Idol thoughts

HP, angry that it had to write down $5 bn on its purchase of Autonomy, has now made a breakthrough in the UK court. The court ruled that HP “substantially succeeded” in its claims against the founder and CEO of Autonomy, Mike Lynch.

Following on from the ruling, Home Secretary, Pritti Patel signed the order to have Lynch extradited to the US, where he faces criminal charges for wire fraud and securities fraud.

Putting the legal arguments of Britain’s largest fraud case to one side, look at what HP actually acquired in 2011. It certainly wasn’t a hardware business running Autonomy’s Idol system. HP’s own product brief describes Idol as a single processing layer for conceptual, contextual and real-time understanding of all data, inside and outside the enterprise.

HP’s product brief goes on to say the software offers unique pattern matching powered by statistical algorithms that recognise distance in ideas, concepts, and context in real time. Even with today’s advances, these are difficult things to achieve. It is hard to deny the attraction of buying a company with such a rich portfolio of tech gems. Imagine that over 11 years ago, it was possible to have real time analytics with a product that claimed to understand the meaning and context of all information. If data is the new oil, then such bold claims represent the pipeline and infrastructure needed to extract this data and derive measurable business value.

The value of software

Even if the technology could only be delivered partially, such advances would surely give the business acquiring this intellectual property and expertise the catalyst to kickstart a strategy to dominate the emerging era of data (see paragraph 98 of Justice Hildyard’s Summary of Conclusions)? And HP paid $11.7bn in 2011 (about $14.2bn in today’s money) for this IP. The acquisition announced HP’s reinvention as a software company.

But as Judith Hurwitz, president & CEO of Hurwitz & Associate pointed out in the 2011 article she wrote for Harvard Business Review, “Given HP’s status as the largest IT company in the world, it is shocking that it does not have a comprehensive software strategy worthy of its leadership role. But at HP it has simply never emerged.”

In fact, in 2016, it agreed to sell its software business to Micro Focus for $8.8 bn and Idol is now back in Britain as part of the Micro Focus portfolio. As for HP, it has split into two entities, HP Inc, focusing on PCs and printers, and HP Enterprise, the cloud and server business. Hindsight is a wonderful thing, Whether HPE or HP Inc become dominant forces in data remains to be seen.

Data Center
Data Management