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Is HP Right? Autonomy Salesperson Shares Internal Emails

Soulskill posted about a year and a half ago | from the fingers-in-the-cookie-jar dept.

HP 92

Julie188 writes "You know how HP said it uncovered $5 billion worth of 'improper' revenue at Autonomy? One thing HP has accused Autonomy of doing is booking software-as-a-service contracts as software licensing deals. So how might that type of accounting work? A former Autonomy salesperson fighting a legal battle with HP says she's seen it happen firsthand. She's shared internal Autonomy emails and documents that show the details of one deal. '[While working for software company CA, Virginia Briody] had closed a four-year $1.22 million hosting/software-as-a-service deal with a customer, Pioneer Investments, and was paid her full commission, over $100,000, she says. Autonomy bought the software unit from CA on June 9, 2010, and Briody became an employee of Autonomy and Autonomy inherited the Pioneer contract. But there was an issue. Autonomy didn't acquire all the pieces called for in the original contract, Briody says. It didn't have a partnership with the hosting facility and it didn't gain from CA a critical piece of compliance software the customer needed, she says. Autonomy needed to find substitutions or Pioneer would cancel the contract, Briody says. So in the fall of 2010, she signed a new deal with Pioneer and walked away with a four-year, $1.859 million contract of which Autonomy execs considered $1.8 million as new revenue, she says.'"

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92 comments

Ah, the new Slashdot... (3, Insightful)

Anonymous Coward | about a year and a half ago | (#42489019)

Not news for nerds, stuff that doesn't matter unless you wear a $1000 suit.

Re:Ah, the new Slashdot... (-1, Troll)

CryptoJones (565561) | about a year and a half ago | (#42489077)

Some of us (with social skills and upward mobility) do quite well for ourselves, Thank You.

Re:Ah, the new Slashdot... (4, Funny)

presidenteloco (659168) | about a year and a half ago | (#42489123)

Upward Mobility. (N) Defn: Momentum that may be gained by a swift kick in the assets.

Re:Ah, the new Slashdot... (1)

Anonymous Coward | about a year and a half ago | (#42489127)

Suits like you don't belong here. You're the reason there are so many 'business intelegence' style ads. Go away.

Re:Ah, the new Slashdot... (0)

Anonymous Coward | about a year and a half ago | (#42489645)

Your spelling, or lack thereof, discard anything worthwhile you might have said, dork.

Re:Ah, the new Slashdot... (0)

Anonymous Coward | about a year and a half ago | (#42492513)

Your grammar is terrible.

Re:Ah, the new Slashdot... (1)

K. S. Kyosuke (729550) | about a year and a half ago | (#42489151)

upward mobility

I always thought that "upward mobility" refers to what happens to you when you step on a land mine. But then again, I'm not American. :-)

Re:Ah, the new Slashdot... (1)

davester666 (731373) | about a year and a half ago | (#42489271)

You're welcome.

We always remember to leave a few behind when we close up shop and move on to the next venue.

Re:Ah, the new Slashdot... (2)

discord5 (798235) | about a year and a half ago | (#42489359)

upward mobility

That's ok, I've got an adjustable chair. It can go both up and down with the help of a lever.

Now, don't you have some TPS reports to file or something?

Re:Ah, the new Slashdot... (1)

Anonymous Coward | about a year and a half ago | (#42489563)

Are there suits that cost less than $1000?

Re:Ah, the new Slashdot... (4, Insightful)

phantomfive (622387) | about a year and a half ago | (#42489709)

Not news for nerds, stuff that doesn't matter unless you wear a $1000 suit.

Or unless you're thinking of starting a company, working in a startup, or otherwise deal with startups, which actually covers a lot of people on Slashdot.

Re:Ah, the new Slashdot... (1)

kenh (9056) | about a year and a half ago | (#42495469)

Or unless you're thinking of starting a company, working in a startup, or otherwise deal with startups, which actually covers a lot of people on Slashdot.

What if you actually start a company or work for a startup?

Is slashdot home for the Walter Mitty's among us?

Re:Ah, the new Slashdot... (0)

Anonymous Coward | about a year and a half ago | (#42496287)

Oh, you are sooo cool and cynical.

