6 ms·

HP to buy Autonomy for $11 billion

54 points by whyleyc 15y ago

teyc 15y ago
Has anyone here used Autonomy? It seems to be used in call centres to detect nuances in a person's words. What other type of data mining does it do?
- jgmatpdx 15y ago
  The call center tech was acquired; I don't suspect much of it ever had anything to do with their core product.
- d4nt 15y ago
  They implemented it at my last employer - a professional services business with lots of documents to search. I don't think we were really using it to its full potential though.
mootothemax 15y ago
...along with plans to spin off its personal computer business. Damn, until now I'd missed that this wasn't "only" about phones and pads; HP's planning to become a software-only company! Very saddening.
- hboon 15y ago
  They are still holding on to their server business it seems. So they are doubling down on their enterprise solutions and services, not unlike IBM.
- qq66 15y ago
  won't they still sell servers?
- gaius 15y ago
  The "real" HP that most people think of was spun off as Agilent. HP that's left now is a hollow shell of its former self, just holding onto the brand name. Very sad.
- teyc 15y ago
  According to press pundits, it is because Apotheker wants to turn HP into enterprise software+services company, like SAP and IBM.
rorrr 15y ago
Even after today's surge (+75%), its market capitalization is $6.11B. Yesterday's market cap: $3.5B. Why would HP pay 3X its market value?
- Protagoras 15y ago
  The normal reason for paying large premiums is that shareholders aren't interested in selling at the current market rate (otherwise in a liquid market they already would have). If you offer a small premium of say 10% investors might just think there is a better deal out there. Consequently the market value of the company may jump by 15% forcing you to make a new offer of 20% which the market still doesn't accept etc.. until you finally reach a negotiated price. From the numbers side of things this looks better for the buyer because you may end up with a lower buying price. However this way of buying a company takes time and is very messy, giving competitors room to organize to make competing bids or convince the board to split of specific parts of the company. Adding to the normal premiums are the current market conditions and the vast sums of liquid assets large tech companies are sitting on. Firstly the general market is down which usually means shares of healthy companies are "undervalued" (difficult to tell if they really are, but that's the consensus). Secondly liquid assets are "expensive" to own at the moment, some banks are charging negative interest on large deposits and bonds are sitting at around 0%. If you're a tech company sitting on huge piles of cash this means you want to spend that money on anything as long as it gives more than 0% interest. Shareholders know that companies have a lot of money to spend so they can demand very high premiums. Google bought Motorola mobility at a 63% premium so HP buying at 79% isn't all that strange. I wouldn't be surprised if Apple and Microsoft aren't also considering some big takeovers (GIGAOM reported that microsoft was also considering buyingMotorola) because this is the time to get get rid of those big piles of money they have.
  - scottishing 15y ago
    This sounds good and perhaps you have some financial experience to back this up, but I fundamentally disagree. At some point even a complex sale is just that...a sale, and this one is so questionable that anyone ignoring details like you put forth anyone would question this. Let alone the rumors of AU being a house of cards- in this market, HP should have walked and probably could have purchased AU for under $5B and the AU management would have run for the hills with the cash. Bottom line- it's a total enigma...time will tell!
sceptre 15y ago
As an ex employee of Autonomy, i must say that its actually good news for the employees. I spoke to my ex-colleagues and they sounded upbeat. Autonomy was a sweat shop. You were paid pittance and employees outside cambridge were hardly recognized. It was one of the worst companies to work for.
- andrewljohnson 15y ago
  Well, HP supposedly used to be one of the best places to work, so maybe if you mix heaven and hell, you'll end up with purgatory.
- cubicle67 15y ago
  I left EDS just before HP bought them out. Shortly after HP laid off a heap of my (former) colleagues. Anyone know how the HP/EDS thing is going now?
AlexMuir 15y ago
I've always thought that Autonomy had a strong whiff of fraud about it. I never hear anyone talk about working there, their financial reporting is often shadier than Groupon's, there's a Madoff-esque figure at the top (in the sense that he seems to be treated as almost godlike), and no-one seems to use its products. I know it powers the FT's search facility and they joke about how useless it is. My only explanation has been that it perhaps has a heavy focus on intelligence work. I hope HP are prepared for some lengthy due diligence.
- paulsilver 15y ago
