My bet is they are both right...
A worthless company bought by idiot Execs
Former Autonomy CEO Mike Lynch has stepped up his rhetoric against HP in his latest lawsuit against the firm, having characterized HP as a snake pit of backbiting and internecine squabbling where execs "generally fought amongst themselves like cats in a sack." In papers [PDF] filed with the UK High Court on Thursday, Lynch …
A worthless company bought by another worthless company.
Or, as Scott McNealy so aptly put it, the sound of two garbage trucks colliding...
(I lament the downfall of HP - it was indeed a different company when the HP Way meant something, and Bill and Dave were still around, and indeed walking around and "visiting").
"A worthless company bought by idiot Execs"
Well, not worthless, but definitely not worth what HP paid for it.
Nobody else, not even Autonomy, thought it was worth near that much.
But when somebody shoves a truckload of money in your face yelling, "TAKE IT!", there are few that'd say no.
But when somebody shoves a truckload of money in your face yelling, "TAKE IT!", there are few that'd say no.
I think they're not even allowed to without the risk of getting sued - duty to shareholders and all that. Having dealt with juggernaut sized companies, I find their side of the story not quite as unbelievable as HP makes it out to be. I've seen bigger stupidity committed in internal strife.
HP's lawsuit is a laughable and desperate attempt to divert attention from the $9 billion writeoff HP managerial negligence and incompetence has inflicted on its shareholders. HP management anxiously look forward to continuing to wildly sling shit in this ongoing desperate bid to muddy the waters sufficiently to avoid being forced to answer for their actions in court.
"As a result, HP business units were incentivized to market and sell competing third-party products rather than Autonomy software."
Even when Bill and Dave were still alive, that was a problem. When I worked there in the early nineties, my division (producing CAD software) had the exact same issue - the workstation salesmen were pushing our main competitor's products.
Quite a lot of people would say that this is a feature, not a bug. Would you rather have the workstation salesmen undermine their own unit by pushing an inferior product, just because it is made by the same company?
At best, this would be inefficient; at worst, it can land you in regulatory trouble: See Microsoft and Internet Explorer.
Seems like he's put down a lot of stuff that could easily be refuted if it was false.
Let's see if HP deny each of his claims. Easy enough for them to do at the right time.
I know a little about HP and the picture he paints rings a bell with me. But then again it has to for his case to stand up.
"...HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court."
I bet they are anxious.
I'd be very surprised if this ever actually got to court.
Did HP pay far too much? Yes.
Is that Autonomy's fault? Probably not, even HP people at the time were saying it but they still chose to buy it.
Regardless of the price did HP use its legendary ability to fuck up an acquisition to destroy most of the value of Autonomy?
HP became a pale shadow of their former self, where attention to detail, obsession with doing it right and bleeding edge innovation were originally the order of the day. I worked freelance at both Digital in Reading and 3Com in Hemel years ago. Digital were bought out by Compaq, then by HP. All three really good companies that just got sunk without trace once HP got their clumsy claws on them. They may have paid too much for Autonomy, but perhaps due diligence not their strong point, or was that sort of business "fashionable" at the time ?.
The days of HP being the best test equipment and top end computer vendor are overr, just a set of box shippers and ink suppliers these days. A classic example of corporate greed and board room gross incompetence bringing a company down. Sic Transit Gloria, or what ?...
"Sic Transit Gloria, or what ?..."
More like sick transit Carly.....
She killed off the labs (at least the basic R&D), then with the various splits that followed (both at HP and Agilent) in order to support Carly's buying binges, the essence of the company was flushed down the proverbial bog.
If you can find a copy of "In Search of Excellence", it has a really good section on HP. Many of the factors that made HP great are gone, jettisoned by Carly, Hurd, Apotheker (he should have been one), and now Meg the Megnificent.
The HP that had many, different divisions that both supported and competed with each other provided an environment where ideas could grow, often helped by ideas, software, or hardware from other divisions that were available at lower cost and better quality than on the open market. That was pretty much the opposite of today's situation.
Having said that, there are many who believe that HP's slide began with John Young, rather than just Carly.
