HP May Acquire UK-Based Autonomy for $10B, Spin Off PC Business
When Hewlett-Packard's board of directors selected former SAP CEO Leo Apotheker as its new leader to replace Mark Hurd in September 2010, they knew exactly what they were doing; they hand-picked a career software veteran to transform their longtime hardware maker into a software and services company for the 21st century.
They have moved aggressively to buy software companies, including Vertica and Fortify among others, since Apotheker came aboard. Now it was widely reported Aug. 18 that it is about to buy a very big fish, UK-based Autonomy, here in August 2011.
Although HP wouldn't acknowledge the pending acquisition, it did confirm in its earnings news release that it is in discussions with Autonomy regarding a possible offer for the company.
Apotheker has said several times that he wants the company to expand its scope in software and services that deliver computing power via the cloud. On the hardware side, HP has been focusing more of its energies on servers and storage and lessening its attention on desktop and laptop PCs largely because the the desktop and laptop market has stalled and margins are eroding in the face of skyrocketing tablet sales.
Considering Spin Off of Personal Systems Group
In coordination with that possible acquisition, HP was also reported preparing to spin off its personal computer business known as the Personal Systems Group to another vendor, along the same lines as IBM did in 1998, when it sold its laptop business to Lenovo.
The statement read: "HP reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction."
Initial reactions to the news were many and varied.
"If HP spins off their PC business ... maybe they will call it Compaq?" tweeted Dell CEO Michael Dell on Aug. 18.
"If the rumors are true (about Autonomy), then HP stands to add a substantial software company to compliment Vertica and 3PAR, for instance," Charles King, primary analyst at Pund-IT, told eWEEK. "Really interesting company. They can provide the search analytics at the big data-type software layer that HP lacks right now."
"On the product side, it will mean some serious portfolio rationalization," Enterprise Strategy Group e-discovery analyst Katey Wood wrote in her blog. "In archiving, Autonomy possesses its Zantaz archiving line, including Digital Safe, the acquired Information Governance assets of CA, and now Mimosa following the recent acquisition of Iron Mountain s digital assets, while HP has its own Integrated Archiving Platform. In records management, HP has TRIM where Autonomy has Meridio and iManage content management from its acquisition of Interwoven.
"But like the Brady Bunch, this group must somehow form a family. ... Hold onto your e-discovery hats!"
The move to add Autonomy, if it happens, is a clear indicator where HP intends to go in the future. Autonomy is an aggressive, diversified, sales-driven company also bent on acquisitions and which has been described as a "shark that needs to keep moving and being fed in order to stay alive," one analyst who asked not to be identified told eWEEK.
Well, an even bigger shark the world's largest IT company by revenue may be about to swallow it.
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