Harsh View on Autonomy
December 24, 2012
HP, one of the big names in printing, received bad news in late November when they became aware that spending billions of dollars on Autonomy was an $11 billion dollar mistake. Tech Eye reported on the Hip’s blunder in “Autonomy Was Practically Vaporware.” According to the article, when HP began to inspect their new acquisition the company noticed that Autonomy’s leading software was not as advertised and had to be given away free to customers. Meg Whitman, HP’s CEO, accused Autonomy of misrepresenting their software and used accounting tricks to hide the truth.
HP bought Autonomy in a move to leave the PC world behind and concentrate on developing software, like SAP. Autonomy’s flagship IDOL is nothing more than a search engine. IDOL along with other software would be bolted onto customers’ existing systems and Autonomy would tell them they would have to pay more money for the “upgrades.” It was a trick that worked for a while, but HP caught on.
“So why on earth didn’t HP spot this lemon when it bought it? HP has accused former managers of ‘a willful effort’ to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers. These misrepresentations and lack of disclosure severely impacted HP management’s ability to fairly value Autonomy at the time of the deal, the company said. Even calling customers would not have uncovered the problem. Many of them are embarrassed to admit they spent $10 million on software that doesn’t actually work, one HP insider said.”
Oops! Embarrassed is right. It is one thing to admit you broke a window and another to say you lost $11 billion. HP is going to have an even harder time digging itself out of financial ruin now.
Whitney Grace, December 24, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
IBM: Buying Big Data Capability or Customers?
December 21, 2012
I just learned that IBM is duplicating its Big Data “capability.” Actually, since IBM has more Big Data capabilities than I have goose feathers, IBM is probably buying customers. Navigate to “IBM to Acquire StoredIQ in Big Data Play.” This “real news” story reported:
In plain terms, IBM wants to help businesses figure out which data is important in the short- and long-term so that it’s easier to find valuable data (and easier to eliminate unneeded data). Aside from being a good business practice — you don’t really want to keep every bit and byte, do you? — it also helps cut down on all the hardware necessary to store that information.
Okay, but doesn’t IBM already own that Big Data powerhouse Vivisimo? Doesn’t IBM own the DB2 data management system? Doesn’t IBM already own WebFountain, CLEVER, and dozens of other text processing methods? Doesn’t IBM already own iPhrase, SPSS Clementine, and the really zippy STAIRS III code base?
IBM is buying companies, slapping on the Big Data label, and then taking a close look at the customer lists. Why? IBM knows it is tough to make a Big Data sale in today’s fluid market. My view is that it is easier to buy existing customers, do the upsell thing, and move on. “Real news” outfits see “Big Data” and don’t poke into other “value” elements of the company.
Does IBM know what it owns? My dear, departed mother bought multiple pairs of black shoes. She could tell the pairs apart. I was clueless.
Just my opinion. Honk.
Stephen E Arnold, December 21, 2012
Lynch of Autonomy Fires Back at HP
December 19, 2012
In writing off $8.8 billion of last year’s $11.1 billion purchase of Autonomy, Hewlett-Packard has leveled some serious accusations against the formerly independent British software company. Autonomy’s founder, Mike Lynch, speaks up and reviews British accounting rules for the HP management team in a pair of recent articles: in the Guardian’s piece, “Hewlett-Packards Autonomy Claims Inconceivable, says Mike Lynch,” and in “Autonomy Founder: Hewlett-Packard Having Trouble with Math” at Mercury News.
HP claims that a whopping $5 million of its write-off is due to “accounting improprieties” by Autonomy’s management team. These articles explain that at least some of the problems might be due to the different sets of accounting rules proscribed on each side of the Atlantic, and each article covers a few of the details. Mercury News’ Anjuli Davies writes:
“Accounting rule setters have been working on plans for a decade for common global accounting rules so regulators and investors can compare company accounts, but until that task is complete, there are competing standards that can produce different results for companies doing broadly the same thing.
The International Accounting Standards Board has devised International Financial Reporting Standards, used in more than 100 countries, and the basis for Autonomy’s accounts prior to HP’s acquisition.
But many U.S. companies such as HP use U.S. Generally Accepted Accounting Principles, which can differ from IFRS, notably in respect of software revenue recognition.”
So, is it just a big misunderstanding? Lynch doesn’t seem to think so; The Guardian’s Juliette Garside quotes him declaring:
“[HP has] had to do a very big writedown and they tried to blame it on the accounting but obviously something else is going on. People realise I’m certainly not going to be used as HP’s scapegoat when it’s got itself in a mess.”
