HP Autonomy: A Mysterious Action
August 19, 2014
I just read “The Mysterious Case of Hewlett-Packard’s Autonomy Deal.” The HP and Autonomy PR professionals have some work to do. Heck, search and content processing vendors have some work to do. The unflagging interest in the purchase of the largest enterprise search and content processing vendor (Autonomy) by one of the largest sources of printer ink (Hewlett Packard) is drawing attention to the risks associated with information retrieval.
The write up from Therese Poletti’s Tech Tales is an example of how a utility function like search is sporting a black eye, a chipped tooth, and a broken nose. Ugly.
The mystery, as I understand the article, concerns writing down “almost $9 billion of its $11.1 billion acquisition of the British software company, Autonomy Corp.” The article reports:
one of the law firms that represented the shareholders in their case against H-P directors, Cotchett, Pitre & McCarthy LLP, now working with H-P, is being accused of a conflict of interest. Cotchett was previously the lead counsel in another class action against H-P. That suit, which also recently settled, alleged that the company’s inkjet printers falsely warned consumers when they were out of printer ink.
I savored the “falsely warned” phrase.
The article reports:
“The inkjet litigation has no bearing on the Autonomy settlement,” an H-P spokeswoman said in an email. “We believe the motion to intervene in the derivative case is just a lawyer-driven attempt to seek attorneys’ fees. It is meritless, as will be shown in court filings.”
And the mystery of the write down? The article asserts:
H-P has said that $5 billion of the write-down was due to accounting improprieties at Autonomy. But so far, the accounting problems found at Autonomy are said to be around $200 million in either hardware sales at a loss or fraudulent transactions, out of just over $1 billion in annual revenue. How this became a multi-billion-dollar write-down is a big question among investors. Perhaps these legal maneuvers will shine some light on the mystery. But it probably will be a long time before investors know what really happened.
The mystery is not yet solved. Life, it seems, does not work out like a US television crime drama. I await the next installment of “The Write-down Mystery.”
Stephen E Arnold, August 19, 2014
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One Response to “HP Autonomy: A Mysterious Action”
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Howdy! This blog post couldn’t be written any better!
Going through this post reminds me of my previous roommate!
He always kept talking about this. I most certainly will forward this article to him.
Pretty sure he’ll have a good read. Thanks for sharing!