|By Maureen O'Gara||
|November 23, 2012 10:00 AM EST||
When Hewlett-Packard CEO Meg Whitman stunned practically everyone within earshot early Tuesday morning by accusing the company's year-old Autonomy acquisition of ripping off HP with phony financials, she said that after she bounced Autonomy's founder out of HP in late April a senior member of Autonomy's staff owned up to the fraud.
She didn't identify the informant, giving Autonomy founder Mike Lynch the opportunity to tell the press that he couldn't possibly imagine who she meant since he was the last senior manager to leave after HP ran everybody else off.
Apparently he didn't count noses all that well.
An informed source says the left-behind informant - and there may have actually been two - told HP that the bogeys Lynch set couldn't be met because they were based on a fiction.
Lynch himself was reportedly fired for missing his forecast by 20%, a sin Meg found insupportable. She supposedly dumped him to set an example. He blamed HP and its rules for it after he heroically tried to keep Autonomy away from HP's bureaucracy because its culture was "special," a device that worked with Meg initially.
Lynch, who categorically denies HP's allegations, told the press late Tuesday that he was "ambushed" by HP's charges, and had no details because he wasn't informed beforehand or contacted by any lawyers or regulators. All he knew was what was in the HP press release and didn't know what Whitman was talking about but was sure it could all be explained.
He ducked behind Deloitte, which he said audited Autonomy's results quarterly, and claimed his books were in line with international accounting standards, which, he said, may be different from US rules.
However, HP's investigators apparently questioned Lynch and the old Autonomy management team in July and found their answers vague and "unhelpful" so he must have known something,
Still Lynch claimed that HP had had hundreds of its people and three auditors doing due diligence before the acquisition closed and said they couldn't have missed an "elephant in the room" as big as HP alleges.
Ex-HP CEO Mark Hurd apparently spied the elephant right off when Autonomy tried to shop itself to Oracle, where Hurd was co-president. Sources say the roll-up was asking $4 billion-$6 billion and Hurd figured it was worth maybe $1.5 billion. Lynch denied trying to sell Autonomy to Oracle but Oracle put his presentation on its web site.
Rejected, Autonomy and the Frank Quattrone Qatalyst crew then breezed by HP - which had already bought 3PAR from Quattrone for a ludicrous $2.35 billion, a 200% premium. They talked to CTO Shane Robison, who convinced then-CEO Leo Apotheker it was worth spending over $12 billion including debt to buy. A year later HP is writing off an amazing $8.8 billion on the adventure.
Lynch blames the "internecine" politics inside HP, its rejection of Apotheker and Robinson's strategy of dumping PCs and focusing on software, and the "coup d'état" that unseated them for his current problem.
With them gone because of the wildly unpopular Autonomy acquisition and with Whitman in charge, he claims HP mismanaged the acquisition, imposing 30% mark-ups on Autonomy software, running off established accounts, and not paying commissions on Autonomy sales but instead paying its salesmen for the competitive software they sold.
He figures Autonomy's prospects deteriorated and that's why HP took the massive write-off - to cover up its mismanagement.
He forgets Autonomy's reputation, at least in England, in the years before HP entered the picture, when it was a public company and the press and analysts were suspicious of its numbers and its vapor-y Bayesian unstructured data IDOL search technology or Intelligent Data Operating Layer, citing pretty much the same kind of "not-as-good-as-it-looks" objections HP is now complaining about.
Forrester Research says Autonomy "didn't invest in R&D; they didn't have regular software releases; they weren't transparent with a roadmap of where they were going; they didn't seek customer feedback. Customers complained, but the promise of managing all their information and making better decisions was so attractive. They bought more."
Lynch must also be aware of the rumors that have circulated about Autonomy since the HP takeover and spreading tales of users throwing out the over-hyped software or getting it for nothing, which may explain why its sales plummeted.
Forbes captures best what reporters have been up against for the last year as reports on hard-to-prove shenanigans were dangled in front of them.
