Analysis

posted on 25 April 2008 16:45

When Autonomy bought Zantaz it thought it was buying a kettle but found a toaster in the box. That was the description given by a person familiar with the situation.

There have been propfound cultural differences exposed between the license-centric Autonomy operation and the dual license and service business model of Zantaz with its EAS offering.

Autonomy, according to the person does not have a VAR channel, pursuing instead direct, OEM and SI (system integrator) sales, and didn't know how to manage the one it inherited by buying Zantaz. It ousted Zantaz' world-wide head of channel sales and other channel management people left, including the UK channel manager and others who all joined Mimosa.

The net effect was that the Zantaz channel became somewhat disaffected.

Other senior Zantaz sales and market people left after the acquisition. For example, Georges Sabongui, Zantaz'  Senior Director of Discovery Management and Content Archiving Sales, left to join Recommind as Vice President of Worldwide Sales. David Baskin, who was Zantaz' Director of Product Marketing, is now Recommind's VP of Product Management.

It's suggested that EAS sales have shrunk markedly since the acquisition. Overall the perception is that Zantaz is outside Autonomy's core business and Autonomy has got rid of the people who understood it.

What was hoped to be a golden goose is turning into something much less attractive and proving much harder for Autonomy to digest because it doesn't understand the business and has lost the people who do.

However, in its first quarter, 2008, results Autonomy posted a revenue increase of 61 percent to $105.1 million, compared to the year-ago quarter's $65.5 million. Autonomy attributed the rise to strong organic growth and the contribution from Zantaz.

^{[Chris Mellor.]}