The Channel logo

back to article Autonomy to HP: bollocks

The HP-Autonomy spat has, predictably, turned into a high-profile slanging match, with Autonomy founder Mike Lynch firing back at Meg Whitman via the Wall Street Journal. Hewlett-Packard has sensationally written down the value of the software company it acquired last year by nearly $US9 billion, and blamed Autonomy for “ …

COMMENTS

This topic is closed for new posts.

Page:

Silver badge

HP = twats

Everything I read about this takeover at the time said HP were mad to pay the price they were paying. They are now screaming sour grapes, and trying to recoup some cash.

20
0
Anonymous Coward

Re: HP = twats

They should have stuck to making brown sauce.

27
0

Re: HP = twats

yeah true .. when they branched out to Fruity, Bold and BBQ versions things went a bit wrong and don't get me started on HP Guinness!

5
0
Silver badge

Re: HP = twats

Well, HP brown sauce is in the same category as Twinkies. And Twinkies are dead now.

1
0
Silver badge
Unhappy

Re: Re: HP = twats

"....HP brown sauce is in the same category as Twinkies...." I'm a bad Englishman because I think I'd miss Twinkies more than brown sauce.

0
4
Silver badge
Boffin

Re: HP = twats but Twinkies will live on...

Sorry, but when Interstate bakeries goes belly up, they will sell off the brands.

They will appear under a different name.

0
0
Flame

Re: HP = twats

HP to SEC. " We screwed up, and lost a bundle of cash from the US economy. However, we have these convenient British scapegoats - can you get the money back for us please? You can always extradite the former management and owners if that helps.

18
0
Silver badge

Re: HP = twats but Twinkies will live on...

> They will sell off the brands.

They will sell off the brands. But they won't sell off the jobs.

0
0
Bronze badge

Autonomy admitted fault

It was an executive at Autonomy themselves that raised this accounting issue to HP earlier this year, after Whitman fired the former Autonomy leadership.

The leadership was fired after they missed their own targets.

When the whistle blower blew the whistle they investigated and I guess they just recently completed the investigation.

interview with Whitman:

http://www.cnbc.com/id/15840232/?video=3000130511&play=1

Most people believed this acquisition was bad from the start.

2
0
Silver badge
Meh

Re: Autonomy admitted fault

"It was an executive at Autonomy themselves that raised this accounting issue to HP earlier this year"

Let's see if they'll stand up in court and publicly make that accusation then, and also let's see if they really are an "executive".

Moreover, if they were so convinced that this was going on, why didn't they notify the UK authorities that they were aware of this fraud?

3
0
Anonymous Coward

Just because the Hewlett Packard board

Just because the Hewlett Packard board are (clearly) pillocks, and have been for years, it doesn't necessarily follow that the Autonomy purchase didn't involve dodgy dealing.

Hewlett Packard. That's what BBC R4 News were calling HP at 6pm this evening.

Where's Matt?

0
0
Silver badge
Alert

Re: Just because the Hewlett Packard board

".....Where's Matt?" Chasing friends in low places for an unofficial response out of KPMG. ;)

2
2
Silver badge

I remember ...

... the consensus here on the Reg was that the valuation was mad. Yet all the experts, KPMG and the usual suspects, and HPs own due diligence team, were sure that it was fine. More recently the commentard consensus seemed to be much more accurate than 'the professionals' re: facebook.

Amazing how the people who are paid to get it right can get it so wrong, often at so little cost to themselves personally, however much it costs their corporations.

16
0
Silver badge

Re: I remember ...

Good, healthy ripostes though. I'm waiting for them to cast the movie.

1
0
Silver badge
FAIL

Re: I remember ...

Larry Ellison turned it down at 1/3 the price.

Larry is an asshole, but he isn't stupid.

(http://www.marketwire.com/press-release/oracle-issues-statement-nasdaq-orcl-1566697.htm)

fail, meg, fail

7
1
Silver badge

Re: I remember ...

sorry, that should have been 2/3s

0
0

Re: I remember ...

You rise in consulting and management by telling the boss/customer what they want to here.

Eventually this results in an echo chamber where only good news and predictions bright sunny futures are heard. Plus a smattering of "lets reduce headcount" so they can feel macho as well as brilliant.

This all works splendidly until the innocent lad asks why the emperor is naked, or, the shareholders ask to see the money.

Anyway serves the septics right, They unload there Sub-Prime mortgages on our banks, we unload our super-hyped startup on them.

6
0
Silver badge
FAIL

Re: I remember ...

"Amazing how the people who are paid to get it right..."

That's the nub of it right there. They are paid to deliver a certain result and if inconvenient facts get in the way of their payday, why then, they'll just ignore them.

If they are wrong then they can just shrug their shoulders and walk off, if they are right then they are the "experts".

Either way they will be paid their fees.

0
0
Silver badge
FAIL

Re: Re: I remember ...

"...fail, meg, fail" Autonomy was bought by Shane Robison under Leo's guidance and mandate. Meg didn't arrive until later. Fail, commentard, fail!

