Sounds like typical buyers remorse.
"How dare, HOW DARE they let me waltz in here and buy this whilst screaming 'Shut up and take my money!', when they knew I was an idiot!"
Another week, another round in the ongoing bunfight between HP and the former management team of Autonomy. This time, the ex-Autonomy bods have claimed that new court documents filed by HP prove the latter has misrepresented the reasons why it had to write down $8.8bn in its botched acquisition of Autonomy in 2011. In a …
> Sounds like typical buyers remorse.
Hardly!
1) Buy something you don't understand and have no idea what to do with, against the advice of YOUR OWN experts. Just so your competitors can't get it.
2) Smash it up.
3) Demand a refund!
Sounds more like psychosis to me.
The curious case of HP vs. capatilism.
I have a neighbour I dislike... If HP manages to pull this scam off, do you think I'd be able to persuade them to do the same to his house? That'd fix him!
Aren't HP taking the auditors to Court as well?
RTFA:
"HP says it is planning to bring separate lawsuits against [...] the UK arm of Deloitte & Touche, which audited Autonomy for the acquisition.."
It's about bleedin' time - that would have been my first move. The fact that they didn't says all you really need to know IMHO.
"... that Autonomy's pre-acquisition hardware sales were done with the sole purpose of artificially inflating Autonomy's revenues."
" ...that HP's printer hardware sales were done with the sole purpose of artificially inflating HP's revenues." (As any fule know, HP is in the business of selling ink at a premium)
Ok, hardware sales are usually low margin, software sales, on the other hand, can have quite high margins. Of course, with hardware sales usually also include software sales of some sort. Sadly, when HP saw the hardware sales revenue, for some reason, they believed that was software sales... Now, I believe Microsoft could get away with such a defense, since they are mostly a software company, but HP ? They are killing off all software ... Tru64, OpenVMS, HP-UX, ... you name it.
98% margins on ink beats anything else, even Microsoft's 80% software margins.
Software sales lead to support contracts which make them more valuable than hardware sales. If they sell hardware to run their software on, they probably sell the hardware pretty much at cost price and make their money from installing the software on it.
The former Autonomy execs' latest blog post is part of their campaign to scuttle the proposed settlement of a lawsuit brought against HP by its own shareholders over the botched Autonomy deal. The case is being weighed by US District Judge Charles Breyer in the Northern District of California.
It's very amusing to see chickens come home to roost. By trying to blame Autonomy, HP have created a rather big problem for themselves. It must be sweet fun for Autonomy execs to sit on a pile of HP cash, sniping away at HP management's attempts to BS their way out of this one.
It's become a bit of a tech soap :)
Once upon a time, in a company far far away, I was FD of a company that used Arthur Andersen.
Their open strategy amounted to 'would you like the books, boiled, deepfried, or baked in a slow oven to get rid of the tough figures'?
When I said I'd actually like a set of books that reflected the companies actual performance, because we didn't have shareholders beyond the directors, they seemed a little taken aback.
HP, Delloite and Autonomy cooked up a story for the markets, which backfired on them. In the process a few people got rather richer, and a lot more got slightly poorer, and now the brown stuff has hit the air mass accelerator.
Who knows what fat brown envelopes and arms length share purchases were involved? One thing is for sure, those that do are best served by keeping their mouths shut and blaming someone else.
I'm amazed that they went ahead with the purchase, over the objections of the CFO. That way madness lies! At least if it tuns out to be true.
Admittedly a proper director is then supposed to resign over the issue, giving the shareholders (his bosses) warning of what's coming their way. Clearly that wasn't going to happen. Losing all that lovely lolly...
It's not going to look too clever in court though, when those emails and minutes get read to the jury.
I dont really care if HP or ex-Autonomy people are to blame, but I hope we get to the bottom of it. This makes the whole tech industry look bad. Whatever your opinions of HP, the idea of writing off billions is ridiculous. I doubt it was an honest mistake. And I doubt either side is innocent. I hope they find out what happened. There is nothing noble or innovative about this deal.
There seems to be some mis-understanding of the role of Deloitte in this. They were not the auditors responsible for the due diligence checking the company out for HP prior to the purchase, IIRC that was KPMG who have not as yet been served with any law suit. Deloitte were responsible for the annual audit of Autonomy's books for Autonomy's shareholders. In fact according to the Guardian, Deloitte were not told of the acquisition until 2 days before it was announced when they were requested by HP & KPMG at short notice to join a teleconference that only lasted 1 hour! How then can HP point the finger in any direction but themselves?
HP seem to be trying their very best to throw as much mud as possible in as many directions as possible in the vain hope that some of it sticks and to deflect as much heat away from themselves as possible.