I'll drop you a bone: Before you have not imagined doing something, you can not and will not do it.

Re:Ah, the new Slashdot... (1)

phantomfive (622387) | about a year and a half ago | (#42496489)

Yeah, there are plenty of people here who work for startups.

Of course, if you start a company you don't have time for anything else but sleep......

Re:Ah, the new Slashdot... (1)

ziggit (811520) | about a year and a half ago | (#42490209)

I don't wear a suit, as much as I wear whatever happens to be closest to me when I wake up, but I care.

That being said, I work at HP, and its nice to know what's going on with the company so I can plan for any future Resume Generating Events.

Re:Ah, the new Slashdot... (-1)

hufayasr (2809175) | about a year and a half ago | (#42490583)

If you think Stephanie`s story is terrific,, two weeks ago my uncle's step daughter basically brought in $4892 just sitting there an eleven hour week from there house and their best friend's sister`s neighbour has done this for 6 months and got more than $4892 part time at their pc. applie the tips at this website... http://www.cloud65.com/ [cloud65.com]

Re:Ah, the new Slashdot... (0)

Anonymous Coward | about a year and a half ago | (#42492463)

It matters to me, as this acqusition was something that axed a job as a software developer I had lined up.

And I don't wear suits. :P

Nice.... (1)

Anonymous Coward | about a year and a half ago | (#42489051)

but did they also pay the commission as a whole new sale?

Re:Nice.... (1)

Smallpond (221300) | about a year and a half ago | (#42489429)

If they charged the customer twice then they should pay the commission twice. Not sure why the customer agreed to this deal, but it looks to me like the salesperson is getting shafted by HP.

I'm not a nerd anymore... (5, Insightful)

war4peace (1628283) | about a year and a half ago | (#42489067)

I read TFS. I understood nothing. My nerd days must be over.
Looks like nowadays nerds are those who have deep insight into financial dirt. Forget computers, gadgetry, coding and Science Fiction. Welcome corporatism, financial stuff, sales and so on.
I'm a sad puppy now.

Re:I'm not a nerd anymore... (5, Interesting)

Rockoon (1252108) | about a year and a half ago | (#42489089)

Real nerds dont restrict themselves to computers, gadgetry, coding, and scifi.

..and how dare you leave out physics/chemistry.

Re:I'm not a nerd anymore... (2)

Enry (630) | about a year and a half ago | (#42489321)

and cooking. Though you could file that under physics and chemistry too. Hrm...

Re:I'm not a nerd anymore... (1)

micheas (231635) | about a year and a half ago | (#42489435)

While the person who taught me how to cook without needing recipes was a physicist I would argue that it cooking is mostly chemistry.

I would classify vinegar cakes as sort of the ultimate nerd baking.

Re:I'm not a nerd anymore... (3, Insightful)

beelsebob (529313) | about a year and a half ago | (#42489811)

I regard beer as the ultimate nerd baking.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42493385)

If you are baking your beer, you are doing it wrong.

Party at my place tonight! (1)

chronokitsune3233 (2170390) | about a year and a half ago | (#42489453)

Highlight of the evening: S'mores made with the help of Bunsen burners!

Be there! (Or I get your share of marshmallows and chocolate!)

Re:I'm not a nerd anymore... (1)

Tablizer (95088) | about a year and a half ago | (#42490205)

Oh no, an "I'm more nerdier than you" pissing match is breaking out on slashdot. It'll end up in a duel to the death via soldering irons.

Re:I'm not a nerd anymore... (1)

war4peace (1628283) | about a year and a half ago | (#42490363)

Neither do they venture into financial filth.

Re:I'm not a nerd anymore... (5, Informative)

jonbryce (703250) | about a year and a half ago | (#42489107)

When they signed the original deal, they should book $25,416.66 as revenue for that month, and the remaining $1,194,583.34 as deferred revenue to be released over the remaining 47 months of the contract. Each month after that, you take $25,416.66 out of deferred revenue and put it in revenue.

When they signed the new deal, they should cancel whatever is left in deferred revenue, put the new deal in deferred revenue and take $38.729.16 per month to revenue.

