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That's a weird end to a crazy story. 2.5 month trial, completely acquitted. What's the takeaway here? Did HP make some horrible mistake and totally mismanage th

That's a weird end to a crazy story. 2.5 month trial, completely acquitted. What's the takeaway here? Did HP make some horrible mistake and totally mismanage the acquisition as alleged?

tempusalaria 2y ago
HP did limited due diligence due to their incompetence but there was definitely significant fraud at Autonomy.
- hilux 2y ago
  I'm amazed that Lynch got off. Legal technicality? Would love to see an analysis and explanation.
- seanhunter 2y ago
  Yup. For example at the time I was IT director of a doc com in the UK. Autonomy came to me and pitched their product, which was basically an enterprise-wide indexer thing which you could point at a file share and it would index all the documents, including looking inside MS Office files and then you could search it all. So quite far ahead of its time for what must have been like 1999 or so. I told them their product didn't really meet any pressing need we had and was a bit expensive so thanks but no thanks. They came back with the proposal that instead of buying the software I could buy (from them) a really expensive NAS and they would throw the indexer in for free and the advantage for me would be that because it was hardware the expenditure could be written off against tax over time as depreciation. It sounded sketchy so I didn't bite, but in essence they pitched me on the exact fraudulent thing that he was acquitted of.
  - mike_hearn 2y ago
    Wait, how is bundling hardware and software sketchy or illegal? That's the entire business model of many of the world's most successful companies.
    - foldr 2y ago
      Presumably based on intent. In the extreme case, you'd be selling someone a lettuce for a lot of money with "free" bundled software (so that they can then get some kind of tax write-off when the lettuce goes rotten).
    - seanhunter 2y ago
      Nothing sketchy about that per se, but the fraud element of the case centred around the allegation that autonomy didn't correctly account for the distinction between hardware and software sales when giving numbers to HP leading to an inflated (software based) multiple being used for the valuation at acquisition. They were (allegedly) selling expensive disk drives for cost plus and telling investors they were making a software sale which obviously have very different growth characteristics as businesses.
0xADADA 2y ago
yes, Meg Whitman
- ChuckMcM 2y ago
  Exactly, the takeaway here is that Meg Whitman had no business running HP. That said I admit I am biased against her because of the really really ill informed way she decided important technical issues.
  - x0x0 2y ago
    Just in case people don't know how stupid Meg is, she (1) acquired Skype; (2) did not acquire Skype's p2p tech; (3) fucked the Skype founders on an earn out; (4) was apparently shocked when said founders declined to renew the licensing deal for the p2p tech. What business ebay, an auctions company, had owning Skype was never explained. Discussion has mostly disappeared from the internet, but you can still find traces eg https://techcrunch.com/2009/07/31/ebay-in-litigation-with-skype-founders-over-key-technology/ https://techcrunch.com/2009/07/31/ebay-in-litigation-with-sk...
- ZiiS 2y ago
  Apotheker had already agreed the deal.
  - jgalt212 2y ago
    It was her Bay of Pigs. Literally
- jldugger 2y ago
  Did Meg Whitman make that purchase, or was it the CEO at the time, Léo Apotheker?
throwaway_20357 2y ago
Here is the timeline: https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-timeline-of-an-ma-disaster.html https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-t... Lynch was convicted in a civil case in the UK in 2022 but the damages have still not been announced yet.

That's a weird end to a crazy story. 2.5 month trial, completely acquitted. What's the takeaway here? Did HP make some horrible mistake and totally mismanage the acquisition as alleged?

tempusalaria 2y ago

HP did limited due diligence due to their incompetence but there was definitely significant fraud at Autonomy.

hilux 2y ago
I'm amazed that Lynch got off. Legal technicality? Would love to see an analysis and explanation.
seanhunter 2y ago
Yup. For example at the time I was IT director of a doc com in the UK. Autonomy came to me and pitched their product, which was basically an enterprise-wide indexer thing which you could point at a file share and it would index all the documents, including looking inside MS Office files and then you could search it all. So quite far ahead of its time for what must have been like 1999 or so. I told them their product didn't really meet any pressing need we had and was a bit expensive so thanks but no thanks. They came back with the proposal that instead of buying the software I could buy (from them) a really expensive NAS and they would throw the indexer in for free and the advantage for me would be that because it was hardware the expenditure could be written off against tax over time as depreciation. It sounded sketchy so I didn't bite, but in essence they pitched me on the exact fraudulent thing that he was acquitted of.
- mike_hearn 2y ago
  Wait, how is bundling hardware and software sketchy or illegal? That's the entire business model of many of the world's most successful companies.
  - foldr 2y ago
    Presumably based on intent. In the extreme case, you'd be selling someone a lettuce for a lot of money with "free" bundled software (so that they can then get some kind of tax write-off when the lettuce goes rotten).
  - seanhunter 2y ago
    Nothing sketchy about that per se, but the fraud element of the case centred around the allegation that autonomy didn't correctly account for the distinction between hardware and software sales when giving numbers to HP leading to an inflated (software based) multiple being used for the valuation at acquisition. They were (allegedly) selling expensive disk drives for cost plus and telling investors they were making a software sale which obviously have very different growth characteristics as businesses.

0xADADA 2y ago

yes, Meg Whitman

ChuckMcM 2y ago
Exactly, the takeaway here is that Meg Whitman had no business running HP. That said I admit I am biased against her because of the really really ill informed way she decided important technical issues.
- x0x0 2y ago
  Just in case people don't know how stupid Meg is, she (1) acquired Skype; (2) did not acquire Skype's p2p tech; (3) fucked the Skype founders on an earn out; (4) was apparently shocked when said founders declined to renew the licensing deal for the p2p tech. What business ebay, an auctions company, had owning Skype was never explained. Discussion has mostly disappeared from the internet, but you can still find traces eg https://techcrunch.com/2009/07/31/ebay-in-litigation-with-skype-founders-over-key-technology/ https://techcrunch.com/2009/07/31/ebay-in-litigation-with-sk...
ZiiS 2y ago
Apotheker had already agreed the deal.
- jgalt212 2y ago
  It was her Bay of Pigs. Literally
jldugger 2y ago
Did Meg Whitman make that purchase, or was it the CEO at the time, Léo Apotheker?

throwaway_20357 2y ago

Here is the timeline: https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-timeline-of-an-ma-disaster.html https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-t... Lynch was convicted in a civil case in the UK in 2022 but the damages have still not been announced yet.