Lew Platt was better that he's been given credit for, but real innovation stopped when Bill and Dave stepped back from active involvement in the company.
And, HP, please get rid of that stupid "Invent" on your logos and signs. HIRE and NURTURE inventors, don't stick a word to the bottom of your logo and hope IT invents.
from the counterclaim:
"At a subsequent Executive Committee meeting Ms Whitman did not properly address the issues raised by Dr Lynch and instead repeatedly adopted the management approach of, inter alia, (i) playing country music to the meeting instructing the senior executives attending to take the meaning of the country music songs and apply them to their own management methods and (ii) reading out unrelated emails from members of staff who were not her reports, complimenting and praising her"
and four more times, "Ms Whitman did not properly address the issues raised by Dr Lynch and instead repeatedly adopted the above management approach"
now, where'd i put my popcorn :D
(The title is a riff on an old "Wild Cherry" tune...)
"(i) playing country music to the meeting instructing the senior executives attending to take the meaning of the country music songs and apply them to their own management methods"...
The big question now is, was the song:
"Stand By Your Man",
"I'm A 'Stand By Your Woman' Man" (especially apropos for Meg or Carly),
"There's a Tear in My Beer", or
"Time Wounds All Heels" ???
It is fairly well know that Dr Mike Lynch did his PhD thesis on Bayes’ Theorem and in 1996 set up a business with Richard Gaunt that eventually became Autonomy. Along the way in 2004 Richard Gaunt on behalf of Autonomy filed a provisional patent application for “Methods and apparatuses to generate links from content in an active window” which later became a full patent filed by Dr Mike Lynch and two other Autonomy staff that was granted - Method and apparatus to link to a related document
This granted patent is one of what is believed to be around 170 patents owned by Autonomy in countries around the world which cover all sorts of core technologies which are going to lock up this area for the next twelve to fifteen years. US Patent 7272594 makes reference to Bayes’s Theorem (how you make choices as data becomes available) and Claude Shannon's principles of information theory (mathematical limits of certainty). This patent, in my view. is a fundamental building block for all technology in this sphere of activity. No rival company (Google, Microsoft, IBM, Amazon etc) could afford to enter this field with any cloud service offerings because Autonomy's patents will enable them to be injuncted with dire consequences for all of them - billions in damages etc. This is not technology where it can be claimed the consumer is being denied rights because of a lack of a competitive market in the patents through licensing - Autonomy is a business to business offering whose technology falls full square within the lawful monopoly for patents permitted under the US Constitution - a monopoly right which is respected across the world. Rivals who choose to try and compete with Autonomy are likely to suffer the same fate as Kodak did when it tried to produce an instant print camera in breach of Polaroid’s patent portfolio - global injunctions and heavy damages.
So why are these rights so valuable even if Autonomy is not yet fully enforcing its patents? The issue is one of stickiness. Around the time of the takeover by HP Autonomy had 20,000 clients, with management contracts for giants such as Citigate and Shell. Autonomy also drives the UK police's Holmes 2 system, which can tie together fingerprints, witness statements and police reports. It can sift emails, documents and even phone calls and elucidate the meaning inherent in them. It allows customers to search and categorise unstructured information - such as e-mails, phone call logs, pictures, film clips, anything that has not been organised into a database. It has been heavily used by banks and other large corporations preparing for class action lawsuits, helping them find all the documents needed for trial. Société Générale, for example, installed the software to trace the actions of rogue trader Jérôme Kerviel. Any company which is hit by a "litigation hold" notice had better turn to using Autonomy's software or face the consequences.
Once a company starts using Autonomy's software it cannot stop - the cost of leaving is too great. Even if someone could lawfully design around Autonomy’s patents it will not be able to capture an existing Autonomy customer because if the customer wishes to move to a rival supplier the cost of doing would be prohibitive. If your business depends upon having a computing network running 24/7 (which today covers all financial and insurance services) and you have purchased an indexing package from a company which you have run for some time - then you may never be able to move. This is because of what Donn Parker of SRI International called MTBU - maximum time to belly up. The move to a rival supplier would cause you to be without computing services for a protracted period of time during which time your business would automatically fail because for it to survive it needs to keep running 24/7. No business which uses e-mail in its day to day operations could afford to move. It is like being told that you could switch electricity suppliers if you were prepared to live without electricity for 3 months - not many households would be prepared to do so.
