Re: Is this the best HP have?
oiseau,
They pushed through with the deal because they wanted the shiny really badly. And apparently because they believed that Oracle were moving in on Autonomy as well. Remember Autonomy were audited, so they had a decent assurance that the books reflected the actual value of the company. As this trial has pretty much proved, in that HPE are only suggesting a small number of transactions are dodgy after half a decade of them, the FBI and the Serious Fraud Office crawling over them.
Which is a pretty good advert for auditing. People have the wrong idea, that audit checks for perfection - but that's not its role at all. It's designed to find big flaws by doing some quite detailed semi-random checks. While also checking the most important things, that the company has the cash on hand it says it has, by checking with the banks and some of the customers and suppliers.
The UK takeover system is different to the US one for historical reasons, i.e. how the markets developed over time. And it would have taken a long time to persuade Autonomy to cough up extra data - not because they were playing silly buggers, but because they came from a different business culture.
The thing that an auditor can't help with is the sales side of things. Did Autonomy have a good product, that was going to continue to sell in the long term. That's a business question, not an accounting one. As a rival in the same market, it was down to the HPE board to know that - and to have a plan to continue to grow Autonomy's sales. And that's what they failed at, either because they bought a product that had been "found out" by the market, or because they totally fucked up in trying to sell it.
I assume cock-up over conspiracy because history and experience has taught me that this is what happens. In both politics and business, very bright people get paid the big bucks to try and control things. And they get some stuff right, but catastrophically fuck some things up on a totally regular basis. So to hint at some dark and sinister reasons for a conspiracy to deliberately lose $8 billion - without an even vague clue about why these people would do this, totally fails the credibility test. Whereas HPE's recent history is full of relative decline and their CEOs leaving under various clouds. Which suggests a dysfunctional board, making bad picks and failing to challenge those people when they do stupid things. Like buying Autonomy when that deal was opposed by their Chief Financial Officer - the very person they'd appointed to advise them on such issues.
However her opposition was on grounds of it being too expensive and causing them to take on too much debt. And there doesn't appear to have been that much wrong with Autonomy's books, even if this trial finds against Lynch - because the books were a broadly accurate representation of the financial position of the company. The problem was a business problem, either because HPE managed them into the ground after the takeover, or because the product wasn't as good as the hype, or because the rivals improved quicker than Autonomy. Or a mixture of all three.
Biting the hand that feeds IT
