Re: Looks like very poor DD
"the key thing when buying a SaaS business and conducting DD, is to look at the *quality* of the revenue"
There seems to be a lot of emphasis put on Autonomy being a pure play software house and not engaging in hardware sales.
Was HP perhaps expecting to move from pure play software into bundled hardware/software and managed solution sales with it's fine range of servers and storage as one of its synergies? Surely you would have someone look for that if it was your cunning plan?
In which case, there seems to be a disconnect between asking senior Autonomy management and checking the numbers to see what the revenue consisted of IF the "fraud" is as large as HP says.
Which leads into the second question - was the level of "fraud" material to the acquisition? It seems to have been small enough to escape notice by HP/Deloitte/KPMG but large enough to justify a significant write down. And you have a due diligence report that was never finalised, so it hasn't been signed off.