But the opportunities and benefits which arise from using Autonomy’s software outweigh the risks - imagine compliance departments running Autonomy's software to stop another financial collapse, another Barings or UBS case. Autonomy was not holding its clients to ransom with its sales contracts but it was able to use a very aggressive way of estimating the value of each customer - to take account of the fact that every customer Autonomy acquires will never leave - i.e. there will be no churn. This is what HP present management team has failed to understand. And this is why HP may have got a bargain in paying just $11.1 Billion for Autonomy.
Bollocks. This reads like the sales pitch to HP which caused them to overvalue in the first place, not withstanding I believe Lynches account of their value disruction.
Part of the core of Autonomy is easily replaceable with FOSS Lucene/Solr and indeed was built on Lucene. Which incidentally Autonomy acquired from Zantaz in 2007. i.e. wasn't even home built.
The reality is rather different from what you suggest. When HP made its complaint saying it had been defrauded the matter was naturally passed across to the SFO in the UK which ran into a problem. The SFO uses Autonomy software for its operational analysis and preparing cases. So there was a conflict of interest that could only be avoided if the SFO could use an alternative software product. It couldn't - the SFO was locked in just as I indicate. So one of the reasons why the SFO threw out the case against Autonomy was that it was unable not to use Autonomy's software in its normal operations.
HP senior executives do not appear to be the sharpest tools in the box in respect of understanding the value of what they have and what they can do with it - just look at what Steve Levy said a couple of days ago regarding Carly Fiorina and Steve Jobs
" US Patent 7272594 makes reference to Bayes’s Theorem (how you make choices as data becomes available) and Claude Shannon's principles of information theory "
So this would be a software patent then would it?
I smell an almighty pile of BS.
Also Holmes 2 is decades old and IIRC originally hosted on a mainframe.
The only way Autonomy could have gotten involved in that would be by inheriting it from it's original developers or by being a retrofit module.
There is nothing fundamentally wrong with software patents per se. The IBM 360 (remember that) had features which in some models used hardware to perform certain operations and some less expensive models used software to do the same thing. The hardware versions were patented and the software versions were implementations of the hardware versions so were patented too.
The problem with software patents arises when they are too broadly claimed and the failure of the US system to genuinely look for prior art. Our European system is considerably better, more thorough and more restrictive. Autonomy owns several European patents for its technology and its implementation of Bayes' Theorem in gathering and classifying information. Simultaneously Microsoft developed technology to identify and eliminate spam e-mail. - a very successful patented Bayesian Networks invention which is in constant use across the internet and without which e-mail could not function today. Since then all Microsoft's modern user interface technology appears to have been built around Bayes Theorem and indeed, since the 1990s, they appear to have patented everything that they can in this field. Bill Gates has been described as a Bayesian believer and vast resources appear to have been deployed by Microsoft in recent years.
I worked for HP Tech support during this time frame. The descriptions of HP upper management are bang on from what I observed first hand during the Apotheker/Whitman transition. Unclear and muddled policy, procedure, and direction could be felt all the way to the bottom. Take the first Touchpad for example... Extremely well built hardware, muddled direction on software, discontinued and fire-sale'ed almost as soon as it was released.
It appears to me that HP in their rush to acquire autonomy failed in due diligence and offered too much. Caveat emptor HP, learn to kick tyres harder and start the bidding low.
A used car salesman isn't going to talk himself out of a tidy profit and it's up to the buyer to screw the price down by looking for defects.
Long ago I advised organisations who had bought Autonomy but who couldn't make it work. I think HP bought it on the same basis as many of my clients. Problem was that, in believing what they they were told, HP paid way over the odds. HP has absolutely no idea what they buying Autonomy for. Their then CEO thought they should get into the integrated solutions space, but didn't know which one.
As usual, the lawyers will win.