If there are up-front expenses related to the deal, and sales commission may well be one of them, then they go to prepayments, and you expense them every month along with the released deferred revenue.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42489171)

Man, that makes so much sense. Why didn't they just do THAT?
Now for a rant about how much I hate corporate suits:
I hate corporate suits! /end rant.

Re:I'm not a nerd anymore... (4, Interesting)

pesho (843750) | about a year and a half ago | (#42489391)

Because their business plan was not to run their business, but to sell it as quickly as possible to the first idiot that they can dupe. The bigger the number at the bottom of their accounting sheet, the easier it would have been to get HP's CEO Apotheker salivating. The bigger the potential reward, the less like he was to do his due diligence. This is standard conman operating procedure.If this particular case does not turn out to be an insulated incident it can put a lot of people in jail.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42489661)

Jail, right. You must be joking. He said, she said, we said, they said...then it all just magically goes away,and a lot of attorneys get rich.

Re:I'm not a nerd anymore... (1)

pesho (843750) | about a year and a half ago | (#42490001)

Jail, right. You must be joking. He said, she said, we said, they said...then it all just magically goes away,and a lot of attorneys get rich.

That's what would have happened if Autonomy duped some public office and got away with taxpayer's money. In this case they screwed over HP and as it stands now the former Autonomy executives don't have anybody to watch their back. I can bet that Deloitte, which is also sued by HP, will do their best to pin the blame on them.

Re:I'm not a nerd anymore... (2)

Kjella (173770) | about a year and a half ago | (#42490307)

If this particular case does not turn out to be an insulated incident it can put a lot of people in jail.

Isolated incident, you can only use insulated in the same meaning as shielded. "I try to isolate/insulate/shield my team from management's whims" works but "a shielded incident" doesn't work so "an insulated incident" doesn't either. The reason is isolation is a state but insulation a barrier, so the opposite of isolated is widespread while the opposite of insulated is uninsulated. This has been a service announcement from your friendly neighborhood grammar Nazi.

Re:I'm not a nerd anymore... (4, Interesting)

alexander_686 (957440) | about a year and a half ago | (#42489511)

Because sometimes Autonomy did is the right choice. Companies can either book the revenue upfront or over the lifespan of the contract. No matter which one you pick it can be abused, so the trick is to pick the right one for the situation – which is a subjective accounting decision – and these subjective accounting decisions can be influenced by upper management.

Software Licensing Deals = buy. You buy a car from Ford and finance it though Ford. Ford books the car as a sale up front. This is

Software as Service = Lease: You lease a car for 36months from for and finance it though Ford. Ford books the revenue 1/36 each month.

The accounting issue is that the client was buying software (recognize profit today) and maintenance / support (recognize profit over a period of time) as a single, lump sum. Allocating costs between the 2 is subjective – and open to abuse.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42490079)

We had to fit a car analogy in here somewhere...

Thanks for the breakdown (0)

Anonymous Coward | about a year and a half ago | (#42489295)

I was wondering too. So now, I likely could create a spreadsheet, showing the issue, and how much 'extra' they carried on their books.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42489297)

Yep basic dummy MBA accounting. The question that then remains is if it is so obvious and blatant, why did meg and the rest of the board, who have fiduciary duty and responsibility to the shareholders for proper governance, why did she sign off on it? If they are double dipping these revenues, why couldn't they just examine this deal during due diligence?(

Re:I'm not a nerd anymore... (1)

Anonymous Coward | about a year and a half ago | (#42489331)

Oh wait I'm mistaken. Autonomy bought CA who had the original deal. Revenue streams incoming probably would transfer as present day value as part of purchase price.
This looks legit and isnt really double dipping. Autonomy just bought up a bunch of vendors and contracts to increase their backlog. HP should have checked this as part of their DD.

or just hired a bunch of ./ers to do dd for them. Duh.

Re:I'm not a nerd anymore... (3, Interesting)

todrules (882424) | about a year and a half ago | (#42489339)

They hired Deloitte to do their due diligence. They didn't. This is why HP is now suing Deloitte, because they (allegedly) dropped the ball.

