Q&A: Autonomy CEO Explains Why The HP Deal Made Sense

Hewlett-Packard surprised many investors and channel partners last September when it acquired U.K.-based information management software vendor Autonomy for $10.3 billion. Since then, HP has rolled out three purpose-built Autonomy appliances and partners have begun getting acquainted with technology that could have a profound impact on HP's product portfolio for years to come.

Mike Lynch, Autonomy co-founder and CEO, is settling into his new role as vice president of HP's Information Management division, which consists of Autonomy and Vertica, the business intelligence vendor HP acquired last March.

In the run-up to HP's Global Partner Conference, which is taking place this week in Las Vegas, Lynch spoke with CRN about how Autonomy's technology fits into HP's business, how it can help drive channel revenue and how it's pushing the venerable relational database to the IT industry sidelines.

CRN: Autonomy's technology is new to a large portion of HP's channel -- what's your message to those who aren't familiar with it?

Autonomy's technology 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.

The great thing about unstructured information is that it's what humans do. We're very good at it. We can write e-mails, we can listen to phone calls, and all the technology itself is extremely powerful and specialized to allow people to do this. Unlike structured data, where you are forever converting things and tagging things and trying to make things compatible, once you can understand meaning in the unstructured world, things become very easy.

In the early days of IT, it was all about databases and structured information, but the reign of the relational database is coming to an end after 50 years. That's incredibly exciting.

CRN: Which specific Autonomy technologies are best suited to the channel?

We break the Autonomy portfolio into three parts: There's Power, which is enterprise search; Protect, which is all things around e-discovery, policy and legal; and Promote, which is about interacting with customers and optimizing Web sites.

The beauty of enterprise search is that it's simple to install, plug-and-play, and that makes it a great channel product. So we're seeing that go out through the channel to more midsize and smaller companies.

Another one is e-discovery, which is what happens when a company suddenly gets a legal issue that they have to react to quickly. In this case, it's larger businesses that want to be prepared in case something happens.

One new area for HP partners is the whole sweep of products for things like social media and Web sites, call centers, the Promote portfolio. That's a completely new area for HP partners. And it's actually one of our fastest-growing areas at the moment because the technology is so powerful, and many end-user organizations are moving to be more active with their customers on a nonphysical basis, through mobile and call centers online.

Autonomy has been a very channel-based organization. We have a whole series of channel partners that we work with. For many of HP's channel partners, that is a new, high-value opportunity. And it is a very nice business because it's a countercyclical one -- customers have to buy that stuff, irrespective of the normal cycle, because often it's necessary to comply with the law.

NEXT: Lynch Says Autonomy Drives HP Hardware Sales

CRN: Where does Autonomy drive business within HP's existing portfolio?

Autonomy is very storage-hungry -- if you have a piece of audio or video, you're chewing through storage -- so obviously this fits very well with HP's storage business. Understanding this information also requires processing power, so it's a big driver for the server business. Even in areas like PSG [the Personal Systems Group], there is Autonomy technology going into future products.

Another area is the technology used to make printing interactive -- things like visual recognition. So Autonomy technology is being used all over the place [within HP], and what you've got is the ability to really get revenue synergies through leveraging it in certain parts of the business.

It's Autonomy's ability to understand meaning that gives the technology such differentiation. We take that ability and, by changing the interfaces, we do many different applications off it.

You get phenomenal scale with HP. Autonomy doesn't do services, and now we have access to a great services arm, and we get to work with HP's hardware server team. Suddenly there are all sorts of things possible when they weren't possible before. Actually the biggest issue is prioritizing all of those.

CRN: How does Autonomy's technology position HP against its competitors?

The reason why Autonomy was so valuable is it's a unique asset. There's nothing out there that has the ability and scale to understand the meaning of human-friendly information. It's 90 percent of the information that's out there, and it's all the interesting stuff. If you're going to find a fraud, you'll find it in e-mail.

Customers don't live their lives in rows and columns. They don't sense database tables -- they call you up, they Tweet, they come to WorkSite [Autonomy's document and e-mail management solution], and that's all unstructured information. There's been an explosion of video, Voice-over-IP -- this is all about understanding that information. No one else does that. Most of HP's competitors have to license that technology from HP.

PC owners almost certainly have Autonomy inside some of the products on their PCs already. Adobe and Symantec are just two examples of vendors that license Autonomy technology through OEM agreements. 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.

CRN: What does Autonomy's cloud computing business look like?

We run one of the world's largest clouds -- we have about 40 petabytes of customer information, which I think makes it the world's largest heterogeneous cloud. It's got all types of information, e-mail and video and audio and documents. And we have a whole set of expertise in running a cloud for our customers.

Cloud is incredibly strong for Autonomy -- about one-third of our business is cloud right now. Customers love it. One interesting thing is that it's no longer the IT buyer that buys cloud. You're seeing the purchases come directly from business units without their own IT.