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HP Closes Autonomy Deal, Rethink on PC Business Possible

The only thing that is clear about the HP acquisition of Autonomy deal at the moment is that it was concluded, after the U$ 10.24 billion deal was finally given the green light by 87% of Autonomy’s shareholders.

After this, it is not clear what HP is going to do, how Autonomy is going to be integrated into HP and what HP is going to do with outgoing CEO Leo Apotheker’s vision for HP as an enterprise services and software firm, while shelving HP's PC business and WebOS.

HP, Autonomy

At the time of the August announcement, it was clear that the markets didn’t like it. Not that they didn’t like Autonomy, but the idea of dumping the PC business seems to have made a lot of investors queasy, as did the price agreed for Autonomy.

And if you are to believe Oracle’s Larry Ellison, Autonomy’s Mike Lynch had tried to sell it off to Oracle last April at a price that was said to be considerably less than HP has agreed to pay. Lynch, of course, has denied this.

All in all it made a lot of people nervous, and resulted in the forced departure of the Apotheker, but not of his vision for HP, and it is over that the big question mark remains.

New CEO

Step into the breach Meg Whitman, formerly of eBay, and all the schoolyard squabbling between Lynch and Ellison is now irrelevant as she tries to put HP on the rails again and give it some kind of purpose for the future.

The first thing she has done is to offer something to try to calm all those tattered nerves. At a Fortune conference on Tuesday, she said she would make a decision on the spinoff of the PC business by the end of October.

HP’s PC Business

But had that already ready been decided? Seems not, even though at the time of the Apotheker announcement in August it seemed just about a done deal.

I want to make that decision much faster than the previous CEO…Uncertainty is not our friend. People are wondering whether to buy HP products,” she is reported to have said at the conference.

She also seems to have a clear idea of where she’s going with Autonomy. “The exploding growth of unstructured and structured data and unlocking its value is the single largest opportunity for consumers, businesses and governments,” she said.

She has also committed herself to meeting fourth-quarter projections, which should cheer up the markets, which had a difficult time trying to swallow the idea of spinning off the company’s US$ 43 billion PC business.

Whether Whitman will stay in the PC business remains to be seen, but even Michael Dell seems to think it should.

Speaking at Oracle’s OpenWorld on Tuesday and cited in the New York Times, he argued that 5% of the world’s microprocessors go into servers and storage and 95% go into PCs. The same is true for disk drives and other components, he said.

With PCs, he is saying, even if it’s a low-margin business, you still get supply and pricing power over other products. Interesting weeks ahead for HP. 

 
 
 
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