Re:I'm not a nerd anymore... (1)

PolygamousRanchKid (1290638) | about a year and a half ago | (#42489493)

Maybe Autonomy paid Deloitte more than HP . . . ?

Re:I'm not a nerd anymore... (2, Informative)

Anonymous Coward | about a year and a half ago | (#42490085)

That's more or less one of the serious considerations here. http://www.economist.com/news/finance-and-economics/21567953-two-controversies-ensnare-big-four-accountable?fsrc=scn/tw/te/pe/accountable

Re:I'm not a nerd anymore... (4, Insightful)

cheesybagel (670288) | about a year and a half ago | (#42490267)

If it gets really serious they will just change their name and continue operating like Arthur Andersen/Accenture.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42497569)

Andersen Consulting split off and renamed itself to Accenture before Enron was revealed as a sham.

Re:I'm not a nerd anymore... (4, Informative)

Anonymous Coward | about a year and a half ago | (#42489369)

1) It's not obvious from TFA that they were double dipping revenues, but it seems that they improperly recognized revenue up front from a long term consultancy/SaaS contract. If HP, as potential acquirers, were to extrapolate the revenue based on Autonomy being a SaaS business, they would get a misleadingly high figure.

2) The board didn't have access to the numbers on a per-contract level, but they hired two public accounting firms that presumably did.

Boy, the courtroom is going to get crowded over this case. The accounting firms will be pulled in as well to defend their performances. As for the "whistle blower", she seems a tad greedy trying to get paid two fat commissions for the same deal.

Not so greedy (2)

Fencepost (107992) | about a year and a half ago | (#42490541)

Sure she'd like to get the money, but there's also the issue that if the company is going to book revenue in a particular way they have to deal with ALL of the things that go along with that. Companies paying commission don't get to say on one side "this was a great sale and we're going to compensate our executives on a great sales year" and on the other "that's an ok lease agreement you got, too bad commission on those is so low."

That's worse than the old Dilbert where the secretary "neglected" to put anything between the announcements of miserable numbers and an increased United Way push.

Re:I'm not a nerd anymore... (1)

Bearhouse (1034238) | about a year and a half ago | (#42490753)

Why is she greedy? She wants to get paid for doing her job!
- She signs a deal
- She gets paid, so presumably the deal signed is viewed as good one by her boss
- Her company gets bought by some morons, who do not do proper technical/dependency due diligence
- Through no fault of her own, her company cannot honour the original deal; the customer as well as she and her company are all in a jam
- She goes in and renegotiates a new deal for more money

Pay her, take her out to dinner, pay a vacation for her and her partner...she's gold

Re:I'm not a nerd anymore... (1)

Anonymous Coward | about a year and a half ago | (#42490937)

Seems reasonable that she get paid commissions twice, considering she had to make two sales. It's not her fault that Autonomy invalidated her first sale that was already in the can.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42489897)

I'm not sure that the accusation is double counting revenue. It might just be about double counting new business revenue. I know that in my company, the consultants have a revenue target and additionally a new business target which counts revenue derived from either gaining a new client or selling something new to an existing client. High levels of new business revenue mean that you're growing, which is the sort of thing you would tout when looking to sell your business.

Double counting revenue would be obvious and blatant since revenue has to satisfy an accounting balance equation. If you double count revenue, then your books are going to say that you should have some cash or an intangible asset or something on your balance sheet that isn't there, and then when you see that you can trace it back to the double count.

New revenue doesn't have to balance like that because it's not an item that says how much cash is coming in which can be reconciled against the assets you have at the end of the year. It's just the amount off the cash coming in that's due to growth and not due to repeat business. If you overstate it, then you end up overestimating the amount of new business you're getting and you underestimate the amount of old business you're retaining.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42490891)

What gibbereish are you speaking of? "New revenue"? That makes sense as a sales metric, but it has no place in accounting. There's only two kinds of revenue, earned and deferred. SaaS at this level means fixed-length contracts, which makes the schedule of deferred revenue dead simple to properly estimate.

