Autonomy founder exit from HP 'counter-intuitive'

Summary:Mike Lynch's departure comes less than a year after selling Autonomy to Hewlett-Packard, but his talent should have been better utilized to enhance vendor's software business, analyst says.

Less than a year since being acquired by Hewlett-Packard, Autonomy says many of its executives have left the company, including its CEO and founder Mike Lynch this week, whom an analyst says should have been better leveraged within HP.

Six executives including Lynch had exited the company, according to a statement Thursday by AutonomyOther departed top executives included its chief research officer Peter Menell, COO Andrew Kanter, and chief marketing officer Nicole Eagan.

Lynch will leave the company after handing over the reins to HP software head Bill Veghte. While Autonomy declined to give any reasons for the exodus, HP said it was "very common and very natural" for entrepreneurs to move on following an acquisition.

HP said during an earnings call Wednesday: "Autonomy had a very disappointing license revenue quarter, with a significant decline year-over-year resulting in a shortfall to our expectations. To help improve Autonomy's performance, Veghte, HP's chief strategy officer and executive vice president of HP software, will step in to lead Autonomy." It added Lynch would leave "after a transition period".

In a statement Friday, Ovum's chief IT analyst Tim Jennings questioned if Lynch's departure was "counter-intuitive" particularly when HP earlier this week unveiled its intent to reinvest in research and development (R&D) after announcing plans to lay off 27,000 employees.

"Lynch is a technology visionary, and parting company on the basis of poor sales execution in the division indicates 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," Jennings surmised.

He said the IT vendor would have benefitted from better tapping Lynch's talent across its software business, instead of letting him remain at arm's length, and subsequently having Lynch shoulder the blame for poor sales execution.

The Ovum analyst advised enterprises to "exercise caution" in any planned, new or increased investments in Autonomy products, until HP came up with a clear roadmap for the technology--both as a standalone offering, and as part of its wider portfolio.

HP said its 27,000 staff layoffs would result in annual savings between US$3 billion and US$3.5 billion, which the vendor planned to plough back into "people, processes and technology", specifically, in cloud computing, big data and security.

Topics: IT Employment, Start-Ups

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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