'British Bill Gates' Lynch laments HP's Autonomy 'botch-up' Mike Lynch, once billed as Britain’s Bill Gates, has lamented the handling of his former company Autonomy, saying Hewlett-Packard fumbled the acquisition. In a softball CNBC interview where he pushed his Invoke Capital venture fund, Lynch said Autonomy was the “next generation of software” until HP "dropped the ball". In …
"Like how to flog a $1B company for $10B? A most useful talent to be sure. "
I think you credit Mr Lynch with far too much. From where I sit, it's boo ***ing hoo for the retards at HP; Poor little darlings, exercised the full extent of their corporate brains, spent millions on "due diligence" on "advice" from law firms and investment banks, and then still got caught out by suspect accounts? Did they really know nothing about the accounting that goes on in ANY enterprise software company? Currently the shallow, lightweight losers that make up HP's board are trying to sue Autonomy and the advisers, but that seems to ignore the point about why HP's directors were prepared to bid so recklessly, because even if the accounts were correct, then they still didn't support the price that HP were so keen to pay.
No, matey, if HP paid over the odds, then EVEN IF THERE WERE FRAUD, then it's all still the fault of HP's useless, value destroying board, rather than any sales talent on the part of Lynch. If HP's board aren't clever enough to undertake effective M&A, then they shouldn't be pulling down their exceptionally fat salaries. I might say the same about Microsoft, of course.......
Fraud or no fraud, HP did overpay for Autonomy. The number that Autonomy published did not justify the valuation HP paid for it. Many people said so at the time, including some of the journalists in this esteemed organ.
If someone offered you £1000 for a packet of crisps you had in your hand you would say yes.
You might think "how weird" but it's their choice.
I once had more or less that very thing happen to me when someone asked me to straight swap my clapped out old Pentium laptop with failing battery for a rather nice new 17" mobile workstation.
"...but yours is so much better"
"no it isn't, it's old, obsolete and warn out"
"it does what you want, doesn't it?"
"barely"
"well that's all I need. yours is so cool and more portable too. please swap"
"no... it wouldn't be fair"
"but I want to"
"i know, but i wouldn't be able to live with the guilt"
"what guilt? yours will do everything I want and is so much cooler. PLEEEEAAAAASSSEEEE swap...."
"no"
If she'd been an immense multinational tech corporation with teams of skilled PC technicians picking over my PC and accountants trawling through all my accounts I'd have said "As you wish. There'll be a £150 fee for transferring my stuff of course"
It's not Autonomy's job to try to guess what drugs the board of HP are on and hold their hand. FFS!
The one question I've always wondered about that whole fiasco was, "Who was the Cook?"
In case you're confused, in the novel 'Catch 22', the cook bought eggs at a rather high price, then sold them cheaper. It later was revealed that he was running a con using the camp food budget to buy the eggs... from himself, and then resold the eggs to the camp kitchen for less, again using camp funds.
In the HP/Autonomy deal, who on the HP side benefited from overpaying for Autonomy?
There had to be someone, otherwise there's no way such an apparently bone-headed move would've ever taken place.
There's no fraud. On the public profit profits and revenues HP paid way way way too much for autonomy.
Now... There's the it's new tech so we paid a lot of money to get the new tech - but here's where the fraud from old Autonomy falls apart - if HP decided to do that then it's on them.
Have to agree with you.
Corporate Boards are supposed to oversee what their "employees" (CEOs, COOs, CFOs, CIOs, etc.) do in the performance of their jobs.
It is up the the Board to make sure that these folks don't screw things up, and if they do, then the Board should either call them in on the carpet, or get rid of them.
BUT...and it is a BIG BUT...due to the incestuous nature of corporate boards around the planet...there is very little...if any...true oversight.
And if someone IS given their walking papers for a major screw-up...they fairly rapidly re-appear on some other corporate board...to start the process all over again.
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"In case you're confused, in the novel 'Catch 22', the cook bought eggs at a rather high price, then sold them cheaper. It later was revealed that he was running a con using the camp food budget to buy the eggs... from himself, and then resold the eggs to the camp kitchen for less, again using camp funds."
Yes, I am confused!!
"After the acquisition, Lynch and his Autonomy management team set up Invoke Capital with $1bn of capital.
Invoke on Monday announced its first investment, putting an undisclosed amount into a cyber security firm called Darktrace that uses mathematical research from the University of Cambridge in its software."