This is not advanced accounting. This is a freshman-midterm-level question.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42491069)

You aren't saying anything that disagrees with me. What I was saying was that I don't think it's plausible that they botched recording an essential accounting item like revenue that badly when it's so easy to calculate and check, and it is much more plausible that they botched a non-GAAP sales metric.

Re:I'm not a nerd anymore... (1)

Anonymous Coward | about a year and a half ago | (#42489349)

Everything you said is exactly correct, I'd only like to add one thing:
Based on the first part of the summary, it sounds like they didn't defer very much to begin with. Booking a SaaS deal as a license means you can take a lot more revenue up front without deferring as much over the 4 years.
If they considered $1.8m out of $1.859 as new revenue, they were apparently only deferring $59k over 4 years (or thereabouts depending on the exact timing of the deals). That's a huge no-no, and should have been discovered with even a cursory audit. Fraud: yes, but it's hard to feel too much sympathy for HP when this sort of thing goes unnoticed.

Herbert Kornfeld Lives! (2)

SuperCharlie (1068072) | about a year and a half ago | (#42489399)

And I was just re-reading the H-Dogs mad Midstate posts last night...

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42494651)

Sometimes the SW is not available as SaaS. Large SW companies such as IBM or Oracle will sell their products through their banks (ie IBM Global Finance or others). The license revenue is then recognized if full at the signing of the contract, even though the customer will pay it over a four or five year period.

Re:I'm not a nerd anymore... (0)

Anonymous Coward | about a year and a half ago | (#42491787)

Lawyers ruin everything.

Texas-style accounting ..... (0)

Anonymous Coward | about a year and a half ago | (#42489099)

Goes to the UK.

Lol, More commissions in the form of lawyer payout (0)

Anonymous Coward | about a year and a half ago | (#42489185)

HP got suckered. Now they find a salesperson that is so greedy they want even more money. Look who comes along and offers some payout to anyone that can help the HP case.

Re:Lol, More commissions in the form of lawyer pay (1)

Frosty Piss (770223) | about a year and a half ago | (#42489223)

HP got suckered.

Just Desserts... They've been suckering their customers since at least Carly Fiorina...

They used to be a tech research titan, now they sell printer ink.

Re:Lol, More commissions in the form of lawyer pay (1)

Anonymous Coward | about a year and a half ago | (#42489343)

Peter Burrows's 2003 biography, "Backfire: Carly Fiorina's High-Stakes Battle for the Soul of Hewlett-Packard," about the former Hewlett-Packard czarina, included background and commentary from Fiorina's first husband, Todd Bartlem. Bartlem comes off as a bitter, wounded, and dare I say truthful commenter on Fiorina's hard-won transformation from world's peppiest receptionist to CEO of a prestigious multinational corporation.

Bartlem describes Fiorina worshiping the book "Dress for Success" like a "Bible," and ditching him without leaving a phone number or forwarding address.

Re:Lol, More commissions in the form of lawyer pay (0)

Anonymous Coward | about a year and a half ago | (#42496009)

And that is HOW the fault of Fiorina ??

It is the fault of the HP heirs and the HP board to hire such a muppet. I assume it was all about "gender empowerment" or other Californian lefty, new-age hippy shit. They should have hired of the class of a Larry Ellison.

But fuck, these guys tend to be not on the market.

Re:Lol, More commissions in the form of lawyer pay (1)

WindBourne (631190) | about a year and a half ago | (#42489345)

Sad, is it not. I loved working for them several decades ago. Learned about the HP way. But now? The HP way, is long away.

Re:Lol, More commissions in the form of lawyer pay (2)

Frosty Piss (770223) | about a year and a half ago | (#42489609)

It is sad.

I've always used HP calculators, my dad tought me RPN, and that's all I've ever used. When I was in school in the 80's, I paid $400 for an HP41 built in Corvallis. When the keys stopped working, I carefully opened the case, cleaned the contacts with a little Carbon Tet and put it back together. Where can you buy a decent RPN device today? Nowhere.

I'm not a hardware guy so I don't use HP scopes (do they even still make bench equipment?), but for my current job with the DoD, I insisted they buy me an RPN calculator. The upside is that no one will steal it off my desk because they can't figure out how to use it.

