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HP Businesses Software Technology

Is HP Right? Autonomy Salesperson Shares Internal Emails 92

Posted by Soulskill
from the fingers-in-the-cookie-jar dept.
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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Is HP Right? Autonomy Salesperson Shares Internal Emails

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  • by Anonymous Coward on Saturday January 05, 2013 @02:44PM (#42489019)

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

    • by Anonymous Coward

      Are there suits that cost less than $1000?

    • by phantomfive (622387) on Saturday January 05, 2013 @04:31PM (#42489709) Journal

      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.

      • by kenh (9056)

        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?

        • 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......
    • by ziggit (811520)

      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.

  • by Anonymous Coward

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

    • by Smallpond (221300)

      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.

  • by war4peace (1628283) on Saturday January 05, 2013 @02:50PM (#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.

    • by Rockoon (1252108) on Saturday January 05, 2013 @02:53PM (#42489089)
      Real nerds dont restrict themselves to computers, gadgetry, coding, and scifi.

      ..and how dare you leave out physics/chemistry.
    • by jonbryce (703250) on Saturday January 05, 2013 @02:56PM (#42489107) Homepage

      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.

      • by Anonymous Coward

        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 discover

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

      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 diffe

  • 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.

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

  • 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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