0
2
Silver badge
Facepalm

Meg's fail

Ahh, but Leo isn't crying about how unfailr it is. Meg is. A stupid deal was made without due diligence. Just admit it, and get to work fixing things. Don't cry "it's unfair, we didn't know it was a bad deal," you say, "this was a fuckup, but I am here to make sure these types of things don't contenue."

Sorry for not spelling that out well enough for you, Matt.

0
1
Silver badge
Stop

Re: Meg's fail

"Ahh, but Leo isn't crying about how unfailr it is...." Well are you surprised? He no longer works at hp, he was given theboot and a golden parachute. He's probably laughing all the way to the bank.

"....Meg is...." Well it IS her job to do so. By law, she has to declare any accounting shennigans that may be fraudulent.

".... A stupid deal was made without due diligence...." Whether the deal was stupid is debateable, but due dilligence was tried. It appears that Deloitte or KPMG or Shane Robison are the ones that failed to do their jobs.

"....Just admit it...." What, that you're wrong?

"....and get to work fixing things...." Sorry, not my job. Whilst hp might be able to afford me I'm not legally qualified to go sorting through Autnomy's acounts and try clawing back and cash in court. Mind you, Leo probably wasn't qualified for his job either, but I posted on these forums at the time I thought so. Maybe I should give Meg a call....

"....Sorry for not spelling that out well enough for you, Matt." Oh, don't worry, it came though loud and clear that your desire for screaming abuse at hp far surpasses that for rational analysis.

0
2
Anonymous Coward

HP & Advisors Either Incompetent or Doubly Incompetent

Autonomy was a good business, HP needed more software in their portfolio and proportionately less hardware. However, HP spectacularly overpaid, fraud or not. I expect they were poorly advised (clue: 5% of $10.7B is worth a lot more than 5% of say $1B).

If (and I mean IF) Autonomy management are guilty of what HP accues them (channel stuffing, revenue recognition naughtiness, and product cross-subsidy) then HP and their advisors simply look doubly incompetent. These are the oldest tricks in the book and I would expect the average analyst in his 1st year M&A work to know about them and go hunting for them when crawling over the company.

13
0
Bronze badge

Re: HP & Advisors Either Incompetent or Doubly Incompetent

From what I heard part of the revalations was that the margins on Autonomy ended up being much lower than originally thought (post accounting shenanigans). Originally deemed in the upper 40s to 50% range now it's in the upper 20s to 30% range.

That alone apparently would of been enough to slash it's valuation. From what I heard earlier today anyway - not my area of expertise of course.

I suspected something was up not long ago when HP started doing quite a bit of lay-offs of Autonomy folks.

2
0
Anonymous Coward

Re: HP & Advisors Either Incompetent or Doubly Incompetent

I think Autonomy and their investment bankers came in and told the HP management team that Autonomy would not only be "Google for the enterprise", but, bonus, it was also "in the cloud." As soon as they heard Google and cloud, no price was too high to pay.

5
0
Bronze badge
Trollface

Assumptions

I assume they'll be able to write off a load of tax payments against it?

0
0
Silver badge

Re: Assumptions

What tax?

1
0
Silver badge
Facepalm

Based on what I know of Autonomy...

None of this about shambolic management and cooked books would surprise me. What would surprise me is how HP's due diligence missed it.

4
0
Silver badge
Boffin

Re: Based on what I know of Autonomy...

".... how HP's due diligence missed it." HP hired KPMG to do due dilligence, so the actual question should be why KPMG missed it. I can understand why Leo didn't want to see it, he was so intent on building a vehicle to smack back at Larry, but what's KPMG's excuse?

6
1
Anonymous Coward

Re: Based on what I know of Autonomy...

Even if you assume everything HP is saying is the truth, which I don't... it seems to be a pass the blame attempt, we are talking about discrepancies in the millions of dollars. HP wrote off $8.8 billion. Are they honestly saying that, if not for Autonomy including hardware in IDOL's revenues and a few other minor things, the company would have been worth $8.8 billion more. The accounting claims, in total, probably equate to generously a billion dollars in valuation... so then it was a $7.8 billion overpayment. It is a question of magnitude. HP's problem is that even if Autonomy's books were without a comma out of place, they still over paid by several billion dollars, which is what everyone said the day they announced the acquisition.

7
0
Alert

Re: Based on what I know of Autonomy...

As someone who often had to go into organisations who had bought Autonomy and then discovered it didn't do what was on the tin, my major surprise is that took this long.

Autonomy were well known in the information business as an outfit who sold gullible senior management the idea that funneling all your 'information' into Autonomy got you a lovely indexed and organised result. NO!

What you got was a piece of expensive software and the requirement to buy sufficient paid for consultancy to make it seem to work. Sounds familiar? recognise the scam?? How many other software packs can you name that fit the bill??

Autonomy was touted about for quite a while before HP bit it. The 'due diligence' would have looked at what Autonomy booked the revenues as, the sum of the software sale plus the counsultancy plus the addons, then added a sum for 'goodwill' leading to a $ big number and then add 'cloud' 'new market opening for HP' etc., etc. and your in the $bn stuff before you can draw breath.