Today, HO sucks, and unless they want to continue down the road that many tech giants have gone - to exist as brand names only on cheap junk - they need to do something quick.

Prediction: Not going to happen.

Re:Lol, More commissions in the form of lawyer pay (1)

Seraphim1982 (813899) | about a year and a half ago | (#42489719)

I'm not a hardware guy so I don't use HP scopes (do they even still make bench equipment?)

HP's spun off their scientific instruments, electronic test equipment, and a number of things, into Agilent Technologies about 20 years ago. Agilent still makes bench equipment, to the point that I have some pieces of HP/Agilent equipment that are identical except for the corporate logo on them (including having the same model number).

Re:Lol, More commissions in the form of lawyer pay (1)

emt377 (610337) | about a year and a half ago | (#42490231)

The biggest problem was that HP didn't spin off their Corvallis calculator group to Agilent. HP management never understood the fact that HP calculators were predominantly used by the same technical customers as their other instruments - hence HP-IB, HP-IL calculator interfaces, the huge popularity of their EE software packs, etc - and shouldn't have been left to rot with the office equipment business.

Re:Lol, More commissions in the form of lawyer pay (1)

Fnord666 (889225) | about a year and a half ago | (#42490153)

Where can you buy a decent RPN device today?

You buy an older HP calculator on eBay of course.

Re:Lol, More commissions in the form of lawyer pay (1)

PCM2 (4486) | about a year and a half ago | (#42490313)

Where can you buy a decent RPN device today? Nowhere.

Well, nowhere except Amazon I guess. Or TigerDirect, or Best Buy, or whatever ... I have one of these [amazon.com] and it works great. I don't have cause to do a lot of number-crunching most days anymore, though, and the AAA batteries on it tend to run out even after I haven't been using it, so more often than not I end up using an HP48 emulator [google.com] on my Android phone. I do like the real buttons on the standalone calculator, though, so if I had more cause to calculate I'd use that.

Re:Lol, More commissions in the form of lawyer pay (0)

Anonymous Coward | about a year and a half ago | (#42493079)

RPN ("reverse polish notation") is also generically called postfix notation and is differentiated from "polish notation" (prefix notation), and "algebraic notation" (infix notation).

I've used an HP 48G and learned how to use RPN but never understood the point beyond simple arithmetic problems--why am I spending extra work redoing the problem for the stack, entering operations in a different order than the problem shows, rather then entering it from left to right as I see it?

Yeah, okay, there were some interesting things to do with variables and matrices, but I never got really into SysRPL programming after having given up on higher level calculus and linear algebra in five variables.

Re:Lol, More commissions in the form of lawyer pay (1, Flamebait)

msauve (701917) | about a year and a half ago | (#42489509)

That's because the real HP was renamed Agilent. They left the HP name behind with the dregs.

That's what she says, huh? (0)

Anonymous Coward | about a year and a half ago | (#42489191)

She says, Briody says, she says, Briody says, she says.... I like how you mixed that up so that it wasn't at all repetitive.

Shovel faster! (0)

Anonymous Coward | about a year and a half ago | (#42489277)

They're buying it!

Don't get any on your shoes tho. that'll stink forever.

Haha Whitman you dumb cunt (0)

Anonymous Coward | about a year and a half ago | (#42489289)

Keep dragging HP down just like your Governor's campaign. Dumb ass Mattel Barbie CEO, go join Carly in the shithouse where you belong.

What the F**K Am I Reading? (0)

Anonymous Coward | about a year and a half ago | (#42489471)

Really?

One Swallow doesn't make a Summer (0)

Anonymous Coward | about a year and a half ago | (#42489531)

I wonder how many of these contracts would put any material dent in HPs write-offs to date. Several thousand of them methinks...

sounds like that lady (0)

Anonymous Coward | about a year and a half ago | (#42489551)

made a good deal for herself
Tl;Dr

Awful summary (0)

Anonymous Coward | about a year and a half ago | (#42489655)

"...accused Autonomy of doing is booking software-as-a-service contracts as software licensing deals." then goes on to describe booking a revised deal as a new deal i.e. not what HP accused them of.

