HP Thinks It Can Turn Autonomy Around
After defeating a shareholder insurrection that largely stemmed from how it handled the Autonomy acquisition, Hewlett-Packard is trying to resuscitate the fortunes of its troubled analytics-software unit. Robert Youngjohns, senior vice president and General Manager of the Autonomy division within HP software, conceded that the controversy surrounding the acquisition and its aftermath has proven a significant distraction for the company. But he also suggested that HP management has gone to great pains to isolate the management of Autonomy from the actual litigation. "It's a noise factor that's obviously hard to ignore,” he said. “But it has been a noise factor." Still, the noise level surrounding Autonomy is not likely to quiet as long as litigation persists. Back in November 2012, HP accused Autonomy’s management team of using “accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company.” It alerted the SEC’s Enforcement Division and the United Kingdom’s Serious Fraud Office (Autonomy is based in the U.K.), and announced it would take an $8.8 billion write-down on Autonomy’s value. That sort of thing tends to generate headlines for a long time. Despite that write-down, HP isn’t giving up on Autonomy. Youngjohns described how the HP Autonomy business unit will focus on three core areas, with an emphasis on Big Data analytics: if everything goes according to HP’s plan, the Intelligent Data Operating Layer (IDOL) indexing engine at the core of the Autonomy portfolio will evolve into a layer of software leveraged by diverse analytic applications, all with the goal of finding the right data within massive datasets. “We think there is going to be huge demand for this kind of capability in a number of applications such as security and insurance fraud,” Youngjohns said. “We see it as really augmenting domain intelligence in specific areas.” HP Autonomy, he added, will also focus on information governance and Web content management: two classes of applications traditionally handled by IDOL. The former is an area that organizations can no longer afford to ignore: “When it comes to information governance and compliance it’s not so much about the costing of doing it as it is the consequences of not doing it.” At the same time, he conceded that information governance is very much an emerging field: “Clearly boundaries are starting to blur between different areas. There’s no reason for example, why there needs to be a different engines for managing backup and archiving applications.” But analysts aren’t so convinced that HP can save the Autonomy ship. “In some ways Autonomy will be like a bad penny that will keep coming back to haunt them as long the litigation persists,” said Alan Pelz-Sharpe, and industry analyst with 451 Research. “They can upsell Autonomy into the existing HP installed base, but for new license sales the Autonomy brand is a problem.” Indeed, HP could have more success selling Autonomy technology when it’s embedded inside other HP products. “Autonomy is really set of fungible products and technologies,” said Melissa Webster, an industry analyst with International Data Corp. “Everybody has already heard about the issues with Autonomy; the question now is what to do going forward.” Ultimately, any rebound in HP Autonomy’s fortunes will hinge on whether IT organizations can truly get serious about managing data as an asset. Most of those organizations aren’t particularly good at managing data—something that Youngjohns believed had more to do with the immaturity of policy-based approaches to managing data than the actual talent of the people handling that data. “Customers need to be able to index data in a way that allows them to get at the data,” he said. “Otherwise all you really wind up with is digital landfill where the data is not useful and is never likely to be useful.”