Michael Dell & Larry Ellison Agree On One Thing: Autonomy Was Overpriced

“It was shopped to us as well,” Michael Dell said in an interview  discussing Autonomy, “[but] not at that price.”

The entrepreneur disclosed for the first time this week that Autonomy was offered up to his company, but that he declined the proposition for the same reason Oracle head Larry Ellison was so critical of it. Even HP CEO Meg Whitman commented about the UK-based analytics firm’s ‘willfully inflated’ value just a short year after her company acquired it for over $10 billion.

Here are some additional highlights from the session with Dell:

Michael Dell echoed their concerns [referring to HP investors and analysts who follow the stock], saying he had been hugely surprised at the size of the premium HP was willing to pay.

“The premium that you pay is in some way a measurement of the risk that you’re willing to take on. If you pay a small premium relative to the market’s then current opinion, you are actually not taking on very much risk, but if you pay an unbelievably large premium, you are taking on an unbelievably large risk,” he said.

The exact details of the Autonomy deal – or rather what went wrong with it – were only revealed at Hewlett-Packard’s last earnings call.  Meg Whitman announced that HP had to make an $8.8 billion writedown on the deal, over half of which she attributed to fraudulent accounting practices on Autonomy’s end.  HP closed the quarter with a massive loss.

The news caused the hardware giant’s stock to fall, triggering official inquires into the matter, but it’s not all doom and gloom as far as Autonomy is concerned.  The firm’s software is still a huge asset for HP, as SiliconAngle founding editor Mark Hopkins noted in an interview.   Andrew Joiner, GM of Emerging Technologies and Marketing for Autonomy, iterated this view in a session with John Furrier and Dave Vellante at HP Discover 2012 last week.