead of it. The company has to generate enough revenue from Autonomy licenses to pay back its purchase price, now deeply discounted to several billion dollars. Considering that it took Autonomy 15 years to nose toward $900 million, the HP sales professionals have to get in gear. After all, HP needs to turn Autonomy into a net producer of revenue and profit.

In addition, HP has to make certain that its deconstruction of IDOL does not lose the famous Autonomy magic. Without magic, I am not confident that 1996 technology can cope with the challenges of today’s information processing needs. (Google is also a late 1990s company faced with similar problems of ageing technology and concepts.) Good enough search is available from open source repositories. Lower cost options are available from upstarts like Elasticsearch and Searchdaimon. Once the magic is gone, magic is tough to recapture.

HP has to find a way to make Autonomy’s services usable to those customers who want to download and app and have it work. Autonomy reaches back to the 1990s. Today’s information technology professionals are into a different type of computing experience. Of course, there are organizations that have the money, time, and appetite to tackle Bayesian methods infused with Monte Carlo and Markov Chain methods, seasoned with Laplacian techniques. My hunch is that complexity has the potential to add friction to the chopped up mini-IDOLs and DREs.

Net net: HP has to find a way to make big money flow in a market which is coveted by IBM Watson, Microsoft, and numerous other vendors.

Would Michael Lynch have chopped up IDOL? I don’t think he will be available to answer this question. The squabble about HP’s purchase price generate considerable noise at a time when HP needs focus, clarity, and numerous sales.

Worth watching.

Stephen E Arnold, March 12, 2014


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