Although HP wouldn't acknowledge the pending acquisition, it did confirm in its earnings news release that it is in discussions about some major strategic direction changes.
When Hewlett-Packard's board
of directors selected former SAP CEO Leo Apotheker as its new leader to replace
Mark Hurd in September 2010, they knew exactly what they were doing; they
hand-picked a career software veteran to transform their longtime hardware
maker into a software and services company for the 21st century.
They have moved aggressively
to buy software companies, including Vertica and Fortify among others,
since Apotheker came aboard. Now it was widely reported Aug. 18 that it is
about to buy a very big fish, U.K.-based Autonomy, here in August 2011.
Although HP wouldn't
acknowledge the pending acquisition, it did confirm in its earnings news
release that it is in discussions with Autonomy regarding a possible offer for
Apotheker has said several
times that he wants the company to expand its scope in software and services
that deliver computing power via the cloud. On the hardware side, HP has been
focusing more of its energies on servers and storage and lessening its
attention on desktop and laptop PCs-largely because the desktop and laptop
market has stalled and margins are eroding in the face of skyrocketing tablet
Considering Spinoff of Personal Systems Group
In coordination with that
possible acquisition, HP was also reported preparing to spin off its personal
computer business-known as the Personal Systems Group-to another vendor, along the
same lines as IBM did in 2005, when it sold its entire personal computer
business to Lenovo.
The statement read: "HP
reported that it plans to announce that its board of directors has authorized
the exploration of strategic alternatives for its Personal Systems Group (PSG).
HP will consider a broad range of options that may include, among others, a
full or partial separation of PSG from HP through a spinoff or other
Finally, in a day that may
prove to be historic in HP's 70-plus-year run, it announced that it was killing
its webOS mobile operating system, on which it had spent a great deal of time,
effort and money on developing and promoting.
Less than two years after it
acquired Palm for $1.2 billion, and only a few months after unveiling ambitious
hardware plans centered on Palm's webOS, Hewlett-Packard
it was killing that strategy with extreme prejudice.
Huge News Day for HP
Some news day for
Hewlett-Packard. Initial reactions were many and varied.
"If HP spins off their
PC business ... maybe they will call it Compaq?" tweeted Dell CEO Michael
Dell on Aug. 18.
"If the rumors are true
[about Autonomy], then HP stands to add a substantial software company to
complement Vertica and 3PAR, for instance," Charles King, primary analyst
at Pund-IT, told eWEEK.
interesting company. They can provide the search analytics at the big data-type
software layer that HP lacks right now."
"On the product side,
it will mean some serious portfolio rationalization," Enterprise Strategy
Group e-discovery analyst Katey Wood wrote in her blog
"In archiving, Autonomy possesses its Zantaz archiving line, including Digital
Safe, the acquired Information Governance assets of CA, and now Mimosa
following the recent acquisition of Iron Mountain's digital assets, while HP
has its own Integrated Archiving Platform. In records management, HP has
TRIM where Autonomy has Meridio and iManage content management from its
acquisition of Interwoven.
"But like the Brady
Bunch, this group must somehow form a family. ... Hold onto your e-discovery
The move to add Autonomy, if
it happens, is a clear indicator where HP intends to go in the future. Autonomy
is an aggressive, diversified, sales-driven company also bent on acquisitions
and which has been described as a "shark that needs to keep moving and
being fed in order to stay alive," one analyst who asked not to be
identified told eWEEK.
Well, an even bigger
shark-the world's largest IT company by revenue-may be about to swallow it.
What Autonomy Does
was founded as a result of research and development at Cambridge University. It
is a fast-growing, multifaceted IT company that put itself on the global
storage map by acquiring
Iron Mountain's digital archiving
, e-discovery and online backup business
for $380 million in cash in May 2011.
The move propelled Autonomy,
which mostly has been known within the business and legal communities for its
widely deployed and respected analytics and e-discovery systems, into the mix
as one of the world's top 10 data-protection providers.
Autonomy has been quietly
gathering the pieces it needs to become a big-time digital content handler. In
2005 Autonomy acquired Verity, one of its main competitors, for approximately
$500 million. In July 2007 it acquired Zantaz, an email archiving and
litigation support company, for $375 million.
It bought Web content
management provider Interwoven, a niche provider of enterprise content
management software, for $775 million in 2009. In June 2010, the company
acquired the information governance business of CA Technologies; terms of that
sale were not disclosed.
Autonomy, with a market cap
of $7 billion, is the second-largest pure software company in Europe (behind
Germany's SAP) and has offices worldwide. Its customers include T-Mobile,
Exxon, Toyota, Nestle, McGraw-Hill, General Motors, Federal Express, Sony,
Kaiser Permanente, the U.S. Department of Defense and a number of other Fortune