  I've met a couple of people who've worked there, one was quite bitchy about working conditions but you could get that at any company. About 2000-2001 the company I was working for tried to buy a license to use their search software on our internal documents. It all fell apart for various reasons, including a price tag that was well in to six figures (Sterling) may even have been almost £1,000,000 my memory fails me as it wasn't going to be a good fit for our project anyway (long story.) The tech they had then was very impressive when demoed, and I've heard even more amazing things about it since, but again, all in demos. I've not used the software direct, partly because I haven't worked for companies that could afford to use it.
  - jgmatpdx 15y ago
    Autonomy is very good at selling demos for prices at and above what you're listing there. I spent some time there in consulting, which amounted to attempting to convince customers that the demos they'd bought actually existed. In general, the demos were mixes of Perl and JavaScript that barely held together for the length of the demo, let alone scaled. Autonomy did have some internal large-scale success stories, but they tended to involve heroic (and large uncompensated) work after the sale and customers who were willing to repeatedly threaten to sue until said work was done.
- adamt 15y ago
  They have a big building here in Cambridge where they employee 170+ people. The Company has been public for a long time (first floated on EASDAQ back in about 1999). I don't think there's anything shadier about it compared to any other enterprise software company.
latch 15y ago
"The Leader in Meaning Based Computing" what does that even mean?!
- known 15y ago
  A type of PageRank.
  - benjamind 15y ago
    Not sure how true that is. At their most basic they do text classification and extraction, as well as document comparison. So you can index a whole load of documents, then train the system to recognise a particular type of document (based on any number of other training documents) and give it a specific classification. The marketing spin is that you can extract 'meaning' from a whole load of text and deduce what a document is 'about'. Its not strictly true, but you can get a close approximation of that idea with decent training sets and classifications.
d4nt 15y ago
The FT is pretty down about another UK company being sold to foreigners. Doesn't this count as an export? Haven't we just exported a $11bn asset?
- justincormack 15y ago
  Not quite the same as an export. We do get the cash yes, although we will be paying dividends abroad in the future. I think the thinking is long term they might invest less in the uk, and it is one of our larger companies. On the other hand it is a great uk startup story, we just need more of them... Though there was Xensource out of Cambridge too.
iuguy 15y ago
For a company to buy an OS for $1.2 billion, then spend a fortune on developing a new class of device only to ditch it a month after launch along with it's entire infrastructure business, to then pay a massive premium for a software company in one particular space says an awful lot about the thought processes in HP. I can only assume that whoever makes the decisions has been prescribed something very, very powerful.
- bradleyland 15y ago
  It's important to remember that there was some significant change in leadership during this sequence of events. Mark Hurd was CEO of HP at the time they bought Palm. The current CEO, Leo Apotheker, wasn't all that crazy about the product, and from what I've read in other places, was looking for a reason to can it. IMO, webOS devices didn't get a fair shot at HP. I believe that in hindsight, webOS will go down in history as one of those great operating systems that died for reasons not related to it's quality as an OS. You also have to consider that making $1.2bn back on the Palm purchase wouldn't be all that difficult right now. HP has the straight forward option of simply selling the Palm patent portfolio of 1,600 patents from a company that was in the handheld device space long before most of the current players.
  - jordan0day 15y ago
    "I believe that in hindsight, webOS will go down in history as one of those great operating systems that died for reasons not related to it's quality as an OS." Yes. I would say that webOS will more than likely be the beOS of the mobile world. Not that the two OS's are similar technologically, but in that they're both generally held in fairly high esteem but no one actually uses them.
raganwald 15y ago
Another way to look at this is that the CEO just announced plans to buy revenue. Some years from now, you will read about how revenues grew such-and-such percent under his management, and it will be up to analysts to guesstimate how much of that is due to operations and how much of that is due to acquisitions.
deleted 15y ago
[deleted]
madeinindia 15y ago
HP... Autonomy... really? http://www.glassdoor.com/Reviews/Autonomy-Reviews-E11045.htm http://www.glassdoor.com/Reviews/Autonomy-Reviews-E11045.htm
- benjamind 15y ago
  Haha! Never saw that site before, but man are those some upset employees! It certainly is a hell of a place to work as a developer. I was almost grateful for it in a way, it was my first professional developer job (they tend to hire fresh meat). But it taught me a lot about what not to do, and was a proving ground for my ability to work under pressure. I'd almost recommend doing a stint in a place like it, makes you appreciate all your jobs afterwards. :-)
4J7z0Fgt63dTZbs 15y ago
What do they make?

