Mike Lynch has emerged in fine form from the furore surrounding HP's £6.7 billion purchase of Autonomy, the firm he founded in Cambridge some 15 years ago.

Mike Lynch has emerged in fine form from the furore surrounding HP's £6.7 billion purchase of Autonomy, the firm he founded in Cambridge some 15 years ago.

The late summer announcement that Britain's biggest software company would lose its independence was wrapped up in a range of other announcements that were meant to fundamentally reposition HP for the next decade.

But instead of acclaiming the Autonomy acquisition, HP customers and shareholders reacted with bewilderment and sometimes fury to the US giant's wider plans to reinvent itself as a software company.

Autonomy shareholders didn't seem that enthusiastic about the deal either. Indeed, HP was forced to extend the deadline for the takeover bid to be accepted when fewer than half of shareholders voted in favour at the first closing date in September.

The potential benefits of bringing Autonomy under the wing of HP were obscured by the reaction to plans to spin off HP's PC business and to leave the webOS tablet business just six months after delivering its first product, signing the death certificate for its TouchPad tablets and smartphones.

While Lynch's shareholders were considering their future, HP CEO Léo Apotheker, who had signed the Autonomy deal, was sacked and replaced by former eBay CEO Meg Whitman, after less than a year in the job.

Now the dust has settled Lynch, with £500million to his name, has emerged unscathed, enthusiastic about his future with HP and about his ability to maintain his autonomy and the company's independence from interference from across the pond.

Unscathed, but not unchanged. The presence of a PR minder in his first major interview since the acquisition indicates that Lynch is not quite the man he used to be. Although his PR minder insists her joining Autonomy around the time of the HP acquisition was just a coincidence, it was certainly different to two years ago, when Computerworld UK's sister title CIO Magazine interviewed him free of any corporate entourage.

Yet despite this, Lynch has retained many of his more admirable qualities. Although clearly busy, rushing from one interview room to another at the company's plush offices just off London's Pall Mall, he is far from arrogant and is still not afraid to voice his opinions.

Probably because he is determined to keep the firm operating, true to its name, autonomously from the new parent company.

"The way the culture of Autonomy is being maintained is it is being kept separated [from HP]," says Lynch.

And if ever HP feels the need to interfere, no matter how well-meaning its intentions, Lynch says a 'bat phone' gives him direct access to the person he needs to talk to in order to ward off the attention.

Lynch is, inevitably keen to reiterate the logic behind the merger with HP. The message got lost, he believes, in the simultaneous announcements that then-CEO of HP Léo Apotheker made and in his subsequent dismissal.

What should have been communicated, says Lynch, is that the acquisition marks a new future for Autonomy, where it now has access to hardware and services it did not have before.

"It is about the power of Autonomy with everything else. It's not Autonomy on its own," Lynch says, insisting that Autonomy can both operate separately and collaborate with HP on products and services at the same time.

Autonomy provides enterprise search technology that it claims uses 'meaning-based computing' to sort, make sense and make use of the growing amount of unstructured – or as Lynch calls it, "human-friendly" – data, such as emails, videos and images.

The company says its technology is the only one that can do this, and that other companies claiming to be able to do the same are talking instead about traditional unstructured machine data, such as weblogs and event logs, rather than the human-friendly data.

In a gentle dig at rival 'Big Data' technologies, such as Hadoop and in-memory databases, Lynch says these approaches only enable queries to be executed more efficiently or faster, rather than finding meaning in unstructured data, such as email.

Together with HP's old IM software business and Vertica, the analytics company HP acquired in February, Autonomy now forms one of the six business units at HP, called Autonomy IM.

This means that Lynch reports directly to CEO Meg Whitman, who he says "completely backs" the acquisition.

"The explanation Meg gives is this is about revenue synergies, the technologies being used together, rather than cost synergies."

To prove this, Lynch reveals that Autonomy has not lost "one significant member of staff" through the acquisition, which even he admits was better than expected. Insisting that Autonomy's people are the company's asset, he attributes this success to being able to reassure employees that their culture would not be affected, while explaining the benefits of having access to all HP's assets.

Employee loyalty and dedication to the Autonomy 'cause' also helps, presumably.

"If you want a nine-to-five job this is not a great place, not because of the hours, but because of the mindset," Lynch says. "The people here are all on quite a mission. It's a little bit more than a normal job. They understand now that we have a lot more resources, scale and reach to make that happen."

"Unless you're into the cause, there are probably easier places to be because people do work hard here and they do get excited. You have to want to change the world," he adds.

Although the buyout of a UK firm by a larger American outfit produced the usual cries of 'British brain drain', Lynch scoffs at this.