It said, "Here's what my source observed personally":
"Autonomy grew through acquisitions, buying everything from storage companies like Iron Mountain to enterprise software firms like Interwoven. They'd then go to customers and offer them a deal they couldn't refuse. Say a customer had $5 million and four years left on a data-storage contract, or ‘disk,' in the trade. Autonomy would offer them, say, the same amount of storage for $4 million but structure it as a $3 million purchase of IDOL software, paid for up front, and $1 million worth of disk. The software sales dropped to the bottom line and burnished Autonomy's reputation for being a fast-growing, cutting-edge software company a la Oracle, while the revenue actually came from the low-margin, commodity storage business.
"They would basically give them software for free but shift the costs around to make it look like they got $3 million in software sales," the Forbes source, who directly observed such deals, said.
"Lynch's management team was also practiced at the art of wringing attractive-looking growth out of a string of ho-hum acquisitions. The typical strategy was to bolt IDOL and other software onto a company's existing products and try and convince customers to pay more for the ‘new' products. If that failed, they'd milk the existing customer base by halting development and outsourcing support," its source said, "using the cash from the runoff business to fund more acquisitions."
"Mike Lynch was famous for saying Autonomy never put an end-of-life on any product. But the customers were screaming."
In sales meetings, Lynch reportedly "loved to do vague and theoretical academic-type presentations to show what a visionary he was." And the product "looked like a lot of vaporware wrapped up in fancy Cambridge talk and the kind of accounting tricks managers have engaged in since the dawn of publicly traded stock."
HP's admission of being snookered means its CEO and its board, which voted for the acquisition, have put their heads on the chopping block given HP's history of incompetent management.
[session] Dovetailing DevOps and the Cloud By @CAinc | @DevOpsSummit #Cloud #DevOps #DigitalTransformation
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
Apr. 28, 2017 09:58 AM EDT
[session] The IoT Evolution Will Be Led by Novel ‘Abstraction’ By @InteractorTeam | @ThingsExpo #IoT #M2M
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
Apr. 28, 2017 09:45 AM EDT Reads: 603
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Apr. 28, 2017 09:00 AM EDT Reads: 1,089
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
Apr. 28, 2017 08:00 AM EDT Reads: 1,183
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Apr. 28, 2017 07:45 AM EDT Reads: 1,558
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Apr. 28, 2017 06:45 AM EDT Reads: 1,107
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Apr. 28, 2017 06:45 AM EDT Reads: 1,563
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
Apr. 28, 2017 06:30 AM EDT Reads: 1,403
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Apr. 28, 2017 06:15 AM EDT Reads: 1,301
In his session at 20th Cloud Expo, Scott Davis, CTO of Embotics, will discuss how automation can provide the dynamic management required to cost-effectively deliver microservices and container solutions at scale. He will discuss how flexible automation is the key to effectively bridging and seamlessly coordinating both IT and developer needs for component orchestration across disparate clouds – an increasingly important requirement at today’s multi-cloud enterprise.
Apr. 28, 2017 06:00 AM EDT Reads: 4,412
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Apr. 28, 2017 05:15 AM EDT Reads: 2,398
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
Apr. 28, 2017 03:15 AM EDT Reads: 929
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.
Apr. 28, 2017 03:00 AM EDT Reads: 6,265
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
Apr. 28, 2017 01:15 AM EDT Reads: 9,282
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor – all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Apr. 28, 2017 01:15 AM EDT Reads: 8,986
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Apr. 28, 2017 12:45 AM EDT Reads: 1,704
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
Apr. 28, 2017 12:15 AM EDT Reads: 829
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Apr. 28, 2017 12:15 AM EDT Reads: 1,425
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Apr. 28, 2017 12:00 AM EDT Reads: 16,343
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo 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 to wait for long developm...
Apr. 27, 2017 11:30 PM EDT Reads: 2,318