Barclays Capital and the HP Autonomy Matter
May 7, 2013
Some of the UK newspapers pop up boxes wanting me to subscribe. Nice try, but I don’t follow too much of the England, Ireland, Scotland action. As fascinating as the Cotswolds may be, most of the business news from England is a bit depressing and irrelevant to life here in Harrod’s Creek. My subscribing to the major UK dailies online is simply not yet compelling. But once in a while an information truffle comes to my attention.
Economy Watch presented this somewhat troubling picture of England’s economy. For a discussion of the data, please, navigate to http://www.economywatch.com/world_economy/england/.
I did notice in one of my Overflights this story, however: “Barclays Capital Accused in Autonomy Lawsuit.” (If the link goes bad, you will have to hunt around for the story or look at a hard copy of the paper in a library.)
The main idea is that HP spent $11 billion for Autonomy. A short time later, HP wrote off about $9 billion, making the deal for Autonomy apparently worth $2 billion. Here’s was the Telegraph said about a shareholder lawsuit which named the top brass of HP among others as allegedly responsible for the misstep:
“HP’s financial advisor, Barclays, was conflicted in advising the board while simultaneously underwriting the financing of the deal,” the lawsuit states. “Compounding the problem, after the acquisition closed, HP’s fiduciaries misrepresented the facts to conceal their own failings,” it [the shareholder lawsuit] added.
What I find interesting is that the difference between what HP paid and at what the write down pegs the “value” is still a hefty number for a search and content processing company. Autonomy was the pre-eminent search vendor, and it did a good job of surviving and growing as other vendors failed. Consider that Autonomy survived and reach nearly $1 billion in revenues as Convera, Entopia, Delphes, Siderean and others disappeared.
My view is that Autonomy’s success continues to give venture firms and entrepreneurs hope that an enterprise search, business intelligence, or content analytics firm can deliver hundreds of millions in revenue. Since the roll up wave of the high profile search vendors has come and gone, the companies which want to fill the void look at the Autonomy deal as a benchmark.
What I find interesting is that like the Microsoft purchase of Fast Search & Transfer, the big European deals have been dogged by by questions about the financial underpinnings of the company. The smaller deals—Dassault”s purchase of Exalead, IBM’s deal for Vivisimo, Lexmark’s one-two deals for Brainware and ISYS Search Software, and Oracle’s acquisition of Endeca—have been largely without excitement. The search “technology” has morphed into functions which enhance the owners’ enterprise systems. I would note that most of these acquired search technologies were aging at the time of the buyouts in my opinion. ISYS, I believe, dates from the late 1980s.
Are some companies unable to manage, value, and leverage their search acquisitions? I was reminded yesterday that 20 somethings and slick MBAs have figured out how to make money from search. I listened, of courser. But in the back of my mind, it seems that most of the still standing search vendors are in the business of raising money. Making sales and growing a business, for some, is a secondary activity.
Which enterprise search vendors are demonstrating organic growth and generating sufficient cash to support and enhance their products? When I think about the mad rush to convert search technology into something to tackle big data or mine nuggets in real time data, I wonder if a “willing suspension of disbelief” is the defining characteristic of those who pump millions upon millions into search and content processing.
Technology is enhanced by marketing. Smart money seems to believe the public relations. The actual financial performance drifts to a secondary role.
Who’s affected? According to the shareholders, executives and bankers. Here’s the phrase in the estimable Telegraph’s lingo: “disastrous purchase of Autonomy.”
Disastrous is a colorful notion when applied to enterprise search and its related disciplines, isn’t it?
Stephen E Arnold, May 7, 2013
Sponsored by Augmentext
Bing Ads Gains Ground Against Google AdWords
May 6, 2013
A recent report from AdGooRoo highlights the ongoing Bing-Google faceoff, revealing some surprises alongside results we could have anticipated. Search Engine Journal informs us, “AddGooRoo Report Pits Bing Ads Against Google AdWords in Six U.S. Verticals.” The study compared 2012-third-quarter results of Google‘s AdWords with those of Bing Ads offered by the hybrid Yahoo-Bing network, and shows Google’s competition gaining ground. The article tells us:
“It is a given in 21st century America that web surfers are going to use Google’s high powered, ever present search engine to look for something on the internet. Web surfers at home and SEO professionals in the workplace know this fact, and the statistics prove it. Google handles two-thirds of search queries in the U.S. each year, but there is competition that could be growing.
“A recent report from AdGooRoo sought to gauge the success of the Yahoo! Bing network in gaining market share against Google. Few web users even realize that the Yahoo! Bing network accounts for nearly one-third of the search queries in the U.S., representing the next largest share of the market behind Google.”
