News in View: Analysts remain divided on Autonomy

Analysts have criticised the long-term prospects of UK software firm Autonomy despite its strong performance on the Nasdaq stock exchange, and a high level contract with General Motors.

Four-year-old Autonomy is now worth almost $8bn, making Mike Lynch, CEO, the UK's first dot-com billionaire. However, analysts claim the firm, which makes artificial intelligence knowledge management software, still has to prove it's carved a niche for itself in the market.

Clive Longbottom, strategy analyst at Strategy Partners, said: "The world is going to be very dynamic in this area - there are a lot of small vendors in the US fighting for this space - it's far too early to point at any particular firms and identify winners and losers. Autonomy can go under, just as easily as it can be a success."

Alan Pelz-Sharpe, senior analyst at Ovum, agreed. He told silicon.com: "They [Autonomy] have made some headway, and they've got an opportunity to make even more headway, but realistically the information vendors like Excalibur, Verity and Hummingbird are going to fight them pretty tough. And you've got vendors such as SER in Germany, who do similar technology, so they've got a fight ahead of them."

But John Holden, research analyst at the Butler Group, was more positive. He said: "The uniqueness of their product, which is far ahead of anything else we've seen in the marketplace, will become so important in a situation where we're seeing unstructured corporate information doubling every three months."

Autonomy CEO Lynch maintains the company will be a success simply because businesses have so much information that needs to be categorised, prioritised and directed to relevant users.

He said: "By using Autonomy, that can all be done automatically, suddenly all the information becomes coherent, which is a very powerful tool for the business."

You can watch a News in View video analysis on Autonomy in the Knowledge Management Channel (http://www.silicon.com/a38138 )