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An Introduction to Autonomy
Founded in 1996 with a unique combination of technologies borne out of research at Cambridge University, Autonomy has experienced a meteoric rise. Today Autonomy is the market leader in the field of Meaning Based Computing. Our Intelligent Data Operating Layer (IDOL) platform allows computers to understand the meaning of all enterprise information and process it automatically.
Our customers benefit from reduced operating costs and increased top line revenue growth. Autonomy's position as the market leader is widely recognized by leading industry analysts including Gartner, Forrester Research, IDC and Ovum.
Autonomy's Vision
Think back to the late 1960s when computers first started to be used for business. At that time computers were far too basic to understand the rich forms of information that human beings exchange every day. So the solution was to take human friendly information and distil it into a much simpler form - the rows and columns of a database. So if a person lives at "3 Acacia Avenue" that information is entered into the particular row and column of the database that is for the first line of the address. The information is structured so that its position tells the computer what it means. So the computer could then identify, for example, that column three, row four was the amount of inventory in the warehouse, and when that number went close to zero it could automatically issue a purchase order to replenish the warehouse. It had automated a business process, and replaced a human being who would have had to do the job manually.
This was the birth of the modern IT industry. Today, behind every piece of enterprise software there is a database. It might be software to administer a hospital or a CRM system - all have a database at their core, and then usually a tailored interface to make different operations possible depending on the use case.
But what if computers could actually understand information in its rich, unstructured form, and automatically do useful things with it?
Autonomy's vision is to enable computers to be able to process human friendly, unstructured information such as emails, voice messages and videos, based on its meaning. So the computer can watch emails being sent within a bank and identify those that mean there is a compliance problem. Or listen to calls in the contact centre and identify a number of calls all about the same product issue, perhaps an exploding battery, and alert a supervisor. Autonomy does for unstructured information, what the database is capable of doing for structured information.
The fundamental idea is simple: computers should map to our human world and solve our problems, rather than the other way around. This is the biggest change in the IT industry to date, because it is the first real change to the "I" - the information, unlike the many recent changes to the "T" - the technology, such as the shift to the client server model, or cloud computing. As a result, Autonomy's technology is applicable to every area of IT, and is consistently rated the leader across analyst reports in many areas of software from enterprise search to eDiscovery, and through our OEMs even in areas where Autonomy does not itself compete, such as content leak prevention.
We call this phenomenon: Meaning Based Computing (MBC).
Meaning Based Computing (MBC)
When computers "understand" information, they can start to process it automatically and begin to bring information to the user rather than the other way round. For example, by forming an understanding, computers can automatically create taxonomies, alert users to new and relevant information in real-time or automatically profile an individual's interests based on what they read and write, offering them interesting information without the need to search, or introductions to helpful experts and similar people. Autonomy's technology is able to cluster information, identifying inherent themes or clusters of conceptually similar information. In addition, using this approach it is possible to detect irregularities in everyday scenes for security purposes, identify well-known speakers in broadcast media and analyze conversations to detect positive or negative sentiment. The possibilities are virtually limitless.
MBC addresses the full range of information challenges and consequently forms the central requirement of major enterprise deployments all over the world. Industry Analysts estimate that only around 20% of enterprise information is of the structured type that is held in a database. The remaining 80% is in human friendly forms such as email, telephone conversations and video, which cannot easily be put into a database. If you reflect on your working day, and consider the number of times you interact with structured data, such as a list of customers, or sales data, and the number of times you send an email or pick up the phone, you will find this to be right intuitively.
Customers
An extensive range of blue chip customers and public sector agencies from around the world use Autonomy's horizontal technology.
Research & Development
Autonomy owns 100% of the technology we offer, and hence eliminates the uncertainty of sourcing and integrating solutions from multiple vendors in a consolidated market space. No matter what changes take place in the broader market, Autonomy customers will never be left with unsupported technology or software licenses that become non-renewable. As the largest department in the group, the R&D team continues to represent the lifeblood of the company. Unlike other software companies that use development resources to do bespoke customization of their products, Autonomy sells a broadly applicable, horizontal product, and consequently R&D costs do not need to grow as a percentage of revenues.
Autonomy's Technology
A Different Approach
In Autonomy's fifteen year history our fundamental aim has not changed: computers should map to our human world and solve our problems, rather than the other way around. Autonomy has developed a fundamental piece of technology that allows computers to understand the meaning of unstructured information and process it automatically. That technology is the Intelligent Data Operating Layer (IDOL).
IDOL is the equivalent of the database for unstructured information. It sits behind every enterprise application and allows human friendly information to be processed.
Fundamental Technology: 170 Patents
- 500 functions on a single platform
- Unrivalled portfolio of 400 connectors to collect information from enterprise systems
- Unhindered performance at multi-petabyte scale
- Only vendor to offer mapped security and legally warranted results
- Largest number of standardization customers in the industry
- Language independent with customers live in over 116 world languages
IDOL is built upon the seminal mathematical works of Thomas Bayes and Claude Shannon. But how does it work in simple terms?
Imagine we took today's edition of the Wall Street Journal and cut out each of the words, which we pile up in a heap on the desk. We then ask somebody wearing a blindfold to pick up the words and stick them onto a sheet of paper. The result would be a meaningless jumble of words. It is a truly random process. This tells us that the arrangement of words in the newspaper is not random, it is biased. The "idea" in the mind of the author is what biases the words and their pattern. The word "dog" is more likely to be followed by the word "walk" than by the word "fly", for example, because dogs walk they do not fly. So by studying the preponderance of one pattern over another, Autonomy's technology understands that there is X% probability that the content in question deals with a specific concept.
