I’m sitting here pondering the HP acquisition of Autonomy. I can’t really make sense of it. Can you?
On the one hand it is a tacit admission that the PC hardware business is commoditised and therefore not valuable any more. IBM figure that out years ago and ditched its PC division to Lenovo. Big Blue is smart and it built an excellent services division around it – which has grown, whilst the hardware division shrinks year on year. People just don’t buy those expensive UNIX servers any more.
HP are pretty woeful right now. They’re dead in the UNIX server market – Intel is sunsetting the Itanium CPU it is built on and Oracle have removed support for it. This makes me laugh, because HP are suing Oracle over a platform that they also know is dead. What for? Presumably to show some face to their beleaguered customers.
They’ve also made some bizarre decisions in mobile – the botched Palm acquisition, the TouchPad which has a proprietary OS and isn’t selling well: Apple have them stitched in the market and Best Buy have 245,000 out of 270,000 sitting on a shelf somewhere. Or probably on a delivery lorry back to HP.
To add to this, they bought EDS (which UK magazine Private Eye called “probably the worst consultancy in the world” – like the Carlsberg ad) in 2006 – pulling it into HP Consultancy Services – but not getting anything like the traction that IBM have.
And in an interesting move this year, they employed ex-SAP CEO Leo Apotheker – who left SAP after a hellish 18 months at the helm. Leo never worked well in SAP and in the market we’ve been wondering if he would fare better in HP’s culture. I don’t think this has played out yet and we’ll see what he has to offer in coming months.
But as to the Autonomy acquisition, it just looks bizarre at first glance. It’s a standalone software company that does niche database search products and sells to some big customers. Great, it will diversify HP’s software business but I don’t see the attraction of such a niche?
Either I’m missing something and it is an Apotheker stroke of genius, or HP made a bad call employing him. Let’s sit on the sideline and see how it plays out in 6 months from now. Because HP has already lost 25% of its stock value in 2011 and if this is another bad business decision, HP will pay dearly.