HP and Autonomy: A Strategic Misfire
Rob Hemsath
Strayer University

Contemporary Business BS508
Dr. Antoinette Bridges
May 19, 2014
Abstract
Hewlett Packard’s 2011 Acquisition of Autonomy Corporation proved to be disastrous for the company’s financial status and reputation. While many have cited it as a poor decision, it was poor execution and HP’s internal conflicts that created a situation that resulted in HP writing of $8.8 Billion dollars of Autonomy’s value. HP’s relationships with its employees, shareholders, and partners have been damaged. The acquisition, therefore, has proven an example of poor execution.

If the purpose of a merger or acquisition is to increase the economic value of the resulting consolidated corporate enterprise, the 2011 acquisition of British software company Autonomy Corporation by Hewlett Packard failed on several levels. HP’s corporate culture was such that even the decision for the purchase was fraught with internal conflict and began on an inauspicious note. When Autonomy was folded into HP, HP’s management structure did not fully integrate the new asset into the corporate line, quickly losing any industry advantage the acquisition would have brought. In the end, HP wrote down $8.8 Billion of the value of Autonomy and is struggling to reassert it’s once dominate position in the industry. The acquisition of Autonomy, therefore, was poorly executed and caused severe damage for the future of HP.
HP had seen several years of internal conflict and struggles leading up to their decision to purchase Autonomy. On the surface, however, the company seemed strong in the months leading up to the 2011 acquisition. During the five years that CEO Mark Hurd had been in charge, earnings per share had quadrupled. The stock price had doubled. HP led the industry in PC shipments, Printers, and servers (Bandler & Burke, 2012).