Wait! What? Per the recent NSA revelations & PC HW & SW supposedly all riddled w/backdoors, I thought there was no such thing as genuine cyber security.
Oh please... Autonomy was a sales engine with professional services as the product. Oh, and they had some code, but nothing that was useful without a million dollars of pro services to make it work (if that was possible).
A search product that would build an index bigger than the data being searched, thereby more than doubling the storage cost -- what a genius! A company that ran baffling ads on 101 into San Francisco wibbling on about "meaning based computing", like anyone had that on their shopping list.
The only bigger fools here were HP, desperate to buy a software company and willing to ignore all the evidence from the accounts, all the people who knew Autonomy was a paper facade over a boiler-room sales operation, and "customers" who freely admitted getting payments from Autonomy that exactly matched the price they paid for "software". Heck, even Gartner issued a warning to clients to beware the huge pro services costs of making Autonomy functional.
He should move to silicon valley and start hyping social media start-ups with no revenue to speak of. He'd fit right in.
I've actually had the "pleasure" to work with their search product called IDOL. To be able to even get a glimpse into how that pile of steaming turd works, you need to attend a couple of multi-day courses. Once you've done that, you still need their consultants to help you get started.
It's the "next generation" in terms of getting a step closer to printing money. That was shamelessly displayed at some of their events, where they invited customers into top London hotels for fancy lunches. I did attend one of them, too.
Also worth experiencing: their former Cambridge head office with a massive massive fish tank in the middle of the lobby, or the Green Park London office.
No, Automony's software was not next generation in my opinion. But their approach to pulling in serious money from big institutions and governments, that was certainly next-next generation. So well done on that count, gotta give them that.
Maybe HP fell for their massive show-off, too, who knows...
This is Britain - the UK or if one wishes the United Kingdom of Great Britain and Northern Ireland.
It does not do entrepreneurism, it does do imperialism and wrip-off Britain.
Look at the UK decline in, well almost everything?, compared to say Germany.
While a Volkswagen plant in Germany is reputed to be presently larger than the Isle of Wight from half a dozen bombed out assembly sheds in '45 the UK auto industry is, well, a token support by international corporations to ensure at least some sales in UK.
Similar to aircraft industry, similar to -well- most UK industries including IT (software, firmware and hardware).
Britain does not do industry very well while excelling in additional layers of bureaucracy and administration?
Same to you. UK become great by trade, ruling the seas, as you know. Germans had to rely on making stuff. That is just how it went. And if I would like to be awful, I always do, I would add that, perhaps, it was as good thing that the Germans (and the Belgians) did not "get" more colonies. Just look at how they behaved in Africa. (or let it be as it will make you sic) So on the other hand there is more English spoken than German in this world, and genetically you have probably expanded more than the Germans. Something good something bad, but understanding "to day" is not possible without knowing yesterday. I can understand your concern, though.
when all is said and done it's all down to one thing ...."due diligence" , and whether or not in this case it was..
outsourced.
hp - are well known and versed in the art of aquisition if they had problems then they techincally only have themselves to blame.
As for mike lynch - well his name is now damaged .. potentially beyond recog - which tends to make him uk VC angel for the foreseeable - that is if he believes in the uk , which i think he does.
Still , it's an interesting story.
HP clearly paid too much for Autonomy as they have admitted with the write down. Totally the fault of the due diligence they did. However for Lynch to say this was the next generation of software and that HP botched it up is a warped view of the reality of the software as well. It still exists. If it was so advanced don't you think HP would be making hay with it by now. It has only been 3 years since the acquisition. Lynch's word's on the value of the Autonomy asset ring hollow.
I left HP (I had been there 25 years) right after the Apoteker announcement of the Autonomy acquisition, the statement that they would spin off the PC business and the canning of WebOS and their phone and tablet business. They totally lost my faith.
Good on Mike Lynch and the Autonomy Employees. They are doing very nicely and you can't blame them for getting the best deal possible. What is forgotten in all this is the poor HP employees who saw the Apoteker debacle including the Autonomy purchase trash their lively hoods when they did nothing wrong.
Mike Lynch would be better off saying he got the best deal he could for the company and that it was HP's fault if they overpaid or had no idea what to do with the software. Getting maximum value is a skill. Writing a possible future history is the job of Novelists.
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