The Hewlett-Packard Co. just wrote down more than $5 billion of the roughly $11 billion it paid last year for the software company Autonomy due to what it said were accounting irregularities and plain misrepresentations.  Autonomy founder Mike Lynch shot back that HP bungled the integration.
 
The public spat hasn’t distracted bloggers and other critics enough to keep them from concluding that this is just another failed merger, the garden variety of strategic blunder.
 
And, it’s another object lesson for the leaders of mature companies tempted to pay dearly for acquisitions as a way to grab a technology platform for growth.
 
Wrong lesson.
 
Autonomy had developed pattern-seeking algorithms incorporated into software tools to help organizations analyze data, search an entire organization’s data files, fine-tune marketing pitches, and other applications.  While Autonomy had lots of customers, this deal represented a toehold in the “Big Data” future for HP.
 
HP was founded by innovators to be an innovative company.  Many bright engineers surely work there today, but in an organization that now strikes most outsiders as bureaucratic, cautious, and focused mostly on projects to support current customers and product lines.
 
HP may have chosen poorly or overpaid for the Autonomy deal, but acquiring a technology platform is not an inherently flawed strategy.  Management teams of mature companies need to think of acquisitions like this as “catch up” research and development spending.  And thus there is risk, lots of risk.
 
But if the lesson is to avoid the risk, critics need to understand that management’s job is managing risk, not avoiding it. And, the greater risk is doing nothing.