Is Lynch speaking out of defensiveness or appropriate righteous indignation? Without a lot more details, it is hard to say. What is clear is that Lynch is not the sort to sit by while someone attempts to tarnish his, and his associates’, good names.
Cynthia Murrell, December 19, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Coveo and Sitecore Combine
December 19, 2012
MarketWire hosts a very interesting announcement: “Coveo and Sitecore Offer a More Personalized, Relevant Approach to Enterprise Search.” It sounds a lot like what you would get if you combined Endeca and Vivisimo. The press release tells us:
“Coveo integrates seamlessly with Sitecore’s Customer Engagement Platform to provide the extensibility and scalability to enable more personalized website searches. Coveo accomplishes this by enabling unified information access from an unlimited number of disparate data sources, directly within an organization’s website, as well as UI configurability and other advanced search and navigation functionalities. . . . Using Coveo and Sitecore to power customer self-service sites enables customers to solve even complex challenges online, reducing customer support costs and increasing customer satisfaction and loyalty.”
Coveo taps into meta-data to bring contextually-relevant, faceted search to Sitecore’s platform. The companies are renewing the partnership after successfully pursuing a number of joint projects. Sitecore’s Amar Patel praised Coveo’s ability to deliver relevance; J.P. Provencal of Coveo admires Sitecore’s passion for innovation.
Sitecore combines web content management with customer intelligence in their Customer Engagement Platform. Sitecore serves several big-name companies, like American Express, Microsoft, and Nestle. Established in 2001, the company now maintains offices around the world.
Coveo was founded in 2005 by some members of the team which developed Copernic Desktop Search. The company serves organizations large, medium, and small with solutions that aim to be agile and easy to use yet scalable, fast, and efficient.
Cynthia Murrell, December 19, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
New Idea Engineering Joins LucidWorks Team
December 14, 2012
After a successful sixteen year career providing professional consulting for roadmapping and best practices in all aspects of search, New Idea Engineering has become part of the LucidWorks team, effective December 1, 2012. The New Idea Engineering blog focuses on engaging readers with all aspects of the enterprise search world.
Read the founders’ remarks to his followers as to why the company has decided to join forces with LucidWorks in, “Why LucidWorks? And Why Now?”
They conclude:
“A few years back, Lucid Imagination was started to provide that support, along with training and an easy to use interface that lets business owners – not just developers – use Solr search. We’ve called them “the RedHat of Open Source Search”. Now, Lucid Imagination has become LucidWorks, and it is set to be the best way to search web, file, and database content, with extreme control, and of course with big data. A few months ago we spoke with Lucid CEO Paul Doscher about upping our contract with them, and about where they were going, and it just made sense to us at that time to join a bigger team.”
LucidWorks is a great team to join, a company that will continue to have something important to say about the enterprise search landscape for many years to come. New Idea Engineering is no doubt another way that LucidWorks is strengthening all they have to offer.
Emily Rae Aldridge, December 14, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Autonomy: The Canny Farmer Dell Does Not Buy a Pig in a Poke
December 11, 2012
Information about Hewlett Packard’s amazing judgment continues to surface. I just read “Dell Founder ‘Turned Down Autonomy’.” I assume the write up is accurate. If so, the key point is that a sales type was “shopping.” Autonomy. According to the article: [Michael Dell] “rejected the British software firm because it was “overwhelmingly obvious” that it was overpriced.”
The “overwhelming obvious” caught my attention. But here is the important bit:
His comments raise fresh questions over HP’s decision to pay $10bn (£6.3bn) for Autonomy last year – a 59pc premium to its market value at the time – and its subsequent claim that it only overpaid because the British company had cooked its books.
Oracle thought Autonomy was too expensive. Dell thought it was too expensive. HP thought that the price was right. What aspect of Autonomy’s financials looked so juicy to HP and so unappetizing to two other companies?
My hunch is that Autonomy prepared one set of numbers and a presentation. Dell and Oracle did not buy the pitch or the numbers. HP decided the pitch and the numbers were okay.
Was Autonomy’s sales rep creating different deal books for each company? I doubt that happened but I suppose it could have put in the extra work. A more practical view is that HP did its analysis and made a decision. Now HP wants to get out of its deal.
The question, “Why was HP unable to see what Dell and Oracle saw straight away?” Obviously no Swedish Nobel prize winner was involved.
Stephen E Arnold, December 11, 2012
Explanation of the RightNow Deal
November 16, 2012
The Stock Blog posts its perspective on Oracle’s purchase of RightNow Technologies in “Oracle’s RightNow Bid could Breed More SaaS M&A.” The brief write up explains:
“Companies in the software-as-a-service business were higher on speculation that Oracle‘s acquisition of RightNow announced Monday means more M&A [mergers and acquisitions]in the industry.
