HP: 'Baby Tiger' Autonomy Will Drive Channel Business

Meg Whitman's channel debut was the top story at Hewlett-Packard's Global Partner Conference earlier this month, but a close second was HP's bid to show why $10.3 billion wasn't too much to pay for Autonomy.

Autonomy's core technology, called Idol, allows computers to understand unstructured, or 'human friendly' information -- i.e. e-mails, Twitter posts, video and audio -- which comprises the vast majority of data that enterprises generate today. Idol's ability to discern meaning within this data, which is something that relational databases can't do, will be a key selling point, according to Autonomy co-Founder and CEO Mike Lynch, now vice president of HP's Information Management division.

"It is Autonomy's ability to understand meaning that gives the technology such differentiation," Lynch said in an interview earlier this month. "We take that ability, and by changing the interfaces, we do many different applications off of it."

Last November, HP launched its first two Autonomy Idol powered appliances, one that archives unstructured data and another that makes it available for e-discovery purposes. Crunching unstructured data requires significant processing power and can drive server business, Lynch said, and when audio and video files are involved, it also increase storage capacity requirements.

Autonomy currently has around 400 ISVs and OEMs that license its technology, including Symantec, which uses it in Backup Exec, and Adobe uses it in Creative Studio for audio and video analytics. Autonomy's technology is also present on many consumer PCs, though Lynch acknowledged that many users aren't aware that it exists on their machines.

"The real art form for any good magic is that you don't actually know it's there, and that's the way it is with Autonomy," he said.

HP's Information Management division includes Autonomy and Vertica, the business intelligence vendor HP acquired last March. Bret Osborn, president of Lilien Systems, a Larkspur, Calif.-based solution provider, oversees two separate IT practices to which Autonomy and Vertica are increasingly relevant.

"You're trying to figure out how to create value out of data you haven’t done in the past. It's definitely going to drive storage, I/O and compute power," Osborn said.

HP, whose cloud strategy is still in its early stages, can also tap into the cloud expertise that Autonomy has built running a cloud that includes some 41 petabytes of data. Cloud represents one third of Autonomy's business, and the company is adding between 50 and 60 customers per year, Lynch said.

One thing Autonomy lacks is a services arm, but HP expects to fill the gap with its own services oriented partners. The big question, though, is when partners will actually be able to start getting into this side of the business. Whitman often describes Autonomy as a "baby tiger" that is vulnerable within the giant organization that is HP, and she has made it clear that she has no intention of rushing it into the channel.

HP's focus in the first half of the year will be on "getting Autonomy connected into HP," and the company expects to see financial "synergies" from the deal in the second half, CFO Cathie Lesjak said in HP's first quarter earnings earlier this month.