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Hewlett-Packard Enterprise Reportedly Looking To Unload Autonomy Assets, Partners Think It'll Be A Tough Sale

Hewlett-Packard Enterprise CEO Meg Whitman offloaded assets from the vendor's $13.9 billion EDS acquisition last month, and now she's reportedly looking to do the same with Autonomy.

Channel partners say Hewlett-Packard Enterprise may have a tough time finding a buyer for some of its software assets, including what remains from its $10.3 billion acquisition of Autonomy, which are reportedly up for sale.

HPE partners told CRN that the Autonomy software has never been a big seller in the channel, maintaining that HPE never provided partners with sufficient training and support to make the product a channel success.

The potential sale of Autonomy and other HPE software assets, including Mercury Interactive and Vertica Systems, was reported by Bloomberg earlier this week.

[Related: Whitman Says Enterprise Services-CSC Deal Makes HPE A 100 Percent Channel-Focused Company]

Just last month HPE unloaded assets from the vendor's $13.9 billion acquisition of EDS in a merger with system integrator CSC.

The Autonomy acquisition in 2011 was part of former HP CEO Leo Apotheker's bold – and short-lived -- quest to recast the hardware vendor as a software and services powerhouse. But shareholders didn't agree, and HP wrote down $8.8 billion from the deal the following year while also accusing Autonomy's management of shady accounting.

Last year, HP sued Autonomy's former CEO Mike Lynch and former CFO Sushovan Hussain seeking $5.1 billion in damages from alleged accounting improprieties, a case that is still pending.

Autonomy's Intelligent Data Operating Layer (IDOL) technology, which analyzes data from emails, voice, video and social media to identify patterns, was supposed to give HP a unique offering in the big data analytics space. But according to partners, HP didn't sufficiently train the channel to sell the technology.

HPE is still selling the IDOL software and the product had "encouraging results" during the vendor's fiscal second quarter, HPE CFO Tim Stonesifer said in an earnings call in May.

However, two HPE partners told CRN that in their opinion, Autonomy has been a "complete bust." Another HP partner executive expressed surprise that Autonomy IDOL is still part of the HPE portfolio. The partners said they though HPE would have a tough time finding a buyer for Autonomy.

"HPE Software has never been that channel friendly, and so Autonomy was not a channel play," the HPE partner executive told CRN, speaking on condition of anonymity.

When HP split into two companies last October, several Autonomy assets – including the TeamSite content management system and the Aurasma augmented reality technology -- were moved to the HP Inc. side, which sells PCs and printers.

In April, HP Inc. sold these and other Autonomy assets to OpenText, a Canadian enterprise information management vendor, for an undisclosed sum.


HPE's overall software revenue dropped 13 percent year-over-year during its most recent quarter, or 10 percent in constant currency. But adjusting for the impact of acquisitions and divestitures, HPE said its software revenue actually grew 2 percent during the quarter.

Meanwhile, Bloomberg also reported that HPE is looking to sell its Mercury Interactive and Vertica Systems businesses.

HP spent roughly $350 million to acquire Vertica in 2011, adding the highly regarded in-memory database and analytics products to its portfolio. The following year HP combined Vertica with Autonomy to create a big data division, led by former HP software chief George Kadifa.

Vertica gained significant early traction in the marketplace, with Kadifa suggesting at one point that it had the potential to become a billion-dollar business. Yet HP lost many top Vertica engineers in the years following the deal, and Shilpa Lawande, the vice president in charge of this business, left in February.

Although Vertica was a solid performing technology, one HPE partner told CRN it suffered from the same lack of training and channel focus that prevented Autonomy IDOL from taking off.

"HP partners had no clue how to sell Autonomy or Vertica -- and more importantly, how to build and invest in their businesses to support these products," the partner told CRN. "I think most partners would welcome the sale of both of those businesses."

HP acquired Mercury Interactive, an IT management software and services vendor, in 2006 for $4.5 billion. Prior to the Autonomy acquisition, Mercury Interactive was HP's largest software deal.

An HP spokesman declined to comment on whether Autonomy, Mercury Interactive and Vertica are for sale.

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