“Oracle (ORCL) said it would pay $43 per share, which amounts to an enterprise-value-to-revenue multiple of 5.5x compared to a 4.5x average multiple for a basket of SaaS companies, according to FBR Capital Markets. FBR says Oracle’s diversified software and hardware portfolio ‘positions the company well to weather the uncertain economic climate. We believe Oracle’s engineered systems (Exadata and Exalogic) strategy, coupled with Fusion Applications, should allow the company to take market share from its rivals, namely IBM, Hewlett-Packard, and SAP. We reiterate our Outperform rating and $38 price target.'”
Interesting. The piece goes on to note some other players in the Software as a Service and customer service markets. It also mentions that RightNow’s earnings look healthy. Well, that’s good.
But what about RightNow’s natural language processing? We want to know what Oracle ultimately plans to do with the technology behind RightNow CX, the company’s cloud-hosted customer experience suite. Currently, information about the product is available here, at Oracle’s site. RightNow was founded in 1997, and is headquartered in Bozeman, Montana.
Cynthia Murrell, November 16, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Motorola Restructuring Proves to be More Complex Than Anticipated
October 29, 2012
The Inquirer recently published a piece that leads us to believe Motorola is a stickier wicket than Google predicted, called “Google Revises Cost of Motorola Mobility Restructuring.”
According to the article, after Google’s initial acquisition of Motorola, the restructuring has proved to be more costly and difficult than initially anticipated. One example of this is the fact that the search giant planned to cut Motorola’s workforce by 20 percent. However, after examining figures for severance charges, the number has been changed to 9 percent.
The article states:
“Motorola was bought for its considerable patent portfolio, with Google hoping that the 16,000 or so patents will help it fend off potential patent lawsuits by other firms like Apple and Microsoft. However Google bought not only 16,000 patents but also a company that was far from being the mobile phone market leader, with financials to match its lacklustre products.
Google said in a statement to Reuters, ‘Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the US.’”
We are still unsure of Google’s true motivations for buying Motorola. Whether it was patent related or hardware, Google’s next Nexus design should bring some clarity to the issue.
Jasmine Ashton, October 29, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
OpenText Insights as Company Shifts to Content Discovery
October 6, 2012
Some insights into OpenText were brought to my attention in the recent article, “What’s Next for OpenText As It Continues Integration of Nstein’s Technologies?” on SemanticWeb. The enterprise information management solution owns several search and content processing systems, including Nstein which the company acquired in 2010.
In the time since the acquisition, the company has been working on building Nstein’s semantic technology for text mining and analytics into OpenText’s enterprise content management platform. This has included the addition of a cloud Web site search and content discovery solution, Semantic Navigation, to the company’s existing Web content management products.
The article tells us more about the upcoming plans for the acquisition:
“Some highlights moving forward are taking entity extraction and normalization to the space of collecting, analyzing, and finding business trends that emerge across enterprise’s vast collections of documents, sources and repositories — and also going beyond extracting and categorizing named entities and sentiment from text documents to apply semantics to other media, such as photos, videos and other unstructured information.”
As the company moves forward, we are anxious to see the continued development in the area of semantics and content analysis. We doubt the company will become a major player in the field, but we will keep an eye on performance numbers as OpenText redesigns and progresses.
Andrea Hayden, October 06, 2012
Sponsored by ArnoldIT.com, developer of Augmentext.
Endeca Brings Enhanced BI Capabilities to Oracle
October 5, 2012
Oracle’s acquisition of Endeca in October of last year brings the promise of enhanced business intelligence capabilities to the expanding business IT company. According to the post titled “What Endeca Adds to the Oracle BI Bag of Tools” on The Emtec Blog, Oracle will now be equipped to handle unstructured data such as social media and text files and has begun to change Endeca into a reporting engine for social media and other similar text source systems.
We learn about the new capabilities in the article:
“Endeca enables users to iteratively model the data as it suits them. IT does not have to perform traditional data modeling on the data before it can be available for end users. Endeca combines structured and unstructured data from disparate systems (inside or outside the company) and automatically organizes the information for search, discovery and analysis. This makes Oracle Endeca the only BI technology that unifies structured content and social media for analysis.”
The integration may prove a bit difficult for Oracle because of the power of Endeca’s unstructured data search capabilities, but will likely be a very wise move for the corporation. We can already see the company’s BI capabilities expanding and believe Endeca is a great addition to Oracle’s BI framework.
Andrea Hayden, October 05, 2012
Sponsored by ArnoldIT.com, developer of Augmentext.
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