Hewlett-Packard's pending $10.3 billion acquisition of Autonomy is intended to help turn HP into a provider of information management services, said HP Chairman Ray Lane and Shane Robison, the company's executive vice president and chief strategy and technology officer.
The executives also promised to make the Autonomy technology available to mid-range customers also looking to extract value from their data.
Lane and Robison made their comments in response to questions from Fritz Nelson, senior vice president and editorial director of InformationWeek. InformationWeek is a sister publication of CRN.
Their comments come in the wake of last month's announcement that HP plans to acquire the British-based developer of information management software.
Autonomy, based in Cambridge, U.K., markets database search, information governance, information discovery, records management, archiving and Web content management software. Autonomy made news in May when it spent $380 million to acquire technology assets from iron Mountain, including digital archiving, e-discovery, and backup and recovery services.
Lane said HP's vision is to be a service company with innovative technology on the back end -- servers, storage, networking -- to provide information management.
"We need a larger software portfolio to do that. The big opportunity is with unstructured information: search, real-time analytics, streaming information, and understand the information that's flowing through the enterprise in real time," he said. "As we looked at that, we saw that was a real big opportunity."
Such capabilities cannot be done with relational databases, Lane said. "The world has been struggling for the last five years to try and find faster and faster and bigger and bigger technology that will outperform Oracle in doing a sort of a semi-structured job. We've got information that's unstructured and information that's structured in the same database. So we see things like (EMC's) Greenplum, (IBM's) Neteeza, and (HP's) Vertica try to do that in data warehouses."
However, Lane said, Autonomy is different. The company, which is not well known in the U.S., works with about 400 OEM customers and has a major presence around the world in the business of managing unstructured information.
"(Autonomy is) searching it, analyzing it, and bringing meaning out of it," he said. "If we want a position in information management, especially the 85 percent of the world that is unstructured, not the 15 percent that is structured, then we've got to either develop that technology or buy that technology. Autonomy was the only answer."
Robison said that with Autonomy, HP will be in the race to manage that unstructured data.
"(For) the 85 percent of the information that's unstructured, the growth rate in that segment is explosive, whereas the (structured data) growth rate is linear. . . . When you can do things like extract meaning out of emails, determine difference in images, determine tone and mood in voice, the capabilities are unlimited," he said.
Once the acquisition closes, HP hopes to integrate Autonomy with other parts of its software portfolio, including its Vertica solution for analyzing huge volumes of data and its ArcSight security and compliance software offering as part of a complete information management offering, Lane said.
Customers understand the need for HP to beef up its software portfolio, Lane said.
"How does HP help them manage information when we don't have the software portfolio to do it?" he said "So, buying Autonomy, and integrating it with Vertica, and having software components like ArcSight fortify that, more software content and more services content (to) help us be more partnered with customers. They get that."
NEXT: Bringing Information Management To The Midmarket
An audience who spoke during the Q&A portion of the event identified himself as a midmarket CIO and expressed concern that, while HP is touting the importance of Autonomy for its information management strategy, any benefits from that acquisition will have no impact outside of HP's largest customers because of the high cost of the technology, which can run up to $100,000.
Robison responded that 30 percent of Autonomy's business is delivered as software-as-a-service through a cloud-based business model which gives customers the ability to have a completely different entry point than the traditional license business model. "And we'll continue to push that into the midmarket," he said.
Robison also said that HP expects the Autonomy acquisition to be an accretive transaction from the start because of synergies between HP's and Autonomy's technologies. "As we get synergies through storage, servers, networking, our other software portfolios, Vertica, ArcSight, then hopefully we can address pricing for the midmarket as well," he said.