Hewlett-Packard Co.’s announcement last week that it would purchase Autonomy Corp. amid its plans to jettison parts...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
of its personal computer business has some industry watchers asking about HP’s strategy and whether it could mean a change in the way data is collected and used.
HP said it will acquire the British enterprise search and content management software maker as it transforms its business by cutting back on tablets, including the TouchPad, and smartphones.
Combining HP’s well-developed sales channels and vast partner program with Autonomy's lineup of information management software products has analysts keeping close watch.
“It’s about time,” said Susan Feldman, research vice president of search and discovery technologies for Framingham, Mass.-based IDC. “This is a case of looking at what needs to happen in the enterprise as information becomes more and more central to the success of the enterprise today.”
Feldman said the two companies realized the market was at a “tipping point,” moving from legacy data-based software to a new IT infrastructure based on “unified access to information.”
The acquisition will speed up market development of unified products that Feldman said would be the foundation for search-based applications and workspaces.
“We are seeing the emergence of a new platform that will support a constellation of information applications such as e-discovery, marketing, question answering, publishing and decision support,” she said.
Anne Lapkin, research vice president at Gartner Inc., called the acquisition, reported to be worth $11.7 billion, “a bit remarkable. Whether it makes sense or not, it’s way too early to tell.”
Lapkin, who specializes in studying trends in the enterprise software and information management segments for the Stamford, Conn.-based research firm, explained that while “HP’s been talking for a while about [moving] from a high-volume, low-margin business into a higher-margin, higher-value business,” paying more than $11 billion for a company that reported just shy of $1 billion in revenue in the past year has industry watchers wondering what HP’s strategy for integrating and developing the business will be.
Lapkin said that it will take some time for HP to understand the Autonomy business model, and that “all [HP has] said so far is, ‘We’re going to do something around content.’ That doesn’t really constitute a strategy.”
HP, for its part, has high hopes for its $11.7 billion bet on enterprise search and content management.
“Together with Autonomy, we plan to reinvent how both unstructured and structured data is processed, analyzed, optimized, automated and protected,” said Léo Apotheker, HP president and CEO, in a statement.
Autonomy founder and CEO Mike Lynch will continue to lead Autonomy for at least the next two years. That, at least according to Lapkin, is a positive sign.
“The [two companies] have very different cultures, and HP’s management style has undergone such a shift that I don’t know what HP’s management style is anymore,” she said. “But if HP is looking for a vision around information, Lynch is the guy with the vision. And it’s a very clear vision.”
Leslie Owens, a senior analyst in the content and collaboration spaces with Forrester Research Inc., of Cambridge, Mass., said HP’s global sales force will serve as a possible avenue to introduce enterprise search and information management to potential new buyers.
“Enterprise search is a mature market, but then Autonomy is so much more than that," she said. "Oracle has a secure enterprise search product, so now HP does, too. I see this as a macro move to get into the enterprise information management market.”
Indeed, the deal indicates the information management space is “heating up,” according to Lapkin.
“There are going to be more acquisitions in this space,” she said.
That perspective was shared by Feldman, who said, “The big software vendors are circling around this whole area.” Additionally, smaller vendors will develop applications to fit on top of the platforms that ultimately win out.
“It’s already happening in the search world, and they’re tremendously successful,” she said.
HP and Autonomy have very different types of customers, and Lapkin said it would be interesting to see how Autonomy’s products will be integrated into the HP portfolio. Among those products being discontinued is the HP TouchPad. The device runs HP webOS and was marketed heavily as HP’s response to the Apple iPad, but sales never materialized. The device, as well as the Pre lines of tablets and smartphones, which are also expected to be axed, sprang from the company’s $1.2 billion acquisition of Palm Computing in March last year.
While HP has stated it wants to move away from the personal computer business, and angered some partners in the process, software currently accounts for about 3% of its revenue, according to Reuters.