The news that Cambridge technology leader Autonomy is to be bought by HP for £7 billion has led to plenty of soul-searching and editorialising about British tech know-how being (again) being subsumed into an international megacorporation.
Like many people I’m sad that Autonomy is no longer independent, but it was definitely coming. Autonomy had put itself in the shop window – for example through sports sponsorship of both Spurs and the Mercedes Grand Prix team (interesting that HP is a previous Tottenham shirt sponsor) and CEO Mike Lynch has had a robust/adversarial relationship with the city, characterised by complaints that the company share price didn’t reflect the real value of the business. And HP paying a premium of 64 per cent on yesterday’s closing price seems to bear out his stance.
But this isn’t the end for Autonomy or its impact on the Cambridge tech scene. While overseas operations may well be merged into local HP offices, it makes no sense to shut down R&D in Cambridge as HP doesn’t have any similar technologies within its software portfolio. Autonomy is at the centre of a Cambridge cluster of businesses based on intelligent search (in one form or another) and this can only continue and grow if, as promised, HP invests in its new acquisition.
Add to this that there is now a serious amount of potential investment floating around Cambridge in particular and the UK in general for new tech ventures and, over time, this can only significantly strengthen the UK software scene. So time to celebrate success and look to the future rather than indulge in hand-wringing about British assets falling into foreign hands.
- HP to buy Autonomy for $11 billion (ft.com)
Cambridge has got a worldwide reputation for the excellence of its tech cluster. The likes of ARM, Autonomy and CSR are global leaders and a plethora of other innovative tech businesses like Transversal, Adder, RealVNC and Red Gate Software have successfully developed within the city.
But the tech market doesn’t stand still, meaning there’s a constant need for new startups to replenish the pipeline and potentially become the ARMs of the future. And creating a startup can look like a daunting prospect. You may have an idea, but where do you go from there? Tapping into the right skills and receiving help and encouragement is almost as critical as attracting funding when at a very early stage.
Help is at hand, through the first Cambridge Startup Weekend, which will be held between 11-13 March 2011. It adds to existing initiatives such as Cambridge Pitch and Mix to provide a focused event where people with ideas and skills can meet. Organised by volunteers, I’m very happy to be personally involved, both in publicising it and providing PR advice to the startup teams over the weekend.
An intensive 54 hour event, it focuses on building a web or mobile application which could form the basis of a credible business. At the end of the process, a high level judging panel, chaired by Neil Davidson, co-founder of Red Gate Software, will choose a winning project.
Based on a formula pioneered on the US West Coast, it is the first time a UK version of the event has been held outside London. And in another first, a proportion of the proceeds from the event will remain in Cambridge to be used as a legacy to support startups.
It promises to be an exhilarating (and exhausting) event and a great way of unleashing the next generation of great Cambridge ideas. Find out more at cambridge.startupweekend.org or follow the event on Twitter @swcambridge. Special offer tickets are available now, with prices at £50 when you enter discount code PRCAM.
Sport seems to bring out the worst in companies and how they spend their money. Organisations with otherwise well-thought out and laser targeted marketing plans suddenly decide to pour huge amounts of cash into sports sponsorship on what seems like a whim (or more cynically it’s the CEO’s favourite team).
Autonomy’s current sponsorship of Tottenham Hotspur is a prime example – I don’t think that many of the denizens of White Hart Lane are responsible for buying high end enterprise search solutions, but nevertheless the company has splashed £20 million on plastering its name across the front of Gareth Bale.
It got me thinking about other misguided sports sponsorships, and, while I’m sure there are plenty more, here’s my top 10:
1.Waitrose and Reading FC
Waitrose is pretty good at marketing to middle England – so why sponsor Reading football club when few of its target audience support it or are that bothered by Championship football? Waitrose HQ isn’t far away from Reading, but surely there’s a limit to what can be spent on employee motivation?
2.US Postal Service and Lance Armstrong
A brave move by the US equivalent of the Royal Mail to move away from its reputation for poor service and frequent office shootings (hence the phrase ‘going postal’). But sponsoring a cycling team that raced 99 per cent of the time outside its domestic market isn’t be that effective a way of reaching your target audience.
