The Hewlett Packard marketing machine was busy last week, assuring the world that the company’s £7.1bn ($11.7bn) acquisition of Autonomy still made sense despite an eye-watering financial write down and unseemly public squabbling with the Cambridge company’s former management. HP CEO Meg Whitman used her keynote at HP Discover in Frankfurt to assert that the technology giant was “100% committed to Autonomy’s technologies,” whilst almost everywhere we went in the Messe‘s halls we encountered Autonomy pixie dust spread liberally across HP’s portfolio of products and services.
That Autonomy powers fraud prevention and e-discovery services is no surprise. Its apparently pivotal role in augmented reality magazine ads, fault diagnosis in laptops, and something elusive in the printer division was, perhaps, more of a stretch. And yet, it was here that HP staff got excited. It was here, too, that the benefit of tight integration within a hardware, software and services behemoth could make real sense. And yet, the beauty and logic of this match at times appeared just a little too perfect. Is HP and Autonomy really the match made in heaven that was implied? Do Autonomy and HP Vertica really fit together like peas in a pod? Are there no rough edges and mismatches at all? That seems unlikely.
Is Autonomy really the answer to all of the challenges that HP points it at? Or is the company taking some undeniably smart technology and applying the Autonomy hammer to everything in sight, from nails to grapes… and thumbs?
To recap, former HP boss Léo Apotheker surprised observers in August last year when he announced plans to acquire Autonomy for more than many thought it was worth. This was part of his bold (and broadly correct) plan to transition from low margin hardware sales to higher margin software and services relationships. But the plan was half-baked, and resulted in Apotheker being shown the door. Oracle claimed that Autonomy had been offered to them first, for much less. Autonomy denied it. Oracle produced a powerpoint deck. New HP CEO Meg Whitman pushed ahead with the Autonomy acquisition, whilst back-tracking on some of Apotheker’s other plans (like his intended sale of HP’s still-profitable PC division, without a buyer or an understanding of the knock-on implications on the enterprise hardware business). Autonomy boss Mike Lynch left HP in May this year, claiming the company was (and given its size, is this surprising?) “too bureaucratic.” And then, last month, HP announced dreadful financial results and accused Autonomy’s management (including Lynch) of various failings. Whilst some (or even all) of the accusations may be true, the very public name-calling has conveniently diverted attention from rather more serious structural concerns lurking within HP’s reported financials. Pull up a chair, enjoy the fight, and don’t look too closely at the crumbling walls or the circling wolves. By coming out fighting, so visibly and so aggressively, Lynch may well be doing exactly what the HP board hoped he would; diverting attention from the real story.
Whether or not it’s the panacaea the HP hype machine implies, the Autonomy acquisition is already being put to good use within the company. Andrew Joiner, General Manager of Emerging Technologies and Marketing for Autonomy, told SiliconAngle’s John Furrier and Wikibon’s Dave Vellante that “Nothing aggravates me more than seeing companies throw away data.” The solution? Buy Autonomy, and a whole heap of profitable HP storage. In another SiliconAngle/Wikibon double-act, HP VP of Converged Application Systems Paul Miller (no relation) was reported to say that “[Autonomy eDiscovery] is usually purchased by a legal or compliancy department within a company and not IT,” getting HP ever-closer to budget holders and decision makers across the enterprise.
We were surprised when HP spent so much on Autonomy. We were unsurprised/resigned/amused/despairing/bemused when the financials unravelled. Now we’re being told that Autonomy is a pivotal piece in the new HP. The company has begun to roll out Autonomy-infused solutions, and some of them look pretty compelling. Elsewhere, though, there’s the almost unmistakable aroma of a company trying just a little too hard. Whether they’re desperately trying to justify the price tag, continuing the tactic of using Autonomy as a distraction, or simply throwing Autonomy at everything in order to see where it sticks remains to be seen.
Although I’ve tended to think it was over-priced, I’ve always been impressed by Autonomy’s technology. Inside an HP that really recognises the value of combining software, hardware and services as well as the value of compelling software-only propositions? In an HP like that, Autonomy’s IP could be put to work in some remarkable ways. But watch out for the grapes and the thumbs, whilst merrily whacking away at business nails with your shiny new Autonomy hammer.
And if Autonomy really does deliver so much value across so much of HP, how long is it until the ‘Intel Inside’ stickers on HP laptops, servers and more are quietly replaced with ‘Autonomy Inside’ ?
Up shortly, some thoughts on HP’s cloud strategy…
Disclosure: acting on behalf of Hewlett Packard, Ivy Worldwide invited me to Discover and covered travel and expenses associated with the trip. There was no requirement that I write about HP, and no requirement that any coverage be favourable.
- Former Autonomy CEO Calls on HP Board to Explain Claims (bloomberg.com)
- HP Unveiling Software From Embattled Autonomy Unit – Bloomberg (bloomberg.com)