AdGooRoo compared the performance of paid search in six areas (aka verticals): retail, financial services, travel, education, computer/internet, and business to business. In the realm of ad impressions (how often an ad is displayed), BingAds actually outperformed AdWords in the financial-services vertical. Analysts suspect the popularity of that topic at Yahoo‘s and MSDN‘s sites, both of which redirect to Bing, boosted the numbers. It is no surprise that Google still leads handily in retail, but BingAds came close in the remaining verticals.
The picture changes when we consider the all-important click-through rate, however. AdWords still crushes the competition there in every column. Writer Federico Einhorn says analysts attribute the lead to a superior ad-serving system, but notes it could also have to do with Google’s enhanced customization controls, implemented earlier this year. Whatever the case, this is an exercise in “you get what you pay for;” the study found that advertisers pay more per click with AdWords than with Bing Ads. Not surprisingly, many advertisers subscribe to both systems. That is probably a good call.
Cynthia Murrell, May 06, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
HP, Autonomy, and a Context Free Expert Output about Search: The Bet on a Horse Approach to Market Analysis
May 4, 2013
I don’t think too much about:
- Azure chip consultants. You know, these are the firms which make a living from rah rahs, buzzwording, and pontification to sell reports. (I know. I labored at a non-azure chip outfit for what seems like decades. Experience is a good instructor. Oh, if you are a consultant, please, complain about my opinion using the comments section of this free blog.)
- Hewlett Packard. I recall that the company used to make lab equipment which was cool. Now I think the firm is in some other businesses but as quickly as I latch on to one like the Treo and mobile, HP exits the business. The venerable firm confuses my 69 year old mind.
- Autonomy. I think I did some work for the outfit but I cannot recall. Age and the lifestyle in rural Kentucky takes a toll on the memory I admit.
Nevertheless, I read “HP’s Autonomy Could Face Uphill Battle In Data Market.” There were some gems in the write up which I found amusing and illustrative of the problems which azure chip consulting firms and their experts have when tackling certain business issues.
The main idea of the write up for “investors” is that HP faces “challenges.” Okay. That’s a blinding insight. As you may recall, HP bought Autonomy for $11 billion and then a few months later roiled the “investors” by writing off billions on the deal. That was the mobile phone model, wasn’t it?
The write up then pointed out:
HP wanted Autonomy to jump-start its move into software and cloud-based computing. Autonomy is the No. 1 provider of search and retrieval software that companies use to find and share files and other information on their websites and document management systems.
Okay. But that too seems obvious.
Now here comes the kicker. The expert outfit providing inputs to the reporter doing the bull dog grip on this worn out bone is quoted as saying:
“Software license revenue (in this market) isn’t growing at the same rate as before, and we are beginning to see the rise of some new technologies, specifically content analytics and unified information access,” Schubmehl said. These new types of software can be used with types of business analytics software, business intelligence software and other software to help enterprises do a better job of locating specific information, he says, which is the job of search retrieval software.
I don’t know much about IDC but what strikes me from this passage is that there are some assertions in this snippet which may warrant a tiny bit of evaluation.
Will context free analyses deliver a winner? Will there be a Gamblers Anonymous for those who bet on what journalists and mid tier (second string) consultancies promulgate? For more about Gamblers Anonymous navigate to http://www.gamblersanonymous.org/ga/
Here goes:
A Whatever Happened To… HP and TeraText
May 3, 2013
My Overflight for search vendors generated an odd “recent” update. The item originated from Chrlettestuvv’s Blog. The story pointed to an item called “SAIC’s TeraText Solutions Signs Strategic Alliance Agreement with HP.” The source was an “article from Software Industry Report, August 1, 2005.
HP apparently needed something more than TeraText, which shared some similarities with the now forgotten iPhrase and anticipated features in MarkLogic Server today. I find these search- and content-processing related tie ups interesting.
Each time I recall one or some glitch in the Internet surfaces a partner factoid, I am more confident that search vendors and some growth hungry large corporations move from speed dating to speed dating activity. Do the engagements lead to marriages? Sometimes I suppose. Other times the companies, like boy friends and girl friends in high school, the couples just drift apart.
Search, however, remains mostly unchanged.
Stephen E Arnold, May 3, 2013
Sponsored by Augmentext
SRCH2 Hopes to Challenge Existing Enterprise Search
April 30, 2013
A new start-up is trying to bring Google-like search to the enterprise with its new SRCH2 solution. For quite a while, users have been discussing how to bring the Web search experience to the enterprise market. It seems SRCH2 is hoping to finally achieve that feel. Read more in the Venture Beat article, “SRCH2 Launches Google-like Tech to Fix Enterprise Search.”
