Good news - bad news on Autonomy today.
First the good news: Autonomy reports sales of $415M for the first half of the year, in the middle of their predicted range. On top of that, Autonomy announced a $15M deal with an unnamed "major global bank". And they are on target to grow the business 17% compared to last year (Forbes)
Now the bad news: as Avi Rappoport reported on Twitter Friday afternoon, Autonomy shares took a 16% dive during the day. The Financial Times reported the drop was based on lower forecasts and Mike Lynch's remarks "about volatility in customers view of the current macroeconomic situation".
For some time now we have seen Autonomy less as an enterprise search company - even though they claim to "own search" on billboards in the San Francisco area - and more of a 'compliance' play. Steve Arnold has even made the same observation (Autonomy Not (sic) Longer a Search Vendor); and one of the tech guys we know who worked for Autonomy until recently tells us that he has not worked on a pure search project for years unless the customer was also a compliance customer.
Autonomy has a powerful engine that has pretty darned good results right out of the box. And the IDX file that holds data to be indexed provides a really straightforward way to interface to other platforms - probably one reason Autonomy can integrate with new technologies they acquire.
But IDOL is a premium product which often requires lengthy, complex integrations. I can see a few trends that could be causing worries in Cambridge as much as indecisive prospects:
- Very capable open source alternatives
- More aggressive pricing by major competitors
- More competition in compliance opportunities
- Competitive products that provide GUI-based tools for managing search
Don't get me wrong: IDOL is a real winner in the right environments when it's configured properly. I'm just wondering if competitors are gaining on Autonomy; and whether customers, wary of price/performance, might start to shy away from big and complex.