HP Sues Autonomy…Again

August 27, 2014

We thought that HP and Autonomy had settled their differences and were moving towards building new products, but they are not. ZDNet says that “HP To Sue Former Autonomy CFP Over Bungled Acquisition Settlement.” What is HP upset about now when it comes to Autonomy? It turns out that former Autonomy chief financial officer Sushovan Hussain did not want to pony up the money HP was owed after its three lawsuits with HP were settled. The lawsuits were supposed to end the quarrels.

After HP bought Autonomy, they discovered the company was than truthful about its star product line. It was purchased for $11.7 billion, but HP had to write down $8.8 billion when they discovered the fib. Autonomy still does not want to pay for the damages and Hussain is avoiding the settlement.

“In a court filing on Monday, HP said that it was ‘ludicrous’ that he should be “permitted to intervene and challenge the substance of a settlement designed to protect the interests of the company he defrauded,” according to the Reuters news agency. But Hussain said that should a judge approve the settlement, HP would be able to ‘forever bury from disclosure the real reason for its 2012 write-down of Autonomy.’”

Here is to hoping the arguments settle soon, because it is really ruining the concept of enterprise search. Think about it, if Autonomy’s enterprise search products did not work as advertised, what is the value of other companies?

Whitney Grace, August 27, 2014
Sponsored by ArnoldIT.com, developer of Augmentext

HP Autonomy: A Twist?

August 26, 2014

I read “U.S. Judge Casts Doubt on HP-Shareholder Settlement in Autonomy Lawsuit.” The write up seems to point to another chapter in the Hewlett Packard Autonomy litigation. If the article is spot on, I learned:

U.S. District Judge Charles Breyer said the settlement contained a “potentially fatal” provision, under which HP would hire shareholder attorneys to pursue claims against ex-Autonomy executives. He said that provision may prevent his approving the deal.

Assume this is correct. HP would have to go back to the drawing board with regard to a shareholder allegation about the deal. Instead of putting Autonomy on the hot seat, HP may have to deal with shareholders who see HP management as having some flaws.

Instead of reading about Mike Lynch, we would be getting some insight into what the HP board and folks like Meg Whitman were thinking about search and content processing.

My view is that enterprise information retrieval is shadowed by a somewhat gray cloud. If search is the Big Thing, the value of these systems should be evident. Instead we learn that search is a contentious issue. I am curious about the reasoning HP used to justify buying an enterprise search and content processing system that was 15 years young? Once that decision was made, what MBA magic was at work to produce the purchase price? What was Meg Whitman’s contribution to this deal when it took place?

Do other search vendors benefit from the notoriety of this search deal? My hunch is that the flailing many search vendors’ marketing demonstrates is that search is not an Emmy winning solution.

Search is easy to misunderstand and difficult to covert into a money machine. The HP Autonomy matter is a living, breathing case study of that does call attention to the challenges search presents. For those seeking cases studies about search, the HP Autonomy matter is a headliner.

The matter is a reminder that search which everyone thinks he or she understands may not be quite so simple.

Stephen E Arnold, August 26, 2014

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

Netscout Gartner Document

August 14, 2014

I learned that some folks were not able to locate the Netscout Gartner document referenced in this Diginomica article. You may want to try and get the 27 megabyte court filing at http://slidesha.re/1pPsY21.

This is definitely worth some face time. Parts evoked in me a “stop repeating yourself” but other bits were juicy indeed if true. Plus, there are some allegedly accurate factoids in the document and an illustration purporting to show the Gartner products and services. Keep in mind that this document presents only Netscout’s point of view. I find the information in the document compelling and thought provoking. For me, Netscout’s array of data seem close to reality.

If I come across the Gartner response, I will try to remember to post an item in Beyond Search. But as a former nuclear consultant who was lured into a top tier consulting company, who knows? I have my attention riveted by an IDC swizzle which allowed my content to be sold on Amazon without my permission and with another person’s name on it. Clever stuff these “experts” find to do.

I highly recommend the slide on page 27 of the Netscout legal document. I would like to include it in this short write up, but I don’t have a dog in this Netscout Gartner squabble.

Stephen E Arnold, August 14, 2014

Google Not Winning On Removing Information

July 31, 2014

Google has faced numerous lawsuits about having content removed from search results. International Business Times explains about a current battle in the UK: “Google’s Right To Be Forgotten: 70,000 Politicians, Criminals, And Individuals Want Offending Content Erased.” The European Union Court of Justice ruled in May that European citizens have the “right to be forgotten” and thusly their information removed from search results. Google’s received over 70,000 takedown requests. Google argues that it helps people keep their reputations intact and able to recover from past mistakes.

Google has removed many links related to UK media organizations. As one can imagine, users are not too happy about this, because the common belief is that once it is on the Internet it should be free to all.

