Hewlett-Packard (HP) thought their troubles were beginning
to fade away as the company ousted their CEO and hired Meg Whitman. A public
verbal spat between Oracle and Autonomy is bringing to light criticism about
HP’s purchase of the latter company. “Oracle-Autonomy battle rages with HP in the wings” by Paul Sandle of Reuters.com reports HP’s decision to buy Autonomy
for $12 billion sparked a debate about the price tag.
The Autonomy purchase was one of the last big moves of
former CEO Leo Apotheker. The article reports the purchase “has alienated Wall
Street because of its steep price tag”.
HP’s new CEO Meg Whitman has stood by the purchase. But last week, CEO
of Oracle Larry Ellison announced to investors that “Oracle had been pitched a
sale during an April meeting but walked away because the company, with a $6
billion market value at the time, was priced ‘absurdly high’.”
Autonomy CEO Mike Lynch has admitted the two met but it wasn’t
a sales pitch. Ellison is claiming he has proof of the sales pitch. The proof:
a PowerPoint presentation by Lynch, and Frank Quattrone, a dealmaker who
Ellison claims was present at the pitch. Ellison has gone a step further by
posting the slides online at Oracle.com/PleaseBuyAutonomy.
While this verbal dispute between Oracle and Autonomy is
entertaining, the actual matter is whether HP paid too much money for the
latter. The matter has gone from inquisitive to insulting. While Autonomy feels
the need to respond (which I believe they shouldn’t have responded), this is
HP’s problem. Meg Whitman needs to clarify the purpose of Autonomy’s purchase
and the value of the $12 billion price tag.
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