HP, Bribes, and an Autonomy Flip
September 13, 2014
Try as I might, I cannot avoid learning about Hewlett Packard. For a $100 billion outfit, the flow of information is not overwhelmingly positive.
Earlier today, I worked through several stories. Perhaps you have absorbed their contents? If not, here’s my take.
First, several years ago I saw a document describing Autonomy’s business. The link to the “Autonomy Overview,” dated January 2011 is at http://bit.ly/1tNtn5H. The link to a second document is at http://bit.ly/1uMLmKg. (A happy quack to Oracle for keeping these useful documents online and available.) One of the most important factoids in the two documents is that there appeared with the Qatalyst Partners logo. Quatalyst is associated in my mind with Frank Quattrone, a person of interest for his financial wizardry.
The write up “Exclusive: HP Exploring Sale of Photo Sharing Service Snapfish – Source” may be off center. I did note this this statement in the write up:
Shutterfly hired Frank Quattrone’s Qatalyst Partners over the summer to find a buyer, and is expected wrap up its process in the next several weeks, people familiar with the matter have said previously.
Perhaps HP’s sale of Snapfish will demonstrate that Mr. Quattrone will be bested in this minor joust. HP’s encounter with Mr. Quattrone’s analysis of Autonomy seems to have dazzled the printer ink company to some degree.
Second, “HP Pleads Guilty to Bribery and Is Fined $108” asserts that HP fought the law and the law won. I learned:
In a statement, the US Department of Justice (DoJ) said HP Russia admitted that its executives paid bribes to officials of the Office of the Prosecutor General of the Russian Federation to win a large technology contract in 1999, and continued making illegal payments for more than a decade. “[HP] subsidiaries, co-conspirators or intermediaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash,” said DoJ deputy assistant attorney general Bruce Schwartz.
Fascinating when I put this business approach in the context of HP’s actions related to Autonomy.
Third, I read “Former Autonomy Execs Turning to Unusual Strategy in Fight with Hewlett-Packard.” The article reports that Autonomy asserts that “HP grossly overvalued their firm.” That makes sense to me. HP appears to have been bitten by the Big Data, predictive analytics and search bug. Like Ebola, the infection can lead to some challenging problems.
Also, I read “HP: We Will Eradicate the Color Grey from Our Market.” HP seems to have some folks who are selling HP products around the formal partner procedures. The article reports:
Alex Tatham, MD at HP distributor Westcoast, said he is “delighted” that HP is tackling a market that has the potential to suck profits from the authorised channel. “All vendors need to police the grey market; it is their responsibility to create as level a playing field as possible for resellers,” he told us. Some in the industry will say that the grey market is, at least, partly fuelled by the vendors themselves, whether it be leaky supply chains or the temptation to sell to brokers to make kit disappear amid slow sales.
Net net: HP is a company able to capture headlines. I wonder if Kim Kardashian’s media impact has inspired the $100 billion company?
Stephen E Arnold, September 13, 2014
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