Google says the opposite.

“ ‘The issues at stake here are important and difficult, but we’re committed to complying with the court’s decision,’ writes [David Drummond, Google’s chief legal officer]. ‘Indeed, it’s hard not to empathise with some of the requests that we’ve seen – from the man who asked that we do not show a news article saying that he had been questioned in connection with a crime (he’s able to demonstrate that he was never charged) to the mother who requested that we remove news articles for her daughter’s name as she had been the victim of abuse.’ “

Google’s created an advisory council to handle all request. They even post the question “How should one person’s right to be forgotten be balanced with the public’s right to know?” on the page. It is a philosophical question, but it appears to be taken on a case by case basis. How long will Google be willing to do that?

Whitney Grace, July 31, 2014

Sponsored by ArnoldIT.com, developer of Augmentext

Former Autonomy CFO Tosses Legal Flechette at HP

July 22, 2014

I read “Former Autonomy CFO seeks to Block HP-Shareholder Settlement.” You may have to answer some questions to see the document or try to log in to the paywalled Financial Times’ Web site. Yep, that’s the wonky orange newspaper that is a must read in London, but not so much in Harrod’s Creek, Kentucky.

The story seems to be straightforward. The former chief financial officer of Autonomy has “filed a legal motion to block” the Hewlett Packard shareholder deal. The idea is that if shareholders agree to let HP off the hook for its acquisition of Autonomy and the fascinating $5 billon write down, then HP will go after Autonomy. The law firm assisting HP will be the same outfit that helped shareholders sue HP for the deal in the first place. Got that?

The Financial Times quoted Mr.Hussein’s legal document about the legal action:

“HP seeks to forever bury from disclosure the real reason for its 2012 write down of Autonomy: HP’s own destruction of Autonomy’s success after the acquisition. And, by the broad bar order it seeks, HP seeks to absolve itself of its own responsibility for its losses.”

The FT did not include the link to the actual filing. You can find it at this link.

The issue, according to the Autonomy CFO’s document is that HP is using the shareholder settlement to bury certain facts about HP’s handling of Autonomy. Autonomy’s argument is that HP fumbled the ball after it conducted due diligence and bought Autonomy.

Autonomy wants HP to provide proof that Autonomy fooled HP, its Board, and its consultants. The idea is that Autonomy allowed these folks to review the financials, the marketing collateral, and other sources of information before deciding to buy Autonomy for $11 billion.

I am no longer surprised by the claims and counter claims. Several observations:

First, search and content processing as business sectors generate a disproportionate amount of thrashing. HP analyzes Autonomy. HP buys Autonomy. HP sues Autonomy. Shareholders sue HP. An individual no longer employed at HP Autonomy sues HP. Etc., etc. Fast Search was the leader in post sale legal maneuvering. Autonomy seems to be following the “fast” track now.

Second, HP bought Autonomy and then said it was tricked. Remember this is not like buying a bagel. Autonomy bought a company with thousands of customers and hundreds of million in revenue. If a bagel is bad, I either demand a different one or walk to another bagel shop.

Third, the acquisition took place three years ago. In that time, the enterprise search sector has been subjected to considerable pressure. Just  check out the latest Gartner Magic Quadrant, G00260831. Notice that Elasticsearch (the fastest growing search system) is not in the Gartner analysis. The Gartner enterprise search report appears to mirror the nature of the enterprise search market itself. The HP Autonomy matter AND the preceding Fast Search & Transfer matter have, in my view, contributed to a general malaise for the search and content processing software. The equation in my mind works like this: Buying a search system = Trouble.

Net net: With the parties to the matter allowing their attorneys to put the pedal to the metal, there will be more excitement in the near future. Billing functions at law firms have steamrollers to operate.

Stephen E Arnold, July 22, 2014

HP, Autonomy, the Vatican: Business Process Case Example

July 21, 2014

On Saturday (July 20, 2014) I read “Exclusive: Vatican Dispute Sheds Light on HP Case in Troubled Autonomy Deal.” The story notes that Reuters saw  “a letter.” Because there was no link to the letter, I decided to wait and see how other “real” journalists reacted to the story.

I found “HP Autonomy Legal Case Takes Religious Twist with Vatican Deal Mystery” interesting. The article does a good job of summarizing Reuters’ recounting of Autonomy selling software to a reseller. Autonomy booked the revenue. The reseller in the US assumed the job of bundling up the software and services and collecting from the Vatican.

Several questions crossed my mind as I through about the original story and the rehash from the V3.co.uk Web site:

  • Is this process different from the one used for selling or leasing an automobile through the value chain at a local Lexus dealership?
  • From where did the copies of the source documents come? Under what circumstances? Why? How?
  • Are other enterprise software vendors using different financial transaction methods? What are some examples germane to the HP Autonomy Vatican case example?