54 points by whyleyc 15y ago

teyc 15y ago

Has anyone here used Autonomy? It seems to be used in call centres to detect nuances in a person's words. What other type of data mining does it do?

jgmatpdx 15y ago
The call center tech was acquired; I don't suspect much of it ever had anything to do with their core product.
d4nt 15y ago
They implemented it at my last employer - a professional services business with lots of documents to search. I don't think we were really using it to its full potential though.

mootothemax 15y ago

...along with plans to spin off its personal computer business. Damn, until now I'd missed that this wasn't "only" about phones and pads; HP's planning to become a software-only company! Very saddening.

hboon 15y ago
They are still holding on to their server business it seems. So they are doubling down on their enterprise solutions and services, not unlike IBM.
qq66 15y ago
won't they still sell servers?
gaius 15y ago
The "real" HP that most people think of was spun off as Agilent. HP that's left now is a hollow shell of its former self, just holding onto the brand name. Very sad.
teyc 15y ago
According to press pundits, it is because Apotheker wants to turn HP into enterprise software+services company, like SAP and IBM.

rorrr 15y ago

Even after today's surge (+75%), its market capitalization is $6.11B. Yesterday's market cap: $3.5B. Why would HP pay 3X its market value?

Protagoras 15y ago
The normal reason for paying large premiums is that shareholders aren't interested in selling at the current market rate (otherwise in a liquid market they already would have). If you offer a small premium of say 10% investors might just think there is a better deal out there. Consequently the market value of the company may jump by 15% forcing you to make a new offer of 20% which the market still doesn't accept etc.. until you finally reach a negotiated price. From the numbers side of things this looks better for the buyer because you may end up with a lower buying price. However this way of buying a company takes time and is very messy, giving competitors room to organize to make competing bids or convince the board to split of specific parts of the company. Adding to the normal premiums are the current market conditions and the vast sums of liquid assets large tech companies are sitting on. Firstly the general market is down which usually means shares of healthy companies are "undervalued" (difficult to tell if they really are, but that's the consensus). Secondly liquid assets are "expensive" to own at the moment, some banks are charging negative interest on large deposits and bonds are sitting at around 0%. If you're a tech company sitting on huge piles of cash this means you want to spend that money on anything as long as it gives more than 0% interest. Shareholders know that companies have a lot of money to spend so they can demand very high premiums. Google bought Motorola mobility at a 63% premium so HP buying at 79% isn't all that strange. I wouldn't be surprised if Apple and Microsoft aren't also considering some big takeovers (GIGAOM reported that microsoft was also considering buyingMotorola) because this is the time to get get rid of those big piles of money they have.
- scottishing 15y ago
  This sounds good and perhaps you have some financial experience to back this up, but I fundamentally disagree. At some point even a complex sale is just that...a sale, and this one is so questionable that anyone ignoring details like you put forth anyone would question this. Let alone the rumors of AU being a house of cards- in this market, HP should have walked and probably could have purchased AU for under $5B and the AU management would have run for the hills with the cash. Bottom line- it's a total enigma...time will tell!

sceptre 15y ago

As an ex employee of Autonomy, i must say that its actually good news for the employees. I spoke to my ex-colleagues and they sounded upbeat. Autonomy was a sweat shop. You were paid pittance and employees outside cambridge were hardly recognized. It was one of the worst companies to work for.

andrewljohnson 15y ago
Well, HP supposedly used to be one of the best places to work, so maybe if you mix heaven and hell, you'll end up with purgatory.
cubicle67 15y ago
I left EDS just before HP bought them out. Shortly after HP laid off a heap of my (former) colleagues. Anyone know how the HP/EDS thing is going now?