The real article of course covers this properly.

"A former Autonomy salesperson fighting a legal battle with HP says she's seen it happen firsthand." the nature of that legal battle is not described, losing the relevance that the legal battle is relation to full commission on the revised deal, despite having been paid commission for the original deal.

Awful TFA (0)

Anonymous Coward | about a year and a half ago | (#42489849)

It's not really the summary's fault. This is word-for-word from TFA, which is incoherent and poorly written.

No, they're not right. (0)

Anonymous Coward | about a year and a half ago | (#42489771)

Quote: "One thing HP has accused Autonomy of doing is booking software-as-a-service contracts as software licensing deals."

Booking as the wrong kind of deal WOULD potentially be an underhanded way of recognizing revenue improperly - claiming "We got $120,000 today" when in fact what you really got was an agreement to receive $10,000 a month for 12 months. You didn't really get that cash in hand.

But if you look at TFA, the allegedly "smoking gun" portion of the internal e-mail reads

"I appreciate the customer’s demands are driving the current structure but to get rev rec on the licence we need to get the following:
1) Substantial payment upfront and following payments not dragging out over whole term
2) Separate monthly hosting fees"

And the author's summary contains:

The whole saga is, interesting, however, in that it is a look at how, as Briody alleges, Autonomy might have structured a SaaS deal to look more like a licensing deal primarily by
writing a contract that denotes a large portion of the fees as a software license
shipping the license keys even if they will not be used ... invoicing the customer for a big chunk of money up front (much to the surprise of this customer, Briody contends)

If this is the case, there's no fraud here. They're not taking one type of deal (payments over time) and CLAIMING for accounting purposes it as if it was a different type (single up-front payment.). They're actually MAKING a different type of deal - replacing payments over time with a large up-front payment.

Whether this is good customer service (or even breech of contract on the original deal) might be in question. But accounting fraud seems like a stretch - they booked the deal as a "big upfront payment" because the deal WAS a "big upfront payment" after they restructured it.

There's a whole separate animal that neither the e-mails nor TFA really speaks to - if they "double booked" the deal as "new revenue" by re-doing the deal. That might well be fraudulent. But the e-mail doesn't seem to indicate that, and TFA merely puts it as a side note.

Re:No, they're not right. (0)

Anonymous Coward | about a year and a half ago | (#42490063)

I would disagree. If you signed a contract for $120,000 made up of 12 x $10,000 payments, that is still a $120,000 contract. Yes, I work for a business, and yes, we do both up-front and monthly contracts, and this is EXACTLY how it is looked at by our accountants.

Re:No, they're not right. (0)

Anonymous Coward | about a year and a half ago | (#42490195)

Yes, its a $120,000 contract, worth $10,000 this month. The rest is deferred. If your accountant is not making the distinction, they are a criminal, cooking your books. And just so. For all sane people, there is a difference between $10,000 cash in hand and $120,000 cash in hand.

Re:No, they're not right. (1)

swalve (1980968) | about a year and a half ago | (#42490393)

It's accrual accounting versus cash accounting.

Re:No, they're not right. (0)

Anonymous Coward | about a year and a half ago | (#42490923)

Cash accounting has no place in any business more complicated than a 10-year-old's lemonade lawnfront stand.

Re:No, they're not right. (0)

Anonymous Coward | about a year and a half ago | (#42493311)

Then your business needs new accountants, because what they're doing is negligent at best, and likely criminal. Cash and revenue have nothing to do with each other. Revenue is about what's earned, not what the bank balance looks like.

Re:No, they're not right. (1)

Waffle Iron (339739) | about a year and a half ago | (#42490537)

Booking as the wrong kind of deal WOULD potentially be an underhanded way of recognizing revenue improperly - claiming "We got $120,000 today" when in fact what you really got was an agreement to receive $10,000 a month for 12 months.

Well, state lotteries always seem to be able to get away with this scheme.