In my experience, there are many ways to sell or license software and services. These range from the open source or freeware approach to the pay for to get a license to use the proprietary deliverable (whether tangible or intangible). Vendors and customers choose an approach that meets the needs of the parties to the deal.

I ask myself, “Is this case example information, reformation, disinformation, misinformation?”

Stephen E Arnold, July 21, 2014

HP: Chasing Autonomy Execs the Next Big Thing

June 28, 2014

I read “HP Will Settle 3 Lawsuits Over Its $11 Billion Autonomy Acquisition, Urge Shareholders To Sue Autonomy.” The settlement approach makes sense; otherwise, attorneys would be able to purchase the total output of McLaren and Ferrari before a final decision stumbles from a courtroom.

The write up states:

To recap: less than a year after buying British software maker Autonomy for $11 billion, HP wrote off $8.8 billion and alleged that Autonomy had improperly inflated its revenues and margins, to the tune of $5 billion. HP called it fraud, named a whole bunch of ways it believed Autonomy had done this, and asked for investigations by the authorities.

But the portion of the article that caught my attention was this passage:

The shareholders will agree to drop all claims against HP’s executives and board members, including CEO Meg Whitman, but they will be free to pursue former officials at Autonomy. Plus, the shareholders’ attorneys will “receive fees for helping HP pursue any further claims” Reuters reports.

My take is that HP wants to covert Sir Michael Lynch from the most successful software entrepreneur in England to scapegoat. The only hitch in the git along is that HP bought a company after Board approval.

Fascinating, but the approach may lead to a fundamental breakthrough in computing. That processing power can be applied to HP decision theory problems. Now that Autonomy IDOL is a cloud service, I assume a computer revolution is not too challenging for HP management.

Stephen E Arnold, June 28, 2014

A Map of Craigslist Crimes

June 11, 2014

A reporter over at The Daily Dot has used data from news stories to answer a point of curiosity, we learn from “Mapping 30 Days of Craigslist Crimes.” It is not news that some people use the classifieds site to perpetuate crimes. Writer Aaron Sankin wanted to know more, to get a “big-picture perspective” of these events. He and his associates mined data from news articles to compile a map of incidents that occurred in April of this year. There are 74 crimes represented on the resulting Google-generated map, though Sankin hastens to note that this sampling cannot be considered comprehensive; these are only the crimes that were both reported and considered important or interesting enough to make the news. Still, it is an interesting analysis.

Of these 74 incidents, eleven resulted in violence and three in death. The most common fell into the robbery/ attempted robbery/ assault categories. That’s why it’s wise to meet online contacts in a well-lit public place, of course. Interestingly, Sankin tells us, a Chicago police department has gone so far as to invite people to complete online-initiated transactions in their lobby or parking lot.

Other, non-violent crimes the team found included the appearance of stolen property on the site and failure to pay for goods. Then there was this apparently common scam:

“One particular type of crime stood out both for its specificity and prevalence.

“The scam typically involves the victim responding to a listing for a rental property and corresponding with someone he or she believed was (or represented) the landlord or property manager. The victim would be sent pictures of the property but not actually be let inside. The victim would then be instructed to send a security deposit and/or the first month’s rent, often wiring the funds to an out-of-state account, and they would then receive keys to the unit.

“Of course, those keys never came and the suspects with whom the victims were corresponding with had no actual connection to the property owners—they simply found an unoccupied housing unit and used it to swindle money out of unsuspecting people.”

So, watch out for that. The article recommends anyone looking for property through Craigslist perform a Google reverse image search, which will reveal whether the same images appear in multiple property descriptions. For good measure, he also includes Craigslist’s own list of best practices, like not giving out financial information or inviting strangers into your home. Most of it is common sense, but it’s worth a refresher for those considering a Craigslist transaction.

Cynthia Murrell, June 11, 2014

Sponsored by ArnoldIT.com, developer of Augmentext

File Sharing Torrent Site Goes Down

May 26, 2014

I read “Largest Torrent Search Engine Torrentz.eu Taken Down by UK Anti-Piracy Police.” Torrent sites are often associated with motion picture downloads, but there are other types of files on these systems. According to the write up, Torrentz.eu pointed to files and did not host the copy protected content. I noted this passage:

Torrentz.eu acts as a search engine for torrents rather than storing the files itself, making the move unusual among police shutdowns. The site receives millions of visitors a day and is thought to be one of the largest torrent sites on the internet.

In my forthcoming Prague police and intelligence lectures I review sites and access methods that are providing some users to content making it possible to obtain copyrighted content. The step is encouraging to some copyright holders. The existence of alternative paths is likely to create opportunities for additional enforcement measures going forward.

Stephen E Arnold, May 26, 2014

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