HP/Autonomy Strategy - Still Buy Instead of Build?

Long-suffering Autonomy / Interwoven product customers have seen some useful dot-releases on various modules since the star-crossed HP acquisition last year.

Though any improvements are welcome, my personal opinion is that these efforts are too little, too late for platforms in desperate need of fundamental refactoring to pay down enormous technical debt -- if not by HP, then by someone else. So, perhaps like you, I follow what's going on at HP for authentic signs of a larger strategy.

And as with any public firm, the most meaningful information gets directed at investors, rather than customers. Witness this aside from an HP executive (amid a discussion of 2014 revenue projections) about how the company is still looking to make "strategic acquisitions" to prop up the firm's struggling Enterprise Group. HP doesn't get specific about this, so we don't know what kind of technology they want to acquire, but it's pretty clear they're looking outside the company for energy.

My reaction is this: when software vendors try acquire their way out of chronic product engineering problems, customers lose. I suspect most Interwoven and Autonomy customers would agree. After all, they saw Interwoven use its post-IPO equity windfall to acquire a plethora of other firms, rather than modernize its flagship TeamSite platform, which at its core remains a circa 1997 file management system. Similarly Autonomy went on an acquisition binge (at a time when Apache Lucene was fast overtaking the Autonomy IDOL search platform), ultimately rolling up the Interwoven roll-up, among others.

As you know, that did not end well at all.

Consider that executives at most public companies typically receive the lion's share of their compensation packages based on near-term stock values. In that light, HP buying more companies is a rational choice if the acquired products can generate better returns than HP's incumbent technology portfolio, the same way it made sense to Autonomy and Interwoven executives.

The problem for enterprise technology customers is that we necessarily have longer-term horizons for our major technology investments than stockholders do for their equity investments. For Autonomy customers, that horizon seems dimmer than ever.

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BTW, what other big vendor in this space seems to want to keep acquiring other firms to meet investor expectations? Here's my take...