Autonomy: a postscript | FT Alphaville

Autonomy: a postscript

Here’s something odd.

That’s Autonomy’s turnover based on the last couple of reports from Hewlett Packard, which paid $10.3bn for the software maker last year. The graph relies on a few big assumptions.

HP’s first full-quarter contribution from Autonomy was in Q1 2012, though there was one month included in the Q4 2011, so that’s ignored. The last clean quarter from HP was Q3, while Autonomy’s autonomous figures stop at Q2.

If we assume core revenue at HP’s software business has been flat since Q3 (which is a charitable assumption), Autonomy has provided an extra $134m to the division in the first quarter of 2012. Year on year, that would suggest its sales were down 40 per cent.

Spin forward to the latest quarter, repeat the process and Autonomy appears to have flat-lined from Q1 with sales down 45 per cent from last year. That’s not good. At the current run rate, HP’s acquisition price was around 20 times annual revenues.

So what happened? HP puts the blame on Autonomy’s small-time execution. The Autonomites blame a clash against HP’s culture, which one particularly excitable code monkey compared to “being water-boarded.”

Neither side, it seems, wants to touch the most obvious reading of the graph: the clash may have been over what constitutes a sale.

Related links:
Lynch mobbed – FT Alphaville
Revisiting Autonomy’s Iron Mountain deal – FT Alphaville