HP's Own Creative Accounting (1)

theodp (442580) | about a year and a half ago | (#42490271)

Take HP Loses in Tax Court to IRS [accountingtoday.com] and HP Grabs $14.5B Job Creation Tax Break As It Celebrates Layoffs [techdirt.com] , for instance. :-)

Re:HP's Own Creative Accounting (1)

Anonymous Coward | about a year and a half ago | (#42496083)

Wait a second, they just move 14.5 billion cash from their non-US into US operations. They get some tax breaks onto these 14.5 billions, I assume. But they do NOT get 14 billions as a subsidy.

And before you cry like a baby about 14 billions, think about their expenditures just for wages: 300k employees @ 50k is 15000k^2 dollars. That's 15 billion dollars in wages every fucking single year. Now, these 50k are a guesstimate; look up their annual report and the figure will be slightly different. Not in a different ballpark, though.

The truth is that many people had a really nice life from these supercorpos for a long time. Now it ends for some idiotic reasons. Other people never had that nice life. So these people should stop whining and move on. And if you still whine, just try to run your own business and just make 100 dollars of revenue per month. I tell you it is much harder than playing the slave for a super-corpo.

Pre-Buy Depth Sampling (1)

Tablizer (95088) | about a year and a half ago | (#42490319)

If you are under a time pressure, then generally you'll randomly select some specimens from the summary list of income sources (contracts) and send auditors to inspect those specimens in detail. That way you are likely to catch a "bad batch". It's not perfect, but a pretty good way if you can't check them all thoroughly.

I suspect HP only did summary auditing.

The banks should have done depth sampling with their bundled mortgages and perhaps saved the world from a global recession.

Re:Pre-Buy Depth Sampling (0)

Anonymous Coward | about a year and a half ago | (#42496165)

HP suffers from the "agent" problem. All the "decisionmakers" (the agents) actually fuck with other people's property. That of anonymous, voiceless, powerless shareholders. It's like going to Las Vegas with other people's money.

Other companies have one or a single family if strong shareholders. People who care and intervene on a regular basis. Think of BMW/Quandt, VW/Piech+Porsche. They usually do much better than the anonymous-owned corpos. Compare that to Daimler, who also suffers the agent problem and they are almost on a regular basis subjected to weird management "strategies". The result is that BMW and VW/Audi are eating Daimler/Mercedes marketshare slowly, but steadily.

The HP family actually put up some minor resistance against Fiorina, but they had not the determination to boot her out. I guess they feared that they would then have to do some real work in first running the company themselves and going through the search process again. If you never had to do real work, it is "tough" just to look after your property then and now ! (Yes, I know the HP families don't have the majority of shares, but they certainly could wield effective control if they had been more aggressive)

SOP (1)

ElitistWhiner (79961) | about a year and a half ago | (#42491067)

Booking top line revenue at the time they get wet sigs is standard operating procedure for I don't know how long...30+ yrs.

Business Details on Slashdot (0)

Anonymous Coward | about a year and a half ago | (#42491677)

I like this story - some people want more StarTrek then read StarTrek stories, some people want to know how the IT tech business side is working or not-working, then read this one.. seems good to me. Why are money numbers no good when physics numbers are good ? both intersect the sector...

Re:Business Details on Slashdot (0)

Anonymous Coward | about a year and a half ago | (#42496267)

They business stuff is about people, and as you know we are all autistic, aspergeric, anti-social people here. At least, that is the stereotype.

More seriously, I do think some percentage of stories about business is absolutely OK. After all, we technology experts expect to get a nice paycheck every month, so that we can walk to other people and get some product/service from them as an exchange for the "secure paper". If we were wholly clueless about money and business, we would be even more shafted than what we are already.

But hell, yeah, the business world is full of irrationality, sleaze, corruption, inconsistencies, codewords and stupid rules. If you really want to make a rational model about it, you will become insane.

Still not up to CA's game (0)

Anonymous Coward | about a year and a half ago | (#42494413)

Obviously they were trying to imitate CA and failed

CA and HP in Same Direction (1)

tmjva (226065) | about a year and a half ago | (#42498215)

When I saw "CA" in the text, I knew there must be some shenanigans.

Isn't this the same kind of stuff that got Sanjay Kumar of CA in prison?

Well they can't blame this one on him. He may soon have some new cellmates to talk old times.

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