Freesteel Blog » Weird goings on at Autonomy

Weird goings on at Autonomy

Thursday, September 29th, 2011 at 9:35 am Written by:

HP has a history of buying worthless corporate software outfits that have gone well past their sell-by date. A few years ago they bought one of the UK government’s worst IT providers, EDS, and with it gained a £709million liability in the form of a compensation payment to BSkyB, because Rupert Murdoch, unlike the UK government, actually insists on getting his money back from a company that has “fraudulently misrepresented itself in a salespitch”.

This year HP bought another extremely crappy software company called Autonomy for billions of dollars, long after the world had learnt at great expense that they had no technology and were just a bunch of hot-heads.

I’ll just quote you the press release on the matter from Oracle:

Autonomy CEO Mike Lynch continues to insist that Autonomy was never ‘shopped’ to Oracle. But now at least he remembers and admits to meeting with Oracle President Mark Hurd and Doug Kehring, Oracle’s head of M&A, this past April.

But CEO Lynch insists that it was a purely technical meeting, limited to a ‘lively discussion of database technologies.’

Interesting, but not true.

The slides Lynch showed Oracle’s Mark Hurd and Doug Kehring were all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation. Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone. After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high.

We have put Mike Lynch’s PowerPoint slide sales-pitch up on the Oracle website

with the hope Mike Lynch will recognize his slides, his memory will be restored, and he will recall what he and Frank Quattrone discussed during their visit to Oracle last April. Yesterday, the Autonomy CEO did not remember having any meeting with Oracle. Today, he remembers the April meeting and inaccurately describes how it came about and what was discussed…

One thing that makes a company valuable is that it is able to get away with delivering consistently bad value to the customers.

Here is the slide where they detail the money they make by locking-in the customer into buying all their over-priced extras. Once this has happened to one part of an unsuspecting business run by people who don’t know enough about IT, the rot then spreads with the “decision to standardize” the rest of a business into Autonomy’s incompatible products.

I am on the case because of the BBC contract with Autonomy to make Democracy Live when the CEO Mike Lynch was on the board of trustees.

For me, it is not the waste that bugs me, so much as the way this business model actively suppresses and discourages good software in its place. A loud mouth with nothing to offer but who has got the money needs to make it his business that there is nothing else out there which can prove itself equivalent or superior.

Leave a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <blockquote cite=""> <code> <em> <strong>