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Quote to Note: HP Comments on Dell EMC Deal

October 13, 2015

HP Enterprise’s Whitman Pans Dell’s EMC Purchase over Debt” reproduced a memorandum allegedly written by Hewlett Packard’s big dog. I highlighted one passage as a keeper. Here it is:

…this [Dell paying $67 billion for EMC] is a good thing for Hewlett Packard Enterprise and an opportunity for us to seize the moment. This is validation for the strategy that we have laid out and I am not surprised that others would try to emulate it.

Yes, HP’s strategy is something that Dell is emulating. The flaw in Dell’s “validation” is that it did not purchase a search and retrieval company. Now the Dell plan is one that may work out. On the other hand, it may work out only for those involved in the financial and legal activities.

How many other companies will be emulating HP’s strategies? Show of hands, please. Anyone?

Stephen E Arnold, October 13, 2015

Hewlett Packard a Lightning Rod in Disclosure Only Settlements

October 11, 2015

Ah, Hewlett Packard. A source of interesting news is the company. I read “Judge Rejects HP Settlement of Shareholders’ Suit over Aruba Merger.” I think it is my perception at work. When I think about HP, the word that comes to mind is litigation. The Autonomy dust up is difficult for me to block. Years ago, I think there were some Board of Directors’ pranks and then there was the thrill of the Digital Equipment acquisition. Ah, AltaVista. More memories.

In this article I learned:

The lawsuit stemmed from H-P’s $2.7 billion purchase of Aruba Networks. It was brought on behalf of Aruba shareholders, but Vice Chancellor J. Travis Laster said the proposed settlement offered them little of value. The agreement called for H-P to disclose additional information about the sale process and pay the plaintiffs’ lawyers a fee of $387,500. Such so-called disclosure-only settlements, in which the only money paid goes to lawyers who bring the suits, are now the norm in the litigation that follows nearly every corporate merger.

I think the idea is that not much productive comes from these deals. HP now has an opportunity to embiggen opportunities for various legal eagles.

HP and its acquisition methods appear to be where the action is at company these days. What about technology? What about Autonomy’s DRE and IDOL systems? I don’t hear too much.

Stephen E Arnold, October 11, 2015

Restlet Promotes Paul Doscher to the Cloud

October 8, 2015

What has Paul Doscher been up to?  We used to follow him when he was a senior executive over at LucidWorks, but he has changed companies and is now riding on clouds.  PRWeb published the press release “Restlet Appoints Paul Doscher As New CEO To Accelerate Deployment Of Most Comprehensive Cloud-Based API Platform.”  Doscher is the brand new president, CEO, and board member at Restlet, leading creators of deployed APIs framework.  Along with LucidWorks, Doscher held executive roles at VMware, Oracle, Exalead, and BusinessObjects.

Restlet hot its start as an open source project by Jerome Louvel.  Doscher will be replacing Louvel as the CEO and is quite pleased about handing over the reins to his successor:

“ ‘I’m extremely pleased that we have someone with Paul’s experience to grow Restlet’s leadership position in API platforms,’ said Louvel. ‘Restlet has the most complete API cloud platform in the industry and our ease of use makes it the best choice for businesses of any size to publish and consume data and services as APIs. Paul will help Restlet to scale so we can help more businesses use APIs to handle the exploding number of devices, applications and use cases that need to be supported in today’s digital economy.’ ”

Doscher wants to break down the barriers for cloud adoption and take it to the next level.  His first task as the new CEO will be implementing the API testing tools vendor DHC and using it to enhance Restlet’s API Platform.

Restlet is ecstatic to have Doscher on board and Louvel is probably heading off to a happy retirement.

Whitney Grace, October 8, 2015
Sponsored by, publisher of the CyberOSINT monograph

Autonomy Founder Sues HP: Sticks and Stones Truism Incorrect

October 2, 2015


As the weekend hurtles toward me, it is time for another chapter of the HP Autonomy saga to become available. I read “The Ex-CEO of the Company HP Disastrously Bought for $11 Billion Is Now Suing HP for $150 Million.”

I assume the information is accurate. As I understand Michael Lynch’s effort to sue HP for money. Also, Autonomy’s CEO may want HP professionals to stop trashing Michael Lynch.

Readers of this blog know that I am skeptical of HP’s handling of the Autonomy matter. Yep, before hitting the beach of the lake filled with mine drainage, I actually did some work for the DRE/IDOL inventor. The experience was pretty positive, organized, and professional.

Why did HP which paid $11 billion for Autonomy find the deal unappetizing?

