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HP Tosses Autonomy Boss (Updated)

Ex-CEO Mike Lynch will be replaced by HP chief strategic officer and software head Bill Veghte

Complaining of a “significant decline in core licensing revenue” at its wildly over-priced $10.2 billion British acquisition – $12 billion something if you throw in the debt – HP is parting with Autonomy’s founder and ex-CEO Mike Lynch.

He will be replaced by HP’s chief strategic officer and software head Bill Veghte, the Microsoft émigré closely tied to Windows.

Given the money it spent buying Autonomy – which was supposedly profitable when it got it – it’s a business HP has got to make work even it isn’t all that it was cracked up to be.

HP CEO Meg Whitman claimed during her conference call with Wall Street Wednesday when the company posted its latest numbers and confirmed that it would let 27,000 people go that the problem wasn’t with the product or with demand or with some business-leeching competition – at least in the cloud.

Without really explaining what went wrong she said Autonomy needed “organizational changes,” the “right processes,” “interfaces with HP” and “discipline.” It needed “to scale,” she said, adding that any fix will take a couple quarters.

She never specifically said that she was talking about IDOL, the unstructured search widgetry that HP bought Autonomy for. Autonomy has like 30 other products.

By the time she got to CNBC Thursday morning Meg was saying that the fault was with Autonomy’s execution. HP brought Autonomy big deals and apparently Autonomy couldn’t close them, making one suspect the fault might be with the product after all.

Our sources at HP, who confirmed she was talking about IDOL deal, say IDOL is too hard to use and that big-time accounts have thrown it out. They challenged us to find a successful implementation of IDOL and said that Accenture had tried to set up a practice around it and couldn’t. IBM and Oracle both passed on buying Autonomy – at least at Lynch’s price.

They also said that Autonomy used an aggressive form of revenue recognition and when it used the American way the “numbers evaporated.”

And HP is hoping to use this widgetry across its lines of business.

Meg is harnessed with stuff because her ousted predecessor Léo Apotheker wanted it at any price. Chairman Ray Lane and then-CTO Shane Robison, both of whom should have known better, supported the move.

Lynch is supposed to stick around for a transition period.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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