He argues that, attractive though it may sound, unless all the experts currently based at Autonomy's research base in Cambridge can be persuaded to move to California, the UK is not going to lose its R&D.

What does worry Lynch, though, is the future talent pipeline.

At the moment, the output from universities is very good, he says, but the UK needs to ensure that it stays this way, for the sake of the economy.

"We would love to have lots of people learning ancient Assyrian, but frankly, we need mathematicians, engineers and computer scientists," he says.

But Lynch believes that the real problem is at school, something that the government has only recently decided to begin addressing, with the help of the NextGen Skills campaign, following harsh criticism from Google CEO Eric Schmidt.

"The attainment of maths for high school UK students is falling through the floor, which is horrific. That has got to be turned around. It's really quite a questionable situation," Lynch says emphatically.


While Lynch is enthusiastic about Autonomy's future with HP, he becomes really animated when talking about the investor community and almost misty-eyed when talking about start-ups.

Lynch was on the board of trustees at the National Endowment for Science, Technology and the Arts (NESTA) and served on its investment committee as chair from January 2010 until a couple of months ago, where his aim was to boost start-ups in the UK.

The passion may stem from what Lynch has learned from his own experiences of the "games" played by the investor community.

Autonomy has been accused, for example, of growing more through acquisition than organically – which Lynch vehemently denies.

"We're the least acquisitive of any software company our size. Look at the number - 90 percent of Autonomy's growth came organically. It's a purely bizarre, London hedge fund angle to make the stock move on a certain day," he argues.

He also claims that the assumption is irrelevant, because not only were nearly all of the companies acquired by Autonomy unprofitable, but the firm's stock was apparently the most attractive compared to any other FTSE350 stocks for seven years.

Other technology start-ups should also be able to reach this point, Lynch says. He believes that the UK needs to grow technology companies up to FTSE100 size in order to create an investment community that supports start-ups. In turn, by enabling small businesses to grow into large, multi-national companies, more people can be trained in the art of starting their own businesses.

But at the moment, start-ups are being swallowed up by larger companies before they have a chance to reach this stage.

"It's fine if these saplings grow into mighty oaks, but what actually happens is we as companies come and acquire them when they're at £50 million [capital]. Because of that, they don't get to £5 billion and to train more people and create that virtual investment cycle," says Lynch.

Recognising the risks of waiting for another investor to come by with a bigger offer, however, he does understand why small firms would accept the early investment before growing further organically.

He describes, for example, Facebook founder Mark Zuckerberg's decision to turn down a billion dollars of investment as "frankly ludicrous", but admits: "That's worked very well for Mark, [but] I know 10 other cases where it went the other way."

But the real barrier is the UK's over-cautious VC community, Lynch says, which allows the £50 million sales to take place because investors have not seen many £60 million companies successfully go onto the stock market.


Perhaps another indication of Autonomy's independence from its corporate American parent is Lynch's willingness to court controversy. Prefacing some statements with 'you'll get letters on this, but...', shows he is fully aware of it.

One of his ideas is for the government to construct capital gains tax breaks for genuine IT entrepreneurs ("some young person who mortgages their house, stays up all night for three years, creates a business").

"Why? Because you'll make more tax as long as you tie that to the fact that they employ 100 people at the end of the process," he explains.

In another line of thought, he broaches the subject of immigration: "You go to Silicon Valley and almost no one there comes from Silicon Valley. What it does is take the very brightest people in the world and welcomes them and they set up businesses and employ the locals.

"I'm not talking about displacing normal IT jobs, I'm talking about some world expert in semiconductors. [But] that gets wrapped up in the Polish plumber debate."

But Lynch is equally bolshie when it comes to fighting off scandals manufactured by legendarily outspoken Larry Ellison, CEO of Oracle, which claims to have a rival technology that allows it to manage unstructured data.

When the HP-Autonomy deal was announced, Oracle released an unusual press release announcing that it had turned down a chance to bid for Autonomy. When Lynch denied this, Oracle accused him of lying.

It has since transpired that the sales presentation slides that Oracle alleged Lynch had personally used to pitch Autonomy to Oracle's president Mark Hurd had been created by a Qatalyst investment banker who had sent the slides to Hurd as part of an independent pitch.

"I gave a very nice quote [to the New York Times]," Lynch says, clearly chuffed. "I said, obviously, they have trouble managing their unstructured data."

Lynch can take pleasure in small victories like this, but it probably won't end there.

A raft of new Autonomy-embedded HP hardware and services are expected to be released in the coming months, including something particularly special that Lynch promises will transform the printer market.

This does not even encompass a little side project, an augmented reality technology called Aurasma, that Lynch has conjured up in his spare time, which – like meaning-based computing – he expects will change the world.