The article begins:
“The newly launched startup SRCH2 doesn’t focus on standard web search, a space inhabited by Google and Bing. It’s offering a new take on ‘enterprise search.’ Bhatia considers search companies ElasticSearch and LucidWorks as the primary competition. But he clarifies that these search products are built on top of Lucene. SRCH2 is developed from the ground up.”
Unfortunately for Bhatia and his company SRCH2, what makes LucidWorks a standout is not just its creativity and agility, but its strong track record. Start-ups are great, and often inject a new shot of originality into any given market; however, what enterprise customers are looking for is dependability and security. These are qualities that LucidWorks can stand tall on, and defend now and in the future.
Emily Rae Aldridge, April 30, 2013
Sponsored by ArnoldIT.com, developer of Beyond Search
Pintrips Offers New Take on Travel
April 30, 2013
Is this a new type of search? Pintrips insists it has something unique in a press release posted at Market Wired, “Pintrips Takes Flight—New Kind of App Takes the Chaos Out of Finding the Best Fare.” The cross-platform tool consolidates information travelers discover across sites, allowing them to share their findings publicly and privately, complete with real-time price and availability updates. That certainly sounds helpful. The write-up tells us:
“Pintrips leverages what’s spread out on the internet, making comparing and finding ideal flights and deals easier than it’s ever been. Instead of time consuming and memory-challenging flight comparisons on multiple windows, the Pintrips platform uniquely allows consumers to compare deals, itineraries and choices in new ways; apples to apples or apples to oranges. For example, compare different date pairs to the same destination to see when better deals are available; compare different destinations such as deals to Montego Bay versus deals to Aruba, Paris versus Barcelona with absolute ease.”
According to recent research, consumers are frustrated with the process of comparing deals across travel sites. Pintrips aims to fill that gap, expecting that frequent travelers will get the most out of their service. Public “pinning boards” enable users to share travel information, bringing the crowd-sourcing impulse to this arena.
The company promises continued refinements to their product, including mobile apps. Currently, the site works best in Chrome, but developers promise Firefox, Safari, and IE functionality down the line. Pintrips was founded in 2011, and launched its beta product in November of last year. The company is headquartered in Sunnyvale, CA.
Cynthia Murrell, April 30, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
MBAs, Innovation, and Search
April 29, 2013
I read “If MBAs Are Useless, We’re All in Big Trouble.” My interest is search which gives me considerable room to wander in the intellectual farm land. The key point, in my opinion, is that MBAs are not useless and smart money types who suggests MBAs are losers to some degree are off base.
Here’s the snippet which caught my attention:
While creating a product and starting a company have never been easier, building and sustaining a business have never been harder. And lean is not everything. That means business education has never been more important. But first, both b-schools and companies need to learn some new tricks.
Several thoughts crossed my mind. The argument points out what any one who owes money knows. Producing revenue is pretty important to avoid failure, humiliation, or legal action. Also, the idea that a person can do everything by himself or herself is not such a good idea. The underlying truism is that many tasks are complex. Renaissance men and women are in short supply. Ergo a team is needed. Also, the notion of learning new “tricks” is interesting. A trick is, in my view, a short cut. And as any one who struggled in math class knows, tricks make the difference between an A and a C or D for some people.
Even the US government embraces the precepts of MBA-type principles. How is that working out for the US debt? Image source: http://www.hhs.gov/open/images/innovations_fellows.jpg
The next key argument is that “growth” is difficult to achieve. I automatically substitute the phrase “making sales and getting paid” for growth, but the comment is spot on. The subordinate points just polish the discount forks and knives.
Here’s a passage I highlighted:
business education needs to be more practical. Moving faster means leaders have to make more decisions with incomplete, unstructured or ambiguous information. That requires a stronger emphasis on judgment and problem solving, not just analysis. And that realization is already driving both startups and established companies to ditch market research and business plans in favor of prototypes and experiments. The same thing is happening in classrooms.
I don’t agree. What seems to be happening is that the shift to online education is having a disruptive impact on education. I live in a fourth class city in a state which has modest traction in the wide world of higher learning. There are instant schools which provide education and degrees. There are universities which field athletic teams which get more attention than academic programs. There are lots of folks who graduate with degrees and have difficulty reading. I have met some MBAs who work in restaurants. Not good.
So what’s this have to do with search?
Actually the new online users have to have systems which think for them. If these users do not know how to separate the goose feathers from the giblets, the users will depend on systems and services which provide answers. Without the ability to determine if the answers are correct, the big computer outfits are in control
And MBAs? In my experience most MBAs want to make money, be successful, make decisions, and be able to create a killer golf or bridge group. The smart money reaction against MBAs, if it is indeed happening, is a “birds of a feather” action. An MBA who succeeds knows that MBAs are not central to the success equation.
