The Guardian Explores HP Autonomy
August 16, 2014
I read “Hewlett-Packard Allegations: Autonomy Founder Mike Lynch Tries to Clear Name.” The British “real” newspaper focuses on Mike Lynch, the founder of Autonomy. I am convinced that Autonomy pitched the value of its company to a number of firms. I know that Hewlett Packard bought Autonomy. I assume that spending $11 billion was not a K Mart blue light special impulse purchase. I know that HP has had what the MBAs call “governance challenges.” These range from allegations of getting frisky with folks to management churn. I know that for me, the HP of electronic devices yielded to the HP of the ink cartridges.
Here’s a point I highlighted in the Guardian’s write up:
Meanwhile, lawyers on all sides are using legal privilege to sling mud. Lynch says it is not only his name that has been stained, but that of the British technology industry. Autonomy’s accounting and marketing methods had attracted criticism before the HP acquisition, but Lynch was also a poster child for the achievements of Cambridge’s Silicon Fen. The Autonomy affair casts a shadow, and a conclusion from the SFO is overdue.
I have a slightly different view of the dust up. Folks want to believe that information retrieval will generate another Google. Because of those expectations, executives whose expertise in search extends to running a Google search on a mobile device assume they know about content processing.
When buyers get excited about a purchase, some people buy Bugatti Veyrons and spring for gold iPhones. Others snap up search companies and expect the money to roll in like the oohs and aahs at the golf club when the Veyron rolls up.
Wrong. The dust up between HP and Autonomy is an illustration of what happens when folks without too much understanding of content processing’s complexities covet a home run. The impact does affect Mike Lynch, a Cambridge PhD and real live inventor.
The collateral damage is on the buyers of search companies who toss millions at a sector without understanding how difficult it is to create a search company that is not selling ads or living exclusively on Department of Defense largesse.
HP bought a company with a strong brand, customers, and technology that when properly resourced works. HP did not buy a Google scale money stream, a Palantir clinging to the US government, or a break even metasearch system.
The impact on the reputation of Autonomy professionals is significant. What does this dispute do to other search and content processing companies? Search is tough enough without having a megaton dispute played out in the datasphere.
HP did not have to buy Autonomy. Microsoft passed. Oracle passed. HP bought. HP had time and resources to dig through Autonomy. If it did not, then HP created its own problem. If it did, HP created its own problem. Autonomy, with 15 years of history, was looking for a buyer. My hunch is that HP was looking for a Google and bought a different business because HP convinced itself it could generate more money than Autonomy could. HP found out that it could not match Autonomy’s revenues. Whom does any self respecting MBA or lawyer blame? The other guy.
This hassle says much about HP. Sadly it affects other search and content processing companies as well.
Stephen E Arnold, August 16, 2014
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The Guardian Explores HP Autonomy : Stephen E. Arnold @ Beyond Search