Diggin' technology every day

November 20, 2012

NEWSFLASH: Autonomy sucked

Filed under: General — Tags: — Nate @ 8:34 am

HP came out this morning and told the world what most of the world knew already, the acquition of Autonomy was a mistake, resulting in a $8.8B write down. This is basically hot on the heels of another $8B write down on their EDS acquisition.

$17 Billion in losses

That number is just staggering. People say government is bad at waste, HP (among others) shows that the private sector is just as good at waste.

I suspected something with Autonomy was up when I saw a post by someone I know on LinkedIn saying he was laid off along with 200 other people – he was at Autonomy, I was not sure if the rest were part of Autonomy or not(I assume most were).

Imagine if they skipped out on Autonomy – and instead invested that $10B in mobile, a market that dwarfs that of Autonomy. Instead they prematurely killed Palm – who was widely regarded as having the best user experience at the time.  Most people knew it was going to take billions of further investment in Palm to see if they could make it work. Palm was broke when they were acquired, so it obviously lacked the resources to do it themselves. The best example of this is Microsoft’s mobile platform. Floundering for more than a decade at this point. But they don’t give up! Because they can’t give up.

HP’s cash reserves are low – which caused a credit reporting agency to cut their outlook.

I guess the good thing that is coming out of this is HP is admitting their mistakes. Hopefully they can run things better going forward.

It is fascinating to me how many large companies are doing so poorly in recent years. Part of the reason for these companies to be as big as they are is they are diversified much more than their smaller counterparts. Whether it is HP or Dell in the PC space, or the once high flyer consumer electronics makers Sony, Sharp,  Panasonic and NEC. IBM by contrast of course is doing quite well, they are doing stuff HP and Dell are constantly struggling to try to copy. Apparently Korean (I believe) makers Samsung and LG are eating the Japanese lunch. I suppose at some point this will shift further west to China decimating the Koreans.

People were convinced that Japan was going to take over the world in the late 80s and early 90s – and they never did, nor are there signs they ever will. For some reason I’ll probably never forget I was a freshman in high school in Palo Alto and one of my friends was the grandson of one of the founders of HP of all places. As a second language course I took spanish – naturally because it was supposed to be easier. He took Japanese. I asked him why and he said because his father thought it was the business language of the future. Now it seems the popular language to teach is Chinese. Anyway getting off topic.

I haven’t seen recent mention of whether Hitachi – one of the other Japanese conglomerates is having issues other than these lay-offs a few years ago. For some reason or another I get the sense Hitachi is more industrial than the others so aren’t as impacted with the shift to Korea for consumer electronics.

Next I’m waiting for Ballmer to get the boot for the abortion that is Windows 8.

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