Featured Articles

Analysts expect ARM to do well next year

Analysts expect ARM to do well next year

British chip designer ARM could cash in on the mobile industry's rush to transition to 64-bit operating systems and hardware.

More...
Huawei and Xiaomi outpace Lenovo, LG in smartphone market

Huawei and Xiaomi outpace Lenovo, LG in smartphone market

Samsung has lost smartphone market share, ending the quarter on a low note and Xiaomi appears to be the big winner.

More...
Intel Broadwell 15W coming to CES

Intel Broadwell 15W coming to CES

It looks like Intel will be showing off its 14nm processors, codenames Broadwell, in a couple of weeks at CES 2015.

More...
Gainward GTX 980 Phantom reviewed

Gainward GTX 980 Phantom reviewed

Today we’ll be taking a closer look at the recently introduced Gainward GTX 980 4GB with the company’s trademark Phantom cooler.

More...
Zotac ZBOX Sphere OI520 barebones vs Sphere Plus review

Zotac ZBOX Sphere OI520 barebones vs Sphere Plus review

Zotac has been in the nettop and mini-PC space for more than four years now and it has managed to carve…

More...
Frontpage Slideshow | Copyright © 2006-2010 orks, a business unit of Nuevvo Webware Ltd.
Wednesday, 21 November 2012 10:32

Autonomy is IT industry's Enron

Written by Nick Farrell



HP bought a lemon


HP has admitted that it was suckered when it wrote a cheque for  $11 billion to buy British accountancy firm Autonomy. The scandal is fast turning into the IT Industry's Enron as Autonomy appears to have little value and its key software product vapourware.

Yesterday HP CEO Meg Whitman wrote 80 per cent of the purchase price for Autonomy and accused “some former members of Autonomy’s management team” of using “accounting improprieties, misrepresentations and disclosure failures” to hide what the company was doing. Autonomy was bought by HP CEO Leo Apotheker who wanted to dump PCs and hardware and become a software company, like SAP.

According to Forbes, Autonomy was based around some dodgy accounting. Founded by Michael Lynch, a Cambridge-educated computer scientist who based the outfit some Bayesian search technology he had developed called IDOL. IDOL was a souped up search engine and not something you would base an entire mega-company around. Autonomy grew by buying storage companies like Iron Mountain and enterprise software firms like Interwoven. It would then go to customers and offer then storage but structure it as a $3 million purchase of IDOL software, paid for up front.

So while it appeared to be a software company, Autonomy was really just a low-margin, commodity storage business. The IDOL software was given to companies for free, but the costs were shifted around to make it look like they had bought $3 million in software sales. HP has handed over details of its forensic accounting to fraud officials in the US and the UK. Lynch has not said anything and is probably laying low.

Sadly this is the sort of cash that HP cannot afford to spend at the moment. Wall Street had been hoping that Autonomy’s business could help pull HP out of trouble.

Last modified on Wednesday, 21 November 2012 13:11

Nick Farrell

E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
blog comments powered by Disqus

 

Facebook activity

Latest Commented Articles

Recent Comments