I am not an MBA or M anything. I look at the situation many executives at search companies have as a working environment. I am not sure an MBA or even a degree in nuclear physics is going to provide a clear path to innovation or financial success.
Focusing on a degree or a particular attribute highlights the self evident fact that making money is tough. Looking for a trick, a recipe, or a short cut satisfies the mind which struggles with more sophisticated ideas.
Yep, I too want “speed, agility, and adaptability”. Unfortunately, none of those characteristics works like following a Lego diagram to build a castle. What does work? If someone knew, the dismal success rate of start ups, new products, and sustainable revenue would not be the defining characteristic of today’s business environment.
And search? How many of those content processing outfits which have been in business for four years or more will be able to emulate the success of an Endeca or Google? Does an MBA has the answer? Let me know. My searching online returns no usable system or method.
Stephen E Arnold, April 29, 2013
Sponsored by Augmentext
Google and Yandex: Who Will Win?
April 29, 2013
Business Week tackled the subject of why Google is not the number one search system in Russia. Good topic, but I wonder if part of the answer rests with why Googlers’ efforts to ride a Russian space ship crashed and burned. Perhaps there is more to the Russian market that clicks from those friendly Muscovites and happy folks in Yakutsk?
The write up “Why Google Isn’t Winning in Russia” asserts:
With all of its success on the Web and the rise of Android to the top of the smartphone world, it’s easy to forget that the company faces huge cultural hurdles – and entrenched competitors – in making its search engine truly a world-beater.
So culture? I thought Google had one or two folks familiar with Russia working in the firm’s offices in the US and Europe.
The point of the write up was to underscore the success of Yandex. Business Week says:
Yandex, which is Russia’s most-used search engine, has an analyst score of 4.6, with a 5 indicating a buy and 1 a sell, while Google scores a 4.3, according to data compiled by Bloomberg. Yandex’s dominance of the Russian search market – with 62 percent market share compared to Google’s 26 percent – gives it an overwhelming advantage in attracting advertisers and generating profits.
My thought is that Yandex may have some advantages which Google lacks. I could be wrong, but success in some countries may have some connection with politics. Just a thought.
Stephen E Arnold, April 29, 2013
Sponsored by Augmentext
Amazon and Margins
April 26, 2013
Amazon is making some big bets. The company is chasing Apple, Google, PayPal, and probably some other juicy giants. I read “Margin Call 2.” The article includes a nifty chart which focuses attention on Amazon’s margins. Revenue growth is super. Profits are super. So what does a finance type complain about? Margins. The key point is that tucked into the charts about Apple, Google, and Microsoft is the thought that Amazon may have to do some pencil sharpening when its comes to its margins. Cost control may be tough when trying to move into territory occupied by some fierce competitors. Will there be sufficient money for Amazon to address its what seem to be minor and “trivial” search challenges? Search can be an expensive item and cash hungry when pursued aggressively.
Stephen E Arnold, April 26, 2013
Sponsored by Augmentext
Taking on the Google Giant
April 26, 2013
It has been discussed before and will continue to be discussed, because humans are always curious about finding alternate and new ways to accomplish the task. The question is, “Can A Small Search Engine Take On Google?” and it was proposed by On the Media. The link will lead you to a recording about:
“Duck Duck Go is a small search engine based in Pennsylvania that is, according to Google at least, a Google competitor. OTM producer Chris Neary talks with Duck Duck Go founder Gabriel Weinberg, SearchEngineLand’s Danny Sullivan, and a dedicated Duck Duck Go user about the site. Also, each of the OTM producers try Duck Duck Go, and only Duck Duck Go, for a week.”
Google challenged its unhappy users to use an alternative search engine if they were unhappy with its practices. Duck Duck Go has been acknowledged as a Google rival. Weinberg says his search engine does not collect personal data from its users and it does not have Google Web sites in its results. Others are saying that Duck Duck Go is only acknowledged, because the search engine market is so small. Changing search engines is a major upheaval in a user’s life and the On The Media staff found using Duck Duck Go for a week difficult. Some of the people enjoyed it, because they were interested in privacy and wanted to find an alternative search solution.
Duck Duck Go may not find everything you need in a minute, but its fans are dedicated. It has awhile to go, but count on it hanging on for time to come. The competition is hefty: Google fields 2 billion + queries a day?
Whitney Grace, April 26, 2013
Sponsored by ArnoldIT.com, developer of Beyond Search
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