Opinion: Why Mike Lynch's Departure Is A Blow For HP5:34 PM EST Fri. May. 25, 2012
Autonomy co-founder and CEO Mike Lynch is so knowledgeable about technology that he is sometimes referred to as the "Bill Gates of the U.K." That's high praise, but Lynch won't be sticking around to share his knowledge in big data and cloud computing with HP, which is looking to improve in these areas.
That's a shame, because according to U.K. media reports this week, Lynch is exactly the type of entrepreneur HP needs right now. The Guardian describes Lynch as "a fascinating and original thinker," while The Independent called his departure a "classic case of entrepreneurial spirit curdled by the culture of big business." As HP searches for its future path, these qualities sound like they would have come in handy.
The situation was different just three months ago, when Lynch wowed the crowd at HP's Global Partner Conference with his engaging presentation style. He explained how Autonomy's technology would help drive HP server and storage business, make HP printing more interactive and otherwise give a shot in the arm to a company in need of innovative technology. Lynch's message resonated with partners and defused lingering questions about the amount HP paid.
Lynch could have helped HP fine-tune its cloud-computing message, something that CEO Meg Whitman has earmarked as one of her goals. Autonomy runs its archiving, data protection and other cloud-based services on a 50-petabyte private cloud that Lynch claims is the world's largest, spanning some 6,500 servers in 14 data centers around the world.
With Lynch and other C-level Autonomy execs reportedly leaving HP, how much of this cloud expertise remains? Dave Donatelli, HP's Enterprise Group chief, and Bill Veghte, HP's software head and chief strategy officer, are rising stars in HP and fully capable of driving the cloud message. But, given that Autonomy is using the cloud to improve the functioning of its flagship information management technology, Lynch could have been just as strong an advocate.
Lynch's departure is also strange in light of HP's stated plan to boost R&D investment, Tim Jennings, an analyst with research firm Ovum, said in a research note this week.
"Lynch is a technology visionary, and parting company on the basis of poor sales execution in the division indicates that HP has struggled to create a clear vision for how to leverage its very expensive acquisition," Jennings said in the research note.
NEXT: Other Startup CEOs That Have Left After HP Acquisitions
There is a well-established track record of CEOs leaving HP after being acquired. The list includes Chris Lynch, CEO of Vertica; John M. Jack, CEO of Fortify; Tom Reilly, CEO of ArcSight; and Thor Culverhouse, CEO of Stratavia. Opsware President and CEO Ben Horowitz stuck around for two years after HP acquired his company in 2007, leaving in 2009 to start the venture capital firm Andreesen Horowitz.
These departures are not necessarily signs of dysfunction at HP. Startup CEOs are entrepreneurial types that quickly grow frustrated with the bureaucracies of large companies. Others, like Jon Rubinstein, the former Palm CEO who left in January, stick around to fulfill contractual obligations.
Perhaps Lynch, who reportedly made $800 million when HP bought Autonomy, decided to just take a break. Of course, if this were true, Whitman would have acknowledged his departure and perhaps given the old "wants to spend time with family" line.
No, Whitman has made it clear: She wants new leadership for Autonomy and believes the technology is still eminently viable. "The market and competitive position for Autonomy remains strong," she said in HP's earnings call this week.