These days Hewlett Packard can’t do anything right. But, in particular, it really can’t do software.
One year after paying $11 billion for Big Data search outfit Autonomy, HP is taking a $8.8 billion write off on the deal, saying that Autonomy cooked its books prior to the acquisition.
“HP now believes that Autonomy was substantially overvalued at the time of its acquisition due to the misstatement of Autonomy’s financial performance, including its revenue, core growth rate and gross margins, and the misrepresentation of its business mix,” HP said Tuesday in a press release.
In short, HP finally agrees with what pundits have been saying for more than a year. The Autonomy deal was a stinker. HP couldn’t get anyone on the phone to talk about software strategy on Tuesday. The company said it wanted to focus on its earnings.
It’s the latest in a string of failed high-profile acquisitions by a mismanaged company, but it’s more than that. Autonomy was also supposed to be HP’s big shot at moving into the high-margin software business that’s kept its two biggest competitors — IBM and Oracle — chugging along. But it shouldn’t be a big surprise that the acquisition has proved to be a colossal failure. If HP has proved anything over the past decade, it’s that it doesn’t do software, at least not the sort of enterprise software that big companies pay lots of money for so they can manage their data and corporate assets.