Spending $11 billion for a company and then wanting the money back may work when complaining about the food at the Harrod’s Creek, Kentucky, burger joint.

Those rural Kentucky treats cost $3.50. Overpriced? You bet. But people choose to go to the restaurant. People choose what to order.

But Autonomy is not a hamburger and the idea that seller, like the dive down the hollow, will a refund may not apply to a multi billion dollar rump roast.

I learned this about Michael Lynch’s legal move:

Lynch and team also maintain that “Autonomy was the victim of political infighting within HP” and that at one point,  according to emails, HP’s head of human resources gave him a toy shield “in order to fend off all the attacks.”

Another point I noticed is this professional and well intentioned comment from the article:

An HP spokesperson told us: “Mike Lynch’s lawsuit is a laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation. HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court.”

But the write up contained this statement attributed to Michael Lynch. This is a great description of MBAs and wizards who disagree among themselves:

Evidence shows that at the time of the acquisition, HP was in chaos. Before going ahead with the acquisition they discussed firing their CEO. They then tried to abort the deal after closing, ultimately did fire the CEO, and generally fought amongst themselves like cats in a sack, causing Autonomy to disintegrate.

Apt. Cats in a sack. The HP senior managers warrant a question: Alley cats or jungle cats?

Stephen E Arnold, October 2, 2015

Not Hacking, but Trickery, Lost Bitpay Almost $2 Million

September 30, 2015

The article titled How a Clever Hacker Tricked a Major Bitcoin Company Out of $1.8 Million on Motherboard shines a light on the manipulation of BitPay,a Bitcoin payment service, by a clever hacker. Apparently the attacker sent an email from BTC Media CEO David Bailey’s computer to a BitPay CFO requesting his corporate email information, which he readily supplied because the two companies were already in talks about a potential partnership. The article clarifies,

“The insurance claim on the lost funds was denied because BitPay’s computers were never hacked—instead, they just gave away their email passwords in what appears to be a classic phishing scam. Phishing is when an attacker send a scammy email in the hopes that the victim is not savvy enough to trash it immediately. …Several months after the hack, BitPay was reportedly processing more than $1 million in payments every day.”

The hacker continued using Bitpay’s executive accounts to request funds, all of which were apparently granted until an employee of the transaction software company, SecondMarket, was notified. The article and court case emphasize that this was not a hacking scenario, just a $1.8 Million phishing scam that people using Craigslist for job searches avoid every day.
Chelsea Kerwin, September 30, 2015

Sponsored by, publisher of the CyberOSINT monograph


National Geographic Sells Out 

September 30, 2015

The National Geographic Society is one of the most respected institutes in regards to science and journalism related to nature.  For 127 years, National Geographic managed itself as a non-profit organization.  Buzzfeed reports that 21st Century Fox purchased National Geographic in the article, “Rupert Murdoch Is Buying National Geographic.”  Before you start getting upset that National Geographic has “sold out” in the same manner that Sesame Street has a new partnership with HBO, be aware that 21st Century Fox already owned and operated a joint-venture partnership with the company.

The bulk of National Geographic’s properties are being turned over to 21st Century Fox, who will manage them and allow the National Geographic Society to focus on:

“The National Geographic Society said the deal will let the foundation invest more money in sponsoring explorers and scientists. ‘The value generated by this transaction, including the consistent and attractive revenue stream that National Geographic Partners will deliver, ensures that we will have greater resources for this work, which includes our grant making programs,’ said CEO Gary Knell, in a statement.”

While National Geographic is still popular, it faces stiff competition from other news outlets that generate similar if not more content.  National Geographic wants to have better, modern storytelling “so that we may all know more of the world upon which we live.”

Hopefully this will free up more monies for scientific research, endeavors to protect endangered species, educational programs, and better ways to educate people on the natural world.


Whitney Grace, September 30, 2015
Sponsored by, publisher of the CyberOSINT monograph

The Nikkei Financial Times Deal: Journalism and Quality

September 29, 2015

I read a Harry Quebert type article this morning called with typical big time journalism understatement “The Financial Times and the Future of Journalism.”

Yep, the future. Of journalism.

The set up is an interview which has been converted to a chatty, informed narrative with commentrary from the person asking the questions (a New Yorker “contributor”, which I think means contract worker) and statements from a full-time equivalent at the Financial Times, a salmon colored newspaper consumed by  750,000 quality-centric readers.

