Welcome!

Log Management Authors: Dana Gardner, Pat Romanski, Elizabeth White, David H Deans, Carmen Gonzalez

Related Topics: Containers Expo Blog, Java IoT, Microservices Expo, Agile Computing, Log Management, @CloudExpo

Containers Expo Blog: Article

How HP Wound Up with Autonomy: Reuters

HP CFO Cathie Lesjak was apparently the only person to question HP’s ability to pay all that money for Autonomy

Before former HP CEO Leo Apotheker, who had no obvious qualifications to run HP but was hungry to transform it, went after Autonomy, he tried to buy Comverse Technology, Tibco and Amdocs despite the fact that most of HP's acquisitions have come to grief.

According to a Reuters source, HP backed off Comverse because it wasn't current with its published accounts and was previously involved in an options accounting scandal, which almost sounds laughable considering the mess HP claims it subsequently got into.

HP supposedly couldn't agree on a price with Tibco, and Amdocs snubbed it, saying the timing wasn't right.

And that's how Apotheker and former HP chief strategy officer Shane Robison, also credited with being the architect of HP's troubled EDS acquisition, came to have lunch with Autonomy founder Mike Lynch in Deauville on the Normandy coast in July of 2011.

They didn't agreed on a price - that took a few more weeks and the fine hand of Frank Quattrone's Qatalyst Partners - but when they got up they shook hands on what would become an $11.1 billion deal, Reuters said after talking to nearly a dozen people directly connected with the deal or the current accounting investigation.

It reckons Apotheker, who told the board "we have to do something," was frustrated and HP was "so desperate to plot a new course that it may have been far too accepting of Autonomy's published and audited accounts."

HP chairman Ray Lane encouraged the deal, but pushed the final decision off onto Apotheker and Robison, who pitched the deal internally and was reportedly instrumental in getting it finalized.

Ahead of the acquisition a due diligence team of hundreds of people, including HP staffers and external accountants, lawyers and bankers, went over Autonomy's books, examined its contracts and interviewed Autonomy's top executives. The process was reportedly seen as being pretty straightforward since Autonomy had filed its accounts publicly and they had been audited.

At the same time, HP reportedly quizzed Lynch and Autonomy CFO Sushovan Hussain about reports going back to at least 2009 that their accounting was dicey. Apparently they explained such rumors away.

Still famed short seller Jim Chanos had identified Autonomy as a shorting opportunity because its reported margins of around 50% didn't seem to translate into cash flow and its reported double-digit growth in software license revenue seemed odd when rivals were experiencing shrinking sales.

HP CFO Cathie Lesjak was apparently the only person to question HP's ability to pay all that money for Autonomy and wonder if the acquisition could actually be integrated.

After the deal went through, Lynch, who's got quite an ego, reportedly had a problem accepting his subordinate position and tried to keep HP and its red tape at bay.

Meg had had enough by May and fired him. He came back in June to talk about his severance only to be met with questions about Autonomy's accounting from HP house counsel John Schultz. Lynch reportedly said he either couldn't remember the specifics or that Deloitte, its auditor, signed off on various items, claims that are said to be "far-fetched" given Lynch's hold over the company.

Lynch's spokeswoman claimed that the allegations HP made last week "were not put to him in June."

HP last week threatened legal action against Autonomy managers without naming names

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

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
SYS-CON Events announced today that DatacenterDynamics has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to great conferences, helping you discover new conferences and increase your return on investment.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER gives detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPOalso offers sp...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time t...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...