Like I’ve been saying all year, e-discovery is hot. Now there are 10,000,000,000 more reasons to believe it. Like they say, money doesn’t talk, it screams. See The Word is Out: e-Disco is the Hot New Dance; 2nd Addendum to e-Disco is Hot: Clearwell Sells for $410 Million!; Going “Gaga” Over Big Deals and Malpractice in e-Discovery.
Hewlett-Packard’s purchase of Autonomy Corp. for Ten Billion Dollars is major news.
This purchase shows that the largest IT corporations now all understand that old-box hardware is yesterday’s commodity with no potential for growth. So too are the printers that go with the old boxes and try in vain to perpetuate the ancient world of paper. It is not surprising that HP also announced its plans to spin-off its personal computer business. The real money, the future, the growth that investor’s crave, is in information services. HP, and the others that I predict will soon follow in their footsteps, are all following the successful path of IBM.
This bodes well for e-discovery and is a harbinger for many more future M&A activities. I expect to see similar big moves by Microsoft, Dell, Google, and others within the next year or two. They are all cash rich and need to position themselves better for the next generation of information processing and services. Information management is the place to be. Maybe even the two biggest fish of all, Apple and IBM, will become interested. IBM has had their toe in e-discovery waters for years, but has never made a big move. I kind of doubt Apple needs to expand here, but who knows, they have more cash than the federal government.
The little vendors had better hang onto their hats and find a partner soon. The big boys are moving into town. If they don’t buy you, they may squish you.
The consumers will benefit, at least for the short term, as competition heats up. I would expect to see the big companies use their pricing power to put the heat on the fragile small companies. The long term is a different story, but that is too far down the road to worry about now. I think the difficulty of big companies to innovate will likely protect us. Aside from Apple, can you think of any big multinational that has been a real innovator? That is what small companies do best. Their only real protection from the big fish is to stay creative and take the chances that most big bureaucracies are incapable of.