The Autonomy acquisition was supposed to be a signature accomplishment for Apotheker, helping HP become a significant player in the lucrative enterprise software market. Instead, more than a year after his departure from HP, Apotheker finds himself amid a slew of controversy over the deal.
In a statement Tuesday, he said he was "both stunned and disappointed" to learn of Autonomy's alleged wrongdoing, and will make himself available to help HP and authorities complete their investigations.
Mike Lynch: HP has said it will pursue legal actions against "certain parties," one of whom may end up being Autonomy founder Lynch. For his part, Lynch told a BBC reporter on Tuesday that he and his former team at Autonomy totally rejected the allegations and that they were totally untrue. HP's claims are even harder to believe given how long officials spent mulling Autonomy's finances before the takeover, Lynch said.
The Autonomy nameand products: Autonomy makes infrastructure software in areas such as data management, search and archiving. Coupled with HP servers and services, the goal was to create a powerhouse business unit.
Those plans were already coming together slower than HP had hoped, and it's not clear whether customers will end up spooked by the accounting scandal. "I would have to say this is the kind of event that could badly if not fatally taint a brand going forward," said Pund-IT's King.
The fraud scandal "probably will" affect Autonomy's fortunes "and I think that's a shame," said analyst Alan Pelz-Sharpe of 451 Research. "Autonomy always had very good technology, but they weren't able to leverage it very effectively. In HP's hands, it could be leveraged much better."
On the other hand, Autonomy was "acting as a holding company to a large extent, anyway," following many acquisitions. Only its core IDOL product is quite closely linked to the Autonomy name, Pelz-Sharpe said. "There are some good pieces there and still some strong brands."
Autonomy's customers: "The real subtext to this whole thing is that the Autonomy brand in customers' minds was already pretty damaged," said Real Story Group's Byrne. "If [HP] had gone out and talked to Autonomy customers [before the acquisition] they would have found unusually disgruntled customers even by enterprise standards."
"Autonomy was very good at concealing this through very aggressive PR and analyst relations," Byrne added. "There was a day of reckoning coming for them, and they found someone to take them off the table before that happened."
Some of Autonomy's technology is very old and in need of an overhaul, Byrne said. "It was HP's very difficult job when they acquired it to make a big R&D push and turn a lot of these platforms around. I think they hesitated a little, and this is another pretty big dent in things."
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