Mike Lynch exits HP as Autonomy board 'disintegrates'

by | 24 May 2012

Six senior managers at Autonomy have either left or are working their notice, CBR reveals

Mike Lynch

The removal of Mike Lynch from Autonomy is the latest in a long line of departures from the senior board since its controversial takeover by HP, CBR can reveal.

Sources close to the matter have confirmed to CBR that president Sushovan Hussain, chief research officer Peter Menell, COO Andrew Kanter, CFO Steve Chamberlain, chief marketing officer Nicole Eagan and Aurasma head Martina King have all either left the company or are currently working their notice.

While HP blamed Autonomy's poor performance, a source has told CBR that the company was finding it difficult to execute its strategy - which is unsurprising given a huge chunk of its management had gone.

Autonomy confirmed to CBR that "all these people have left or resigned," but offered no further details. Of the people listed, only Steve Chamberlain has publically announced his departure, joining digital radio designer Sepura as CFO.

"Around 20% of the senior management has gone, because they simply couldn't work with HP," our source said. "How can you close deals when people are leaving? When big deals are being closed, you want the head sales guy or someone senior there. It's very difficult to deliver with a disintegrated management board."

This chimes with comments from Cathie Lesjak, HP's finance director, when she spoke to analysts about HP's results. She said, "License revenue was disappointing, sales execution was a challenge and big deals were taking longer to close." Not surprising, says our source.

Our source also confirmed that Mike Lynch was not considering his position at HP prior to yesterday's announcement.

When the takeover was announced a number of industry analysts questioned the deal, given HP's rather suspect record in integrating companies into its vast empire. Clive Longbottom of analyst house Quocirca told CBR the deal represented a "sad" day for Autonomy.

"HP has a chronic record in software acquisitions - just look at Mercury Interactive - and it doesn't understand software," he added. "The hardware guys will want to see how they can wrap hardware around it, the same for the services group."

TechMarketView's Angela Eager also questioned the wisdom of the move. "In the software space, HP is known for its infrastructure and application management software, which is a far cry from Autonomy's area of pattern recognition, unstructured data management and discovery," she said at the time.

"Given the limited synergy between the two companies, at this point in time it is difficult to see precisely how Autonomy will benefit from the move," she added.

These latest moves are part of new CEO Meg Whitman's strategy to stabilise a company that has had a torrid few years. CEO Mark Hurd, who led a brutal cost-cutting regime that saw nearly 50,000 job losses, was pushed out after an expenses scandal.

It was alleged he had falsified documents to conceal a relationship with a former contractor and help her get paid for work she didn't do. The woman involved had accused Hurd of sexual harassment, and while an internal investigation found him innocent of that charge he still resigned.

Then it was the turn of Leo Apotheker, who, after a mixed spell at German software giant SAP, was given HP's top job. His tenure was short-lived, after the board and shareholders reacted with dismay when he announced HP was looking into spinning off its low-margin PC business to focus on software and services, much like IBM had successfully done.

The purchase of Autonomy was part of that strategy. When speaking at a recent conference in London it was interesting to note that despite many references to "information optimisation", Autonomy was only mentioned once by name during Meg Whitman's keynote.

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