3. Durex and Surtees F1
The testosterone-filled Grand Prix scene and sex sounds like the perfect combination. Hence Durex’s sponsorship of the Surtees F1 team in the 1970s. Then the cars began to suffer from punctures – not the right message for a condom maker……..
4. Austrian football
Such is the parlous state of Austrian football finances that teams are forced to name themselves after sponsors, no matter how silly they might be. Glatter’s Quality Turkeys versus FC Concept Schnitzlplatz anyone?
5.Hafnia and Everton FC
Mel Smith and Griff Rhys Jones spoke for the nation ahead of the 1984 FA Cup final when they asked who (or what?) was a Hafnia, then sponsors of Everton FC. Extensive research reveals Hafnia to be a Danish canned meat company, but even Wikipedia isn’t quite certain. Given the Toffees featured Welsh man-mountain Neville Southall in goal, Hafnia’s products obviously had a big following in the dressing room.
6.Paris Hilton and MotoGP
Working on her normal subtle self-promotion socialite Paris Hilton is sponsoring a MotoGP team in 2011. Good for the team and sport, but can’t really see how it helps her brand – even if the bikes are a lurid shade of pink.
7.Cercle Brugge and the Roman Catholic Church
One that didn’t happen after the Belgian football club Cercle Brugge turned down sponsorship from a leading Roman Catholic newspaper, for fear of ridicule. If it had been 30 years ago, they could have put Pope John Paul II in goal…………
8. Norwich City and Lotus Cars
The Lotus factory is in Norfolk, but the rural county isn’t exactly bursting with potential sportscar buyers, making the company’s upmarket sponsorship of the Budgies a trifle optimistic. More realistic when they stuck parent company’s Proton’s brand on the shirts.
9. Millwall FC and Lewisham Council
It’s fair to say that Millwall FC (and its fans) has a certain reputation, and it isn’t for flower arranging. So if you were looking to raise the brand of your area and show it as go-ahead and welcoming they wouldn’t really be your first choice of channel. But the Lions’ local council sponsored the team on not one, but two occasions in the late 80s/early 90s – hardly the best use of its marketing budget?
Surely, if you are a finance company sponsoring a football team, the first thing you think you’d do is check out the club’s solvency? Not in the case of Intelligent Finance and Livingston FC – the club duly went into administration. And to add insult to injury the main creditor was Halifax Bank of Scotland, Intelligent Finance’s parent company.
I’m sure there are plenty of other misplaced sponsorships – feel free to add them through comments.
There’s good and bad news from the latest Deloitte UK technology Mergers & Acquisitions survey.
On the plus side respondents believe the market is looking up, with increased optimism and higher prices paid for tech businesses.
But on the downside confidence in going public in 2011 has crashed – with only 16 per cent seeing increased investor appetite for tech IPOs. And more worryingly given the government’s plans to use the tech sector to kick start the economy, the acquisition market is still being driven by overseas companies. 90 per cent of those surveyed believe that the US will remain the dominant buyer of UK tech businesses.
Why should this start ringing alarm bells? Not through any desire for protectionism of UK companies – tech is one of the most truly global markets and nowhere is that more obvious than in M&A. The issue is that the stall in IPOs combined with the acquisition of breakthrough UK tech businesses risks reducing the number of UK leaders we need to encourage other companies and sectors. Large, quoted companies create their own ecosystem, building up a network of suppliers, spin-outs and related businesses that mutually interconnect. For example, look at the cluster of neural network/data mining companies around Cambridge. Headed by Autonomy, companies as diverse as Linguamatics, Transversal and True Knowledge all use broadly similar technology to solve completely different sets of business problems. They benefit from access to staff and suppliers that understand the market – take out the kingpin and it gets more fragmented, and consequently companies and people drift away.
So we need a way of encouraging IPOs that attract investors for the medium to long-term – perhaps that would be a better use for government cash than propping up the banks or the Irish economy?
- Deloitte: UK Tech Firms Don’t Think 2011 Is The Year To Go Public (paidcontent.org)
- Brain drain fears as cash-rich US firms eye UK tech rivals (telegraph.co.uk)
- Tech Mergers and Acquisitions Coming Back (time.com)