Gray Matter Group provides Autonomy lessons
Updated: Apr 11, 2019
In case you are unfamiliar with UK tech company Autonomy and the fraud they committed, Gray Matter Group is going to get you caught up on it all as best we can.
"Autonomy specialized in analysis of large scale unstructured "big data", becoming the UK's largest and most successful software business by 2010. It used a combination of technologies born out of research at the University of Cambridge and developed a variety of enterprise search and knowledge management applications using adaptive pattern recognition techniques centered on Bayesian inference in conjunction with traditional methods. It maintained an aggressively entrepreneurial marketing approach, and controls described as a "rod of iron", which was said to include zero tolerance and firing the weakest 5% of its sales force each quarter, while cosseting the best sales staff "like rock stars".
Autonomy was acquired by Hewlett-Packard (HP) in October 2011. The deal valued Autonomy at $11.7 billion (£7.4 billion) with a premium of around 79% over market price that was widely criticized as "absurdly high", a "botched strategy shift" and a "chaotic" attempt to rapidly repositionHP and enhance earnings by expanding the high-margin software services sector. Within a year, major culture clashes became apparent and HP had written off $8.8 billion of Autonomy's value. HP claims this resulted from "accounting improprieties, misrepresentations and disclosure failures" by the previous management, who in turn accuse HP of a "textbook example of defensive stalling" :6 to conceal evidence of its own prior knowledge and gross mismanagement and undermining of the company, noting public awareness since 2009 of its financial reporting issues:3 and that even HP's CFO disagreed with the price paid.:3–6 External observers generally state that only a small part of the write-off appears to be due to accounting mis-statements, and that HP had overpaid for businesses previously.
HP recruited Robert Youngjohns, ex-Microsoft president of North America, to take over HP Autonomy in September 2012, and since that time, has worked towards a turnaround through expanding its information management and analytics software business. Though the company is integrating into HP Software, Autonomy remains a singular operational business.
In 2016, HP agreed to sell its Autonomy assets, as part of a wider deal, to the British software company Micro Focus. The merge concluded on 1 September 2017." Courtesy of Wikipedia
The Financial Times is reporting that the US is bringing additional fraud charges against Mike Lynch, the former CEO of Autonomy. The former CFO has already been charged and found guilty of fraud relating to activities at Autonomy according to Gray Matter Group.