AlexMuir 15y ago

I've always thought that Autonomy had a strong whiff of fraud about it. I never hear anyone talk about working there, their financial reporting is often shadier than Groupon's, there's a Madoff-esque figure at the top (in the sense that he seems to be treated as almost godlike), and no-one seems to use its products. I know it powers the FT's search facility and they joke about how useless it is. My only explanation has been that it perhaps has a heavy focus on intelligence work. I hope HP are prepared for some lengthy due diligence.

paulsilver 15y ago
I've met a couple of people who've worked there, one was quite bitchy about working conditions but you could get that at any company. About 2000-2001 the company I was working for tried to buy a license to use their search software on our internal documents. It all fell apart for various reasons, including a price tag that was well in to six figures (Sterling) may even have been almost £1,000,000 my memory fails me as it wasn't going to be a good fit for our project anyway (long story.) The tech they had then was very impressive when demoed, and I've heard even more amazing things about it since, but again, all in demos. I've not used the software direct, partly because I haven't worked for companies that could afford to use it.
- jgmatpdx 15y ago
  Autonomy is very good at selling demos for prices at and above what you're listing there. I spent some time there in consulting, which amounted to attempting to convince customers that the demos they'd bought actually existed. In general, the demos were mixes of Perl and JavaScript that barely held together for the length of the demo, let alone scaled. Autonomy did have some internal large-scale success stories, but they tended to involve heroic (and large uncompensated) work after the sale and customers who were willing to repeatedly threaten to sue until said work was done.
adamt 15y ago
They have a big building here in Cambridge where they employee 170+ people. The Company has been public for a long time (first floated on EASDAQ back in about 1999). I don't think there's anything shadier about it compared to any other enterprise software company.

latch 15y ago

"The Leader in Meaning Based Computing" what does that even mean?!

known 15y ago
A type of PageRank.
- benjamind 15y ago
  Not sure how true that is. At their most basic they do text classification and extraction, as well as document comparison. So you can index a whole load of documents, then train the system to recognise a particular type of document (based on any number of other training documents) and give it a specific classification. The marketing spin is that you can extract 'meaning' from a whole load of text and deduce what a document is 'about'. Its not strictly true, but you can get a close approximation of that idea with decent training sets and classifications.

d4nt 15y ago

The FT is pretty down about another UK company being sold to foreigners. Doesn't this count as an export? Haven't we just exported a $11bn asset?

justincormack 15y ago
Not quite the same as an export. We do get the cash yes, although we will be paying dividends abroad in the future. I think the thinking is long term they might invest less in the uk, and it is one of our larger companies. On the other hand it is a great uk startup story, we just need more of them... Though there was Xensource out of Cambridge too.

iuguy 15y ago

For a company to buy an OS for $1.2 billion, then spend a fortune on developing a new class of device only to ditch it a month after launch along with it's entire infrastructure business, to then pay a massive premium for a software company in one particular space says an awful lot about the thought processes in HP. I can only assume that whoever makes the decisions has been prescribed something very, very powerful.

bradleyland 15y ago
It's important to remember that there was some significant change in leadership during this sequence of events. Mark Hurd was CEO of HP at the time they bought Palm. The current CEO, Leo Apotheker, wasn't all that crazy about the product, and from what I've read in other places, was looking for a reason to can it. IMO, webOS devices didn't get a fair shot at HP. I believe that in hindsight, webOS will go down in history as one of those great operating systems that died for reasons not related to it's quality as an OS. You also have to consider that making $1.2bn back on the Palm purchase wouldn't be all that difficult right now. HP has the straight forward option of simply selling the Palm patent portfolio of 1,600 patents from a company that was in the handheld device space long before most of the current players.
- jordan0day 15y ago
  "I believe that in hindsight, webOS will go down in history as one of those great operating systems that died for reasons not related to it's quality as an OS." Yes. I would say that webOS will more than likely be the beOS of the mobile world. Not that the two OS's are similar technologically, but in that they're both generally held in fairly high esteem but no one actually uses them.

raganwald 15y ago

Another way to look at this is that the CEO just announced plans to buy revenue. Some years from now, you will read about how revenues grew such-and-such percent under his management, and it will be up to analysts to guesstimate how much of that is due to operations and how much of that is due to acquisitions.

deleted 15y ago

[deleted]

madeinindia 15y ago

HP... Autonomy... really? http://www.glassdoor.com/Reviews/Autonomy-Reviews-E11045.htm http://www.glassdoor.com/Reviews/Autonomy-Reviews-E11045.htm

benjamind 15y ago
Haha! Never saw that site before, but man are those some upset employees! It certainly is a hell of a place to work as a developer. I was almost grateful for it in a way, it was my first professional developer job (they tend to hire fresh meat). But it taught me a lot about what not to do, and was a proving ground for my ability to work under pressure. I'd almost recommend doing a stint in a place like it, makes you appreciate all your jobs afterwards. :-)

4J7z0Fgt63dTZbs 15y ago

What do they make?