The quotes in this blog post come from the CEO of the Financial Times which sold to Nikkei, a Japanese outfit for 40 times the FT’s 2014 revenues. So $37 million netted Pearson, the former owner of the FT, about $1.4 billion. Like the HP purchase of Autonomy, I will be interested to see how the purchase plays out. Obviously Pearson was neither willing nor able to put the FT on a pedestal of cash. The former owner of Madame Tussaud’s wax museum sold the newspaper. Let Nikkei realize the long term benefits of FT ownership I assume.

The write up by the New Yorker magazine, which has pretty good cartoons, is a darned interesting journalistic artifact itself. But I want to focus on some of the statements in the write up, allegedly made by the FT CEO who played a big part in the deal with the Japanese buyer.

I noted this statement:

Nikkei wanted to prepare for the transition to digital, which has been slow in its home market.

My recollection may be fuzzy, but I thought that the Japanese were exploring the digital world, databases, and all sorts of software based activities in Japan’s Fifth Generation Project in the early 1990s. Hey, that was like yesterday in traditional print publishing.

The FT executive allegedly said to the reporter:

I think if you were to summarize the vision that we both share, it would be about growth. We both think there is a very good growth opportunity for the F.T. That requires a long-term perspective. It requires investment. They have committed to that. And for a news organization like the F.T. right now, that’s music to one’s ears, frankly.”

I like the long term growth perspective. Apparently Pearson was not on board with this concept about investment without significant payoff. As a result, Pearson shopped the FT and netted a nine figure payout.

Why did Pearson opt to sell and not pump cash into the FT? Here’s the explanation from the FT executive:

What is lacking is some fuel in the tank and the ability to spread our wings a bit.”

Pearson apparently lacked “fuel”. I wonder if the “fuel” is patience, money, financial resources, or wisdom. The billion dollar deal looked pretty snappy to me. Imagine. More than one billion for a newspaper. That’s the color of money.

Apparently the FT boss perceives those from the Far East—that is, beyond Dover—as adopting Adam Carolla’s “In 50 Years We’ll All Be Chicks” approach. None of this City and Wall Street aggressiveness toward revenues and profits. Here’s a passage I highlighted in green, the color of money:

But Japanese newspapers, including the ones owned by Nikkei, are also known for taking a less aggressive stance toward news than many of their Western counterparts.

Will the FT remain independent as other newspapers and real journalistic endeavors do the inclusion, sponsored content, advertising thing? According to the FT executive:

“Editorial independence is absolutely fundamental to the way we operate,” he replied.

He allegedly added:

But I think the most important thing is they understand our values and editorial independence. I’m not going to tell them how to run Nikkei, and they are not going to tell us how to do editorial independence at the F.T. They are very clear about that.

I like that understanding. The owner will not assert control over something the person owns. Shared values among the quality journalists effervesce from this factoid.

The most important passage concerns the FT business model. Here’s the explanation of the FT’s “vindicated”, super-charged approach to generating at some time in the future oodles of dough from a global market of discerning news consumers:

The replacement was cheap trial subscriptions. If you go to the F.T.’s Web site today and try to read a story, you will be prompted to take out a month-long subscription for a dollar….“We are now able to measure, optimize, and track all of these readers and changes with real insight that we could never do before. It sounds dry, but it’s not. It’s really understanding readers, what matters to them. We are never going to edit by numbers, but we are going to inform all of our decisions around data.”

Not only that, the FT is going back to the model for the newspapers which have become pedestal mounted historical artifacts. Newspapers are back as the “trusted” folks in the information business. I know that I trusted newspapers until I read about US diplomacy and yellow journalist in the period from 1895 to 1898.

“Precisely because of digital disruption, precisely because there is so much information and news and information out there, the value of a trusted guide, the value of a trusted brand” has gone up, he said.

Yep, those families losing sons in the dust up among the US, Spain, and Cuba understand that trust stuff.

Then there is a statement which seems to bring the future payday for the new owner of the FT tantalizingly near:

But we fundamentally believed that if it’s quality journalism, people will pay for it. That’s been vindicated.”

From my point of view, what’s been vindicated is that there was a buyer willing to pony up more than $1 billion for a brand, several hundred thousand readers, and a Web site offering a  $1.00 trial subscription. I assume that is the definition of vindication from Pearson’s point of view. I am not sure about Nikkei’s point of view. If the FT’s senior management had an agreement with Pearson designed to keep the FT’s senior management on board, was some of the money shared with the FT leadership? Good question.

I also highlighted in red ink red, not money green, this statement attributed to the FT executive:

But he also said insisted that things are changing in journalism and that the business climate is improving. “There is a belief in journalism,” he said.