Finally, bear in mind that our friends in the banking community, those paragons of business acumen, lent HP the necessary funds..... and bingo.

2
0

Re: Based on what I know of Autonomy...

"what's KPMG's excuse?"

the man who did not want to see it signed their pay cheque so they told him what he wanted to hear.

Have we not seen all this before with Anderson Consulting and Enron?

1
0
Bronze badge
Pint

Good Test Equipment

I think that they should get back to their core competency: audio oscillators.

7
0
Anonymous Coward

Re: Good Test Equipment

They hived that off as Agilent didn't they?

Now all they have are printer ink and pass through profits on PCs, plus the revolving door of titsup purchases of other companies.

Should have given Agilent the HP name I always thought. But no one asked me.

2
0

Re: Good Test Equipment

Ah, that would be Agilent.

Today, I deposited the money they sent me for owning some of their stock. I own three times as much HP, but all I expect from that is some "shoft lavatory paper" at this rate.

Time to flush HPs board, at the very least.

2
0
Thumb Up

Re: Good Test Equipment

When they had a "name the new company" deal going at HP before it was split off, I turned in a sheet reading "Hewlett-Packard". They asked me, and I told them just what you would have. FWIW.

0
0
Gold badge
Pint

Re: Good Test Equipment

"I think that they should get back to their core competency: audio oscillators."

That's a bit unfair.

They made some nice GC/MS kit as well.

And the calculators were pretty nice too.

0
0
Silver badge

There are some excellent soft calculators

My favourite is the HP-42S, which has finally made my physical HP-32S redundant after many years of faithful service. For the hardcore there's Droid48, but that suffers from the physical limitations of the real calculator, which supported so many functions that it required about 3 key presses to select each one.

1
0
Silver badge

Re: Good Test Equipment

"I think that they should get back to their core competency: audio oscillators."

Depends how far you go back, doesn't it? Looks to me like HP's core competency for many years now has been board room revolving doors and payments for failure, over-paying for acquisitions, mismanaging both acquisitions and original core businesses, and destroying sharehoolder value.

They really ought to get that written out in flowery langugage and put on their website as a "mission statement". Arguably they could talk about building shareholder value, so long as there is a footnote that says in small print "We mean other companies' shareholders"

2
0
Silver badge

I expect both are true.

HP paid way too much for it.

Then squeezed the life out of what they did get.

Now they want to pass the blame.

3
0
PTR

It was blindingly obvious that they overpaid for it.

Then HP did what HP do, take something that works, and totally destroy it.

EDS

Palm

Autonomy

etc

5
0
Anonymous Coward

*cough*

EDS worked?

1
0
Silver badge
Boffin

If true, Deloitte is SoL

Anderson was felled by Enron.

Delloite can be felled by this since they were the auditors.

1
0
Headmaster

Re: If true, Deloitte is SoL

Please it was "Arthur Andersen" (gotta defend the Clan Name!)

3
0
Silver badge

Re: If true, Deloitte is SoL

According to the rest of the commentards it was KPMG who did the due diligence.

0
0
Silver badge

Re: If true, Deloitte is SoL@Gordon 10

"According to the rest of the commentards it was KPMG who did the due diligence."

Well both are liable. But KPMG would "merely" be guilty of breach of contract/professional nedligence, but Deloitte would probably be accused of being complicit in fraud (in the event that the accounts were materially manipulated). Arthur Anderson collapsed because they were in the position that Deloitte's would be (if HP's pathetic whnings are true).

Note that the audit market is now every bit as concentrated as it was at the time of Enron, so (for example) in the UK the smallest of the top 4 firms is about three times the size of the next nearest competitor. This means big listed companies almost always stick with a big four firm, so I can't see either KPMG or Deloitte going down on these accusations.

0
0

They've got previous...

EDS, Palm, Compaq, DEC, Tandem, Skype

4
2
Gold badge

Re: They've got previous...

Didn't Skype go to Microsoft?

0
0
Anonymous Coward

Re: They've got previous...

He's confusing Meg Whitman and HP. Meg ran ebay when they bought Skype, for reasons still unknown to everybody.

2
0
Silver badge

Re: They've got previous...

DEC was bought by Compaq before Compaq was bought by HP.

2
0

digging deeper

Skype was a stella purchase by one of the cast members.

I'm just reading http://tech.fortune.cnn.com/2012/05/08/500-hp-apotheker/ it is a bit long, but quite an expose of the Dark Princes on the HP Board. Does the term necrophilia apply to this situation?

0
0

Page:

This topic is closed for new posts.

Opinion

Lightning

Jack Clark

Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Microsoft CEO Satya Nadella
ARA_LIbertad

Chris Mellor

Elliott Management sinks its teeth into retiring godhead

Features

Failure to crack next-gen semiconductors threatens to set back humanity
SMEs get lip service - what they need is dinner at the Club
SAP Match Insights
Vorsprung durch grossendatatechnik, as we like to say in Germany
Inside the Google Lab where surgeons prepare the human/dog experiment
Big Blue exec tells El Reg what to keep an eye on