Analysts have attacked HP’s decision to axe Mike Lynch from heading up Autonomy within the company, as part of its restructuring programme which will see 27,000 jobs get canned by 2014.
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Lynch, who founded Autonomy and turned it into one of the UK's largest technology companies before it was acquired by HP last year for $10bn, will leave after what HP called a "transition period".
He is being replaced by Bill Veghte, HP's chief strategy officer. In an earnings call CEO Meg Whitman said Veghte’s experience at Microsoft would put him in a good position to scale the product, having worked at the software giant for 20 years.
Richard Holway, co-founder of analyst firm TechMarketView, said Autonomy’s future without Lynch would be bleak “It desperately sad to see a fine company destroyed in this manner. I’m confident Lynch will come back,” he said. “It’s not just him that has gone but most of team has gone. This is like General Motors taking control of an F1 racing team.”
John Madden, principal analyst at Ovum, said HP’s decision to let Lynch leave was counter-intuitive, given his reputation as an innovator and HP’s intention to ramp up its R&D side. “We are still really waiting to see a long-term vision for HP,” he said.
Tim Jennings, chief IT analyst at Ovum, agreed: “Lynch is a technology visionary, and parting company on the basis of poor sales execution in the division, indicates that HP has struggled to create a clear vision for how to leverage its very expensive acquisition.
He added: "HP would have been better advised to utilise Lynch’s talent across all of its software business, rather than to allow him to remain at arm’s length, and subsequently land him with the blame for poor sales execution."