Stepping back I thought about the New Yorker’s analysis of the FT deal. Much of the verbiage could be used to describe how the New Yorker feels about its approach to news and information.

I asked myself, “Is this article about the FT or is it about the New Yorker’s perception of quality journalism?” Another good question.

And what about search. Does anyone recall the Endeca FT Newssift project? I do. Moving on.

Stephen E Arnold, September 29, 2015

The HP Autonomy Enterprise Search Epic Continues

September 26, 2015

I don’t play baseball anymore. I did. I was okay, but one of the fellows who lived in my neighborhood in central Illinois played very well. He played everyday. After a stellar high school career, he became a fielder in the major leagues. The pressure was too much. He made bad decisions. He tried to claw back to the starting rotation. Instead of swinging with the relaxed, fluid motion I recalled from our days of playing together, he tried to hit a home run every time at bat. His confidence dwindled away, and he became a person who did not perform. Last I heard, he had fallen victim to his inner demons and was searching for a panacea. But, in my opinion, he struck out. Bad management.

Definition of panacea:

noun 1. a remedy for all disease or ills; cure-all. 2. an answer or solution for all problems or difficulties:

I thought about this person when I read “Deal Divided H-P Leaders” in the September 26, 2015, Wall Street Journal. You may need to pay to access this article which is available at as “Hewlett Packard’s Then Chairman Ray Lane Tried to Quash Autonomy Acquisition.”

The main point of the write up is that HP wanted a panacea, and the senior management of HP thought Autonomy, a search and content processing company, was the answer to HP’s revenue challenges.

The Wall Street Journal points out that the Chairman of the Board of Directors was supportive of the multi billion dollar deal and then wanted to kill the deal.

Also, the WSJ identifies what I would call a “management” problem; to wit:

HP missed other red flags in assessing the Autonomy deal. In 2013, the Journal reported that outside auditors for Autonomy had noted that an Autonomy executive had alleged improper accounting practices at the company [Autonomy]. However, HP executives briefed on the allegations hadn’t passed them along to HP’s Board or to Mr. Apotheker [president and Autonomy deal supporter].

The Wall Street Journal article includes a point I made in my 2003 analysis of Autonomy, a version of which appeared in the first edition of the Enterprise Search Report.

Revenues from software which allows employees to locate information germane to work activities has for decades faced a major hurdle; namely, making sales and keeping customers. The problem, which persists today, is that enterprise search vendors have a tough time making basic key word search command the type of license fees and corporate commitment which enterprise resource planning, accounting, and compliance-related systems demand.

Enterprise search vendors have, again for decades, explained that search and retrieval was something more than finding a needed document. The buzzwords used for decades invoke “knowledge management,” “business intelligence,” and “customer support.” Each of these is baloney, but enterprise search vendors trapped. Making search work in the fast changing content environments in which organization operate was a tough technical problem. The costs of engineering fixes was uncontrollable, and, not surprisingly, enterprise search vendors layered on additional functions in an effort to make sales, charge more, and stay in business.

Autonomy, along with IBM and OpenText, were firms which grew search via acquisition. Autonomy was perhaps the most successful of the roll up tacticians. The firm acquired Verity, a system which dated from the 1980s and added it to Autonomy’s earlier video management acquisitions, document management acquisitions, and other bits and pieces accumulated since Autonomy opened for business in the late 1990s.

Each acquisition added revenue to Autonomy’s financial reports and the customers of these acquisitions became candidates for other Autonomy products. At the time of the HP purchase decision, Autonomy had about six or seven times the revenue of Endeca, another late 1990s search vendor. (Oracle bought Endeca for $1.1 billion in 2011. Other search vendors sold in the 2008 t0 2014 period traded from much lower purchase prices; for example, IBM bought Vivisimo for $20 million, a figure which was equivalent to one year Vivisimo revenues.)

HP did not, in my opinion, understand that search and retrieval was a business that broke the backs of many bright MBAs and whiz kid engineers. HP assumed that its management team would triumph in generating billions from Autonomy’s core technology. I think some of Autonomy’s innovations are important, but I know that Autonomy was able to generate six or seven times the revenue of the number two search vendor in 2011 because it managed a portfolio of content processing companies and did a pretty good job of generating revenue from lines of business ADJACENT to search and retrieval.

HP wanted the 1990s technology of Autonomy to generate billions. HP quickly learned that its view of Autonomy did not match what Autonomy’s management team built.

I am not sure how bright folks at HP could not look at the failures of Convera, Delphes, Entopia, Siderean, and other search vendors and not ask, “What’s different about search?”

