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Mike Simons is the Editor of ComputerWorldUK and Techworld. He joined IDG in 2006 after almost a decade at Computer Weekly. An award winning IT and business journalist, Mike has a particularly focused on major IT projects and public sector IT. His fascination with the business and social impact of technology began at university, where he obtained an MSc at the Science Policy Research Unit of Sussex University.

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Steve Jobs, Mike Lynch and the future of UK IT

Will a new breed of agile, lightweight software suppliers emerge?

Article comments
Mike Lynch might not be Steve Jobs, but he has done all right for himself and for the UK IT industry.

The barrage of articles on Steve Jobs' genius at Apple and the speculation on the future of his company has drowned out concern about HP’s takeover of Lynch’s Autonomy, HP’s dramatic share price decline and musings on the future of the British software industry.

I’ve never been a believer in the ‘Great Man’ view of history, or the charismatic leader approach to management - though the IT industry seems to revel in such concepts.

Perhaps Steve Jobs fits the bill. Forrester analyst Josh Bernoff makes a convincing case in his blog post, The meaning of Steve.

However, most superstar leaders of the IT supplier industry strike me as being extremely gifted but more importantly, in the right place at the right time.

The key is, the right pace at the right time, and that brings us back to Mike Lynch, the future of Autonomy and the software industry in the UK.

Cambridge in 1996 was not Silicon Valley, but Lynch and a few others did manage to create an innovation hub there. Despite this success, there is a constant refrain about Britain’s inability to nurture and bringing to market innovative IT companies.

Veteran analyst Richard Holway marked Autonomy’s sale this way. "What I wanted,” he wrote, “was for Autonomy to stay independent and become a UK-HQed global player of substance to rival Microsoft, Google and Oracle.”

Why didn’t that happen, he asked? “We clearly have the expertise in the UK. With Lynch, we have the leadership. But clearly we didn’t have a stock market in London willing to price Autonomy at the ‘right’ level. At the end of the day, HP was prepared to pay a 78% premium. And I doubt if that was too far off what others like Microsoft, IBM etc would have paid either
…. Until we start to value our own software companies at the ‘right’ level, it is inevitable that they will get taken out. In the past, that has usually been negative for the UK tech scene. I’d love to think HP/Autonomy is the exception but…”

Holway suggested two scenarios coming out of HP’s take over of Autonomy. The first is where Autonomy remains Cambridge-based, (relatively) autonomous and thrives. “Expertise flocks to the area and multiple new start-ups are created to ‘service’ the new giant (as has happened around Microsoft and Google in the US). HP’s new Software operation provides even more entry level jobs in the UK.”

The other, more likely scenario, according to Holway, is that HP’s expectations are not met. The corporate machine descends on Autonomy and Lynch quits, “either to form new Cambridge based start-ups or tend his sheep (or both). Newly enriched Autonomy staff follow suit.” HP then decides to manage the operation from the US and takes a number of key engineers with it. As a result, “Entry level recruitment in Cambridge stalls. The Cambridge Cluster is seriously weakened.”

Call me naïve perhaps, but I am more optimistic than that, even if Holway’s negative scenario begins to play out.

Perhaps a dispersal of the talent around Autonomy could lead to a flowering of innovation and opportunity in the UK rather than its demise, even if it does not produce the next Google.

We are moving to a world of ligh weight apps, of Software as a Service, where enterprises want rapid ROI on the technology they buy. Will the HP money provide the seed capital for a new breed of lightweight, agile software suppliers?

That is what happens with buyout money in Silicon Valley. The innovators can fund themselves and the development of their next project for longer before having to call on VC money. If the City Of London isn’t prepared to value IT innovation appropriately, then maybe IT innovators will now be able to put their money where their mouth is. Let’s hope so, particulalry if Holway’s optimistic scenario for the HP-Autonomy deal doesn’t pan out. We need it .

With IT departments caught in a relentless drive to cut costs and industrialise or offshore IT jobs, we really do need a series of UK-based software poster boys and girls to maintain the buzz round our industry.

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