Why HP Wants Autonomy: Math Skills

News broke today that HP, the world’s biggest manufacturer of personal computers, had offered to acquire the British software company Autonomy. While the latter is hardly a household name, it gets close to $1 billion in revenue each year from software that can turn huge volumes of images, text, and video into useful statistics and insights for businesses.

Acquiring that technology will enable HP to expand its business software products, and put it in a good position to exploit a trend dubbed “big data.” Businesses are increasingly interested in finding ways to distill meaning from the growing piles of digital information, from tweets to video, flowing through our lives at work and at home.

Whit Andrews, a vice president and analyst with Gartner who specializes in technology that processes and organizes information, says that Autonomy was years ahead of other companies in making such analysis possible. “They have had this vision for over a decade that there was immense value in being able to do statistical analysis for data like audio and video that conventional technology cannot handle.”

Autonomy’s products enable companies to do things like analyze transcripts from call centers; discover which sales strategies work best; and process troves of e-mails and other documents to match whether what is being said and done comports with a company’s legal responsibilities. Such analysis can be automated using software that looks for certain things automatically, or performed manually by a person entering queries, and then sifting through the results themselves.

Andrews says business and technology companies are beginning to realize that both types of analysis could offer much more than conventional approaches, which rely on so-called “structured” data, such as a spreadsheet organized into labelled columns. “Business analytics is about structured data, like spreadsheets,” says Andrews. “Autonomy does an exceptional job at analyzing unstructured data, which may prove even more valuable.”

In an interview with Technology Review published last year, Autonomy’s founder and CEO, Mike Lynch, estimated that about 85 percent of the information inside a business is unstructured. “[W]e are human beings, and unstructured information is at the core of everything we do,” he said. “Most business is done using this kind of human-friendly information.”

Lynch founded the company to commercialize statistical techniques developed at Cambridge University based on Bayesian inference, a mathematical technique that can estimate the probability of potential outcomes based on previous evidence.

Companies like IBM are working hard on their own approaches to analyzing unstructured data, but Autonomy has been at it for longer, says Andrews. Acquiring the company could enable HP to take a much more dominant position in the growing market for what Autonomy’s Lynch dubs “meaning-based computing.”