Autonomy’s problem? Leadership were out of their league, according to HP CEO Whitman

By Graeme Burton
25 May 2012 View Comments
Dr Mike Lynch is the founder of Autonomy

In the earnings conference call, Whitman pinned the blame on Autonomy's struggle to grow up from being an entrepreneurial start-up with a charismatic leader into a proper enterprise software vendor.

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"In my view, this is not the product. Autonomy is a terrific product. It's not the market. There is an enormous demand for Autonomy. It's not the competition. I was wondering, is there a competitor that we didn't see, and the answer to that is no. This [is an example of] classic entrepreneurial company scaling challenges," she said.

In order to ‘professionalise' the company, Whitman is parachuting in Bill Veghte, HP's chief strategy officer, also the executive vice-president of HP Software, "to help improve Autonomy's performance". Lynch will be off just as soon as the "transition period" is up.

She added: "I have seen this movie before. When you try to go from $40m to $400m to $1bn to $2bn, boy, it's a whole different ball game. We need to put in some sales processes.

"We need to put a better interface into HP in terms of how Autonomy interfaces with our services business, as well as our server, storage and networking business, and we need a new organisational structure to support a $1bn-plus company."

While the remaining staff at Autonomy now have that re-organisation to look forward to, HP's staff across the world are facing redundancies – 27,000 out of a total of 349,600 the company employed at the end of 2011. Whitman's redundancies will include some 1,600 in the UK.

As a result, unions representing HP staff are far from happy. "The position at the moment is that both Unite and PCS members think it's time to draw the line in the sand. Everyone is tired of watching their jobs being exported. It appears that HP's biggest problems are on its [Asia-based] manufacturing, rather than IT side, but HP has stated that its position is to hit all regions equally, and that means, in effect, that more UK jobs will be offshored," said Kevin O'Gallagher, Unite's national officer for the IT sector.

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