Recent news for HP has been a sea of red ink, budget cuts and layoffs, but perhaps most telling of all is news announced hours ago that Mike Lynch, who started in with HP less than a year ago, sold his company, Autonomy (News - Alert), to HP, calling HP "too bureaucratic."
Yet there are some who believe this move is a mistake.
Tim Jennings, chief IT analyst for Ovum (News - Alert), is one of those figures who believes Lynch's departure is not only bad news for HP, but bad news for Lynch himself. First, Jennings seems to think Lynch's departure was premature, given that HP plans a sea change in the way it does business.
"Mike Lynch’s departure from HP seems counter-intuitive in light of the company’s intention to reinvest in R&D following its planned layoffs,” Jennings said. “Lynch is a technology visionary, and parting company on the basis of poor sales execution in the division, indicates that HP has struggled to create a clear vision for how to leverage its very expensive acquisition.”
"Since the acquisition, HP has allowed Autonomy to run autonomously (admittedly somewhat at Lynch’s behest), including maintaining separate R&D functions, but this has made it difficult to benefit from the company’s core technology within the broader HP portfolio, just at a time when it is one of the hottest areas for enterprise investment," he added.
But that's not the only matter here; Jennings further expressed the position that not only is the move bad for Lynch; it was also a blow to HP itself, as HP now loses a critical core competency that Lynch would have brought to the table, and suggests businesses interested in working with HP should act accordingly.
"HP would have been better advised to utilize Lynch’s talent across all of its software business, rather than to allow him to remain at arm’s length, and subsequently land him with the blame for poor sales execution,” Jennings added. "In terms of enterprise implications: IT managers should exercise caution in planned new or increased investments in Autonomy products, until HP can provide a clear forward roadmap for the technology both as a standalone solution, and as part of the wider HP portfolio."
Given that HP has recently been seen as having troubles in the cloud sector, Jennings' assessment is especially damaging to HP. Autonomy's product line, designed to "allow computers to make sense of human conversations," would have been a significant help in that front – between videoconferencing and VoIP, human conversation takes a lot of the cloud – and now Jennings is recommending that users stay out of HP's Autonomy-related offerings until HP can get their strategy straight.
Getting the strategy straight on that front would certainly have been much easier – and much more credible – if the technology's original designer had remained on staff.
Now HP, which had already been suffering from problems sufficient to launch mass layoffs, will have to convince potential users of the technology that they understand it every bit, as well as the guy who created it, and can provide a coherent strategy for its use and implementation without having him on hand.
That's a blow that HP can hardly afford, and just one more in a series of blows that HP has taken recently.