HP: The big data trucks aren't stopping

HP: The big data trucks aren't stopping

Summary: Don't overlook the value of Autonomy and its competitors to help make sense of unstructured data at scale as HP struggles to remain relevant.

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The path of Web 2.0 technologies into the enterprise and the explosion of business data have followed similar trajectories over the last few years. Hewlett-Packard acquisition target Autonomy has been in the spotlight for all the wrong reasons as a jigsaw piece in HP CEO Leo Apotheker's remodeling plans, with the quarterly return-obsessed financial media arguably lacking vision into the world of big data and meaning-based computing.

Since Autonomy's birth in 1996, CEO Mike Lynch has been vocal about "making computers map to our world rather than the other way round"' as I wrote here way back in 2008; and while parsing meaning from the avalanche of digital materials modern business produce isn't sexy, it is definitely hugely profitable, as Autonomy's 2010 revenue of $870 million demonstrates. Mark Logic, another player in the unstructured and big data spaces, is also growing rapidly, as I also discussed here earlier this year.

Hewlett-Packard's folksy historical origins of tinkering in a suburban garage to create early computer hardware and peripherals is an awkward anachronism in an age where manufacturing at colossal scale in the Far East has resulted in Apple briefly becoming the world's most valuable company over Exxon this year. HP is a $126 billion in revenue global IT company but, like Cisco, suffers from bloat and sprawl in a rapidly tightening and evolving global economy. Making everything from the routers and plumbing to the servers and laptops to providing IT consulting is tough to orchestrate, especially with the public markets breathing down your neck.

One of the downsides of the digitally noisy era we live in is an inability to understand scale. There are huge numbers of smaller 2.0 technology companies offering free and low cost point solutions at the departmental and small business level to facilitate working together in various ways. The still crowded Enterprise 2.0 space offers pure play collaborative technologies such as Jive software (who have just filed their S1 to IPO) for groups of employees to provide the type of social networking layer people are now familiar with casually using in their social lives. Meanwhile,  the larger enterprise incumbents are increasingly attempting to offer these types of tools as a feature of their broader platforms, either through acquisition (ie VMWare/Socialcast, Successfactors/Cubetree) or by creating their own solutions (Tibco).

The problem most of these tools aim to solve is the ability to find people and resources more quickly, faster access to information and contextual adjacencies to similar information. Documenting your work in blogs and shorter hand tools such as Chatter, Yammer et al in this economy is only valuable if this demonstrates greater business efficiency, cost savings and value.

The sheer volume of noise by the chattering classes online attempting to win academic kudos and hourly one-upmanship victories around naming conventions -- and of course the wretched magic quadrants and charts that analysts constantly produce for their vendor and end user client bases -- collectively can tend to dissipate clarity of vision around decision-making on specific business use cases.

A foundational component of the modern enterprise is document management, which in plainer English means provisioning tools to create information and providing places to keep it all. The heavyweight incumbent is Microsoft Office and Sharepoint for creation and storage, respectively, keeping alive the 150-year-old document, mail and filing cabinet conventions and paradigms they emulate. No struggle needed to understand and adopt these old ways of working...

Autonomy's technology automates understanding of any type of unstructured information, whether text, voice or video, and performs automated operations and  processes on the information.  They have arguably the world’s leading enterprise search engine, which can also proactively suggest answers to a call center operator; profile millions of documents for a legal case; or monitor television channels for intelligence agencies by leveraging other Autonomy technology components.

You'd think this would be hugely attractive to Hewlett Packard's shareholders and the international financial mavens who commentate and opine on Hewlett Packard to influence investors, but near term it doesn't fit into their "milk the cash cow to get paid next quarter" mentality.  Exponential growth of data in virtually all companies combined with the huge challenges of attempting to impose enterprise search across the myriad generations of silos and stovepipes across entire companies has made Autonomy a very wealthy, successful company.  The challenge going forward is the perception that Hewlett-Packard '...sums up the worst of Corporate America ...lacking leadership'  ('Perhaps most damning is that HP is an asylum run by the inmates, with varying degrees of delusion and plain craziness across some of its biggest moves' )  to quote Jeff Reeves of Marketwatch.

Ironically the whole Enterprise 2.0 movement has historically been about making employees more autonomous - giving individuals more independence and freedom to pursue flexible self organization and networking across the organization against the constraints of org chart hierarchies. 'Unless you're the lead dog the view is always the same' goes the cubicle cartoon cliche, a problem which tends to be greater in global organizations like Hewlett-Packard.

It will be bad for the entire big data industry if Autonomy disappears into a Hewlett-Packard morass and leadership fail to make their unstructured data technologies a foundational component of their offerings - although it does present some significant opportunities in the near term for some of their competitors if that happens.

The bigger picture is to watch the space that Autonomy and their competitors occupy in helping make greater organizational sense within businesses and providing contexts and connections within the huge volumes of information modern enterprises create. HP may be smarter than some think in what I presume is their vision of pivoting their entire business focus to offer this ability and more. If they fail others will step in to continue this important and valuable work...

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Picture credit: A 40-ton haul truck at Crystal Hill, Arkansas Greatbasinminerals.com

Topics: Hewlett-Packard, Banking, CXO

About

Oliver Marks leads the Global Digital Enterprise Team at HP, having previously provided seasoned independent consulting guidance to companies on effective planning of business strategy, tactics, technology decisions, roll out and enduring use models that make best use of modern collaborative and social networking tools to achieve their business goals.

These are Oliver's views and not those of his employer HP.

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4 comments
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  • It's like the feeding of the 5000.

    Autonomy's revenue: 870 million. HP's revenue: 126 BILLION! So you can hardly expect the handful of Autonomy people to feed everyone else in HP. HP have got to go on earning their own keep in other ways. The question now is WHAT other ways. Will printers be enough? Is HP going to try to become a Storage expert? You comment on the lack of management skills. Surely the first thing HP must do is lay down some sort of convincing strategy for shareholders benefit as to how they're going to sustain the 120 billion level of revenue. If the only answer is "Autonomy" then sorry, that just isn't going to do it. Anyone with a load of HP shares should be very nervous.
    peter_erskine@...
    • RE: HP: The big data trucks aren't stopping

      @peter_erskine@... In the short term, revenue from Autonomy only needs to show a profit. That would best any of HP's current stable of s/w businesses. Next goal would be to replace the PC revenue... that'll take some doing but even if not successful, the profit margin ought to make up for the lower gross. In the end, HP wants enterprise customers that desperately need to understand the gobs of data they receive each and every day. Those customers will likely purchase equipment and services and printers and supplies... GROWTH!
      mschafer555
  • HP shareholders are in for a big disappointment

    I'll be surprised if HP can maintain even the $870 million revenue stream. Autonomy sells a wonderful story but does it actually match with reality? Some industry analysts are starting to ask exactly that:
    http://blogs.forrester.com/leslie_owens/11-08-26-what_is_autonomy_without_its_marketing
    http://www.realstorygroup.com/Blog/2215-Another-look-at-the-Autonomy-IDOL-OEM-business
    joeb72
  • RE: HP: The big data trucks aren't stopping

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