Posted by Brian Hill on August 18, 2011
HP today announced plans for a significant transformation of its business, including a $10.3 billion purchase of technology vendor Autonomy. Upon completion, the deal will bring HP strong search and analytics capabilities and a deep and broad portfolio of eDiscovery, archiving, and records management offerings.
While this purchase holds promise, I’m skeptical about how it will translate to near- and mid-term advantage for enterprise customers focused on information risk management. Here’s why:
- HP and Autonomy information risk management portfolios have significant overlap. With its TRIM and IAP product lines, HP today offers records management and archiving products. Leveraging a long string of acquisitions, including Meridio, Zantaz, Interwoven, CA Technologies' Information Governance business, and most recently Iron Mountain Digital, Autonomy also sells records management and archiving. Prior to today’s announcement, Autonomy faced some portfolio rationalization challenges. With a broader set of records management and archiving assets after the deal finalizes, HP will face some tough choices in determining which of its product lines will receive corporate investment over the long term. While Autonomy will bring significant new eDiscovery functionality and a rich pool of information risk management specialists with legal expertise, HP and Autonomy records management and archiving customers should be cautious until product direction is clarified.
- The two corporate cultures are fundamentally different. While Autonomy has long pushed the edge of the marketing envelope, HP traditionally has taken a very different approach with much tighter linkages between its marketing claims and proven functionality, backed by customer examples. Autonomy’s information risk management vision is compelling, but its “end-to-end” claims lack a solid set of customer success stories using Autonomy’s portfolio in a comprehensive way. In my opinion, a key lesson from this deal is that good marketing pays off. Over the long term, I expect that the two vendors’ profoundly different approaches will cause big bumps in product development and in sales and marketing strategies.
Ultimately, this deal will bring HP some strong technology assets and will provide an opportunity for the firm to get into a higher margin business. For example, I’ve had the opportunity to evaluate Autonomy’s archiving and records management offerings and have given them strong marks. On a call today, however, HP’s CEO said “Bringing Autonomy into the HP world will be seamless and highly complementary.” I’m not so sure. From an information risk management perspective, I expect a rough ride for joint HP and Autonomy customers.