HP wanted a panacea. HP demonstrates the type of problem my friend who became a major league player had and still has. In the big leagues, swinging for the fences, seeking a silver bullet, and looking for a quick fix is easy. Finding a fix for a company with problematic business models and conflicting management views is very difficult.

What does the HP experience suggest? After decades of enterprise search hyperbole, reality is different from the word picture sales professionals create in the minds of those whose desperation clouds their thinking.

My view is that HP has struck out. Bad management in my opinion.

Stephen E Arnold, September 26, 2016

Google Solves CDN Problem with New Partnerships

September 21, 2015

The article on TechCrunch titled Google Partners with Cloudflare, Fastly, Level 3 and Highwinds to Help Developers Push Google Cloud Content to Users Faster discusses Google’s recent switch from it’s own content delivery network (CDN) (formerly PageSpeed service) to partner services. This has been advanced by the CDN Interconnect launch, purportedly aimed at providing simplified and less costly space for developers who use the cloud service for running applications. The article elucidates,

“Developers who use a CDN Interconnect partner to serve their content — and that’s mostly static assets like photos, music and video — are now eligible to pay a reduced rate for egress traffic to these CDN locations. Google says the idea here is to “encourage the best practice of regularly distributing content originating from Cloud Platform out to the edge close to your end-users. Google provides a private, high-performance link between Cloud Platform and the CDN providers we work with..”

So we see Google doing the partner thing. Going it alone may be lonely and expensive. The article mentions that the importance of CDNs will only grow with the weight of web pages, which are so often plied with high-res images and HD video. So long as Google can’t solve this problem itself, they are happy to partner up with providers.

Chelsea Kerwin, September 21, 2015

Sponsored by, publisher of the CyberOSINT monograph

Hewlett Packard Autonomy: Bank Issues Alleged

September 15, 2015

The Price of Silence on Wall Street” provides a bit of information about the role of intermediaries in the HP deal for Autonomy. I find it difficult to figure out if the bank was doing its normal sales job for a juicy deal or if the bank was doing some fancy dancing.

Here are portions of the write up I highlighted when I was out of Internet range in a far off land. There is some value to printing online article for offline reading.

Item 1:

He [a bank whistle blower] says he believes people need to know about certain acts related to Barclays’ role in Hewlett-Packard’s $11.1 billion acquisition of Autonomy, a British software company, in 2011. Barclays was a financial adviser to HP on the deal and the sole provider of a one-year, $8.3 billion loan to be used, in part, by HP to buy Autonomy. Since then, the Autonomy acquisition has generally been viewed as a disaster. In 2012, HP wrote down the value of Autonomy by $8.8 billion, and said that some $5 billion of it stemmed from a willful misrepresentation by Autonomy’s management of the company’s financial performance (Autonomy’s management disagreed, and the two sides headed to court).

Item 2:

Mr. Sivere [bank whistle blower] says he believes there is more to the HP story, in particular that Barclays may have breached its internal ethical walls regarding the deal, allowing some confidential information from the banking side of Barclays to be used by Barclays traders. He reached this conclusion in his role as a compliance officer and after he saw internal digital correspondence between the two groups that made him nervous that the wall had been breached. In 2013, Mr. Sivere tells me, he filed an internal report at Barclays that questioned the ethics and legality of what he had witnessed. He reported his concern that confidentiality had been breached around certain foreign-exchange trades; around so-called Contracts for Difference trades, known as C.F.D.s; and around certain representations that Barclays had made to HP when it provided the $8.8 billion loan.

Item 3:

Mr. Sivere wrote in his letter to the Barclays board, he also believed that Barclays entered into certain suspicious derivative transactions with HP at the time of the Autonomy acquisition. “Some of these transactions included FX trades, a dollar/sterling option and C.F.D.s traded prior to the announcement (and also the bridge loan pegged to a possible manipulated Libor rate),” he wrote. “The unwinding of such derivative transactions most likely occurred during 2012 which should have raised suspicions of what exactly the Hewlett-Packard write-down was related to if not for Autonomy’s purported accounting improprieties, misrepresentations and disclosure failures.

The article includes other interesting information. I urge you to read it.

My view is that the HP Autonomy deal remains interesting to me. The amount HP paid for Autonomy set a high water mark for a content processing acquisition. This write up suggests that there is information about the deal which has not been revealed in publicly accessible articles.

The parallels with the Fast Search & Transfer matter may be worth exploring.

Stephen E Arnold, September 15, 2015

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