Woz on Microsoft: Whoa! They really changed things drastically. Whoa!
Plus: 'I'm not going to be HP's scapegoat!'
Quotw This was the week when HP finally realised that maybe slurping Autonomy a year ago wasn't such a good idea after all.
Back in the days of Mad Leo Apotheker, HP agreed to fork out over $10bn for the Cambridge-based enterprise search and business intelligence software firm in a bid to transform itself into a software and enterprise service company. Apotheker promptly tendered his resignation over the eye-watering price tag, as well as those incidents with the PC biz and WebOS.
Now HP is saying that the reason it took an $8.8bn writedown for the firm is because Autonomy misrepresented itself a year ago. The firm said:
The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP's acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge.
Mike Lynch, Autonomy's founder and an ex-employee of HP, which let him go along with some 26,999 others in May this year, immediately hit back, pointing out that it was a bit weird that HP only realised this now and lamenting the "hundreds of talented people" offed by the firm, presumably including himself. He said bitterly:
[HP just] delivered its worst results in 70 years - perhaps it's a coincidence, perhaps it's not.
Nevertheless, HP has called in the financial feds, both in the US and in Blighty. The firm said:
HP is extremely disappointed to find that some former members of Autonomy's management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy's acquisition by HP. These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management's ability to fairly value Autonomy at the time of the deal.
Lynch said that was rubbish, Autonomy was audited by Deloitte every quarter and the accountancy firm had never found any problems:
I've had a chance to read a bit of what's been said and it just doesn't make any sense, I flatly refute that there is anything in it.
I'm not going to be HP's scapegoat for the fact the company is in utter disarray.
He also lamented the loss of Leo Apotheker from HP and said it all started to go downhill after he left:
Leo Apotheker who did the deal and Shane Robinson the CTO that saw the vision of taking Autonomy and building a big software business in HP, the problem was that they were ousted in a coup d'etat, one of the many that goes on there.
Suddenly we were in a situation where we no longer fitted what was a flip flopping strategy; at that point things started to unravel.
Meanwhile, opinion is divided on Microsoft's current direction. Steve Wozniak reckons the firm's new innovations are "worrying", while Apple appears to be standing still. He said of Redmond:
I've seen more of the type of innovation where you see something: 'Whoa! They really changed things drastically. Whoa! They aren't even going in the same direction as everyone else'.
The firm is so innovative, it might even be a threat to Apple, Wozniak said:
I fear that Microsoft might have been sitting in their labs, trying to innovate, with a formula: 'How do we come up with new ideas? Let's not keep doing the same things as before, just the newer versions of them'.
They might have been doing that for three years, while Apple was just used to cranking out the newest iPhone and falling a little behind. And that worries me greatly.
But UI usability guru Jakob Nielsen clearly reckons that Microsoft has innovated a bit too much with its fondleslab/PC OS mashup Windows 8. Nielsen had complaints about LiveTiles, complicated gestures and just the general style of the whole thing.
He was particularly put off by Redmond's attempts to build one flavour of OS for all occasions, saying it ended up not working properly on PCs or tablets.
Windows 8 encompasses two UI styles within one product. Windows 8 on mobile devices and tablets is akin to Dr Jekyll: a tortured soul hoping for redemption. On a regular PC, Windows 8 is Mr Hyde: a monster that terrorises poor office workers and strangles their productivity.
Samsung's bid to dig itself out of trouble in that US patent case where Apple managed to take $1bn off the South Korean firm took a hopeful turn this week. Samsung has now persuaded the judge to let it have a peek at the terms of HTC's settlement deal with the fruity firm for a 10-year licence.
Sammy asked the judge to force Apple to hand over the details as part of its argument that Cupertino doesn't need to ban Samsung devices in the US, just get some money out of the company. Apple told the court it was perfectly willing to help out, it just wouldn't be giving out the actual figures that HTC is paying and how they decided on that sum. The firm said in a court filing:
HTC has advised the parties that it is willing to acquiesce to Apple’s production of the agreement on two conditions: (1) the Agreement must be marked Highly Confidential – Attorneys’ Eyes Only under the protective order; and (2) the consideration amount must be redacted... Samsung has agreed to both conditions.
But the judge threw cold water on that idea:
Although the court is more than a little skeptical of Samsung’s arguments regarding the financial terms, Rule 26 supplies a broad standard of relevance.
Many third parties to this case have had their licensing agreements disclosed – without any redaction of financial terms – subject to an Attorneys-Eyes-Only designation because the confidential financial terms were clearly relevant to the dispute between Apple and Samsung.
HTC is not entitled to special treatment, especially when it has recognised the general sufficiency of the protective order and the integrity of Samsung’s outside counsel.
Unfortunately, only the lawyers will get to see the true cost of getting Apple off your back, though that hasn't stopped pundits from guessing. The popular theory is that HTC gives the fruity firm somewhere between $6 and $10 for every Android phone, but the Taiwanese firm has called the upper edge of that range "ridiculous". Chief exec Peter Chou said:
I think that these estimates are baseless and very, very wrong. It is a outrageous number, but I'm not going to comment anything on a specific number. I believe we have a very, very happy settlement and a good ending. ®