It also turns out that ideas that are less expected within the context of a communication tend to be more indicative of its meaning. So the word "walk" which appears several times in a news article about a man walking his dog conveys far less meaning than the word "murder", which appears just once in the same article. It is this theory that enables Autonomy's software to determine the most important (or informative) concepts within a document.
 Bayesian Inference
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 Shannon's Information Theory
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Compelling Return on Investment (ROI)
By automating processes that relied previously on costly and tedious manual labour, Autonomy's technology generates substantial top line growth and bottom line savings. Rather than simply surfacing information for a user to process manually, Autonomy actually performs operations in real-time. As a result, many tasks that were prohibitively expensive become economically viable. For example, for a team of people to identify questionable comments in a 20 minute phone conversation that took place about six months ago we might have to sift through a thousand hours of audio. IDOL can do this in moments, but more importantly, can be applied proactively to notify the team at the time of the infraction. The value is in reducing the volume of manual labour, protecting the enterprise from unforeseen risk and generating growth by unearthing revenue opportunities. BAE Systems realized cost savings of an estimated £7 million in the first year of deployment when IDOL spotted two teams working on the same problem at different facilities. They were able to repurpose an entire team as a result.
Legally Warranted Results
Due to the increasing regulatory burden on the enterprise, and specifically in order to comply with the Federal Rules of Civil Procedure (FRCP), it is essential that the company can find and understand every document, including any metadata, without altering it in any way. In order to scale without impeding performance, if at the beginning of the process a particular result appears to be irrelevant, legacy products will stop indexing without taking into consideration the rest of the document. Consequently, a relevant snippet of information on the last page of a hundred-page report could be overlooked and the legal consequences could be catastrophic. IDOL is the only technology able to index every document in its entirety, and still provide millisecond response times.
Autonomy's Products
In Autonomy's fifteen year history our fundamental aim has not changed: computers should map to our human world and solve our problems, rather than the other way around. Autonomy has developed a fundamental piece of technology that allows computers to understand the meaning of unstructured information and process it automatically. That technology is the Intelligent Data Operating Layer (IDOL).
The proliferation of unstructured information is occurring in every industry from manufacturing to financial services, and so the IDOL platform is a truly horizontal technology that is used across every vertical. And we use different "virtual brands" to accelerate the adoption of IDOL in these different vertical markets:
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IDOL branded to automate the retrieval, processing, and management of global enterprise information. |
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IDOL branded for information governance, archiving, policy management and eDiscovery applications, and the only provider to cover all these stages on a single platform. |
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IDOL branded for Business Process Management (BPM). Solutions that embed "self-understanding" into documents to increase process efficiency and ensure compliance. |
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IDOL branded for Customer Interaction solutions that automatically capture and process all customer interactions to automate interaction and provide immediate intelligence on industry trends and customer behaviour. |
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IDOL branded for Rich Media Management in broadcast production, archive management, Internet TV and IPTV applications. Security and Surveillance solutions that facilitate superior real-time surveillance, detection and protection operations in all security environments. |
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IDOL branded for Meaning Based Marketing (MBM) offering the most comprehensive suite of intelligent solutions for targeting and engagement, online marketing optimization, web content management all on a common platform. |
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Business Model
Indirect
Autonomy has over 400 Value Added Resellers (VARs) such as Accenture, IBM Global Services, Cap Gemini, HP and Wipro. Around 80% of Autonomy's licence revenues come from this channel. Autonomy has an elite team of partner managers who attend occasional client meetings and ensure that customers receive the appropriate level of service, but these partners offer domain specific expertise and a global presence which allows Autonomy to run an incredibly efficient sales operation.
OEMs
Autonomy has over 400 Original Equipment Manufacturer (OEM) relationships with other major software vendors that build our technology into their products. These OEMs span every software sector from CRM to Product Lifecycle Management software. An OEM pays an upfront fee and then writes its new product which can take up to two years depending on its product roadmap and release cycle. Once the product is launched they pay a royalty stream of around 3 percent of product sales to Autonomy. This we would expect to expand overtime as OEM partners embed more IDOL functionality in subsequent product releases.
Licence
Customers who purchase a licence for Autonomy's software initially pay an Average Selling Price (ASP) of around $400,000. A typical initial contract will likely include four of Autonomy's 500 functions and around four connectors. The pricing model is based on three drivers of value: the number of users, the number of functions / connectors, and the amount of information being processed - any two will be prevalent in a particular use case. For example, in intelligence processing type applications it will be the amount of data rather than number of users that is the dominant factor, but in a corporate environment for a knowledge portal it may well be the large number of users that determines the pricing. In addition to the upfront licence payment these customers also pay around 15 percent support and maintenance, which is due annually.
SaaS and Hosted
Autonomy also operates Software-as-a-Service (SaaS) and hosted models, where the solution is run on hardware owned by Autonomy in one of our data centres. In fact, Autonomy runs the largest managed archive in the world at over 12 Petabytes of data.
Appliance
Currently a small part of the business focused on quick time-to-value and high return. Where customers have an urgent need to deploy IDOL, either for regulatory or commercial imperatives, we are able to provide a pre-installed licence on appropriate hardware to start generating an immediate return. The value of these solutions is attributable almost entirely to the functions offered by the licence, so although there are some hardware costs involved, the margin profile is not widely dissimilar to our traditional licence business.
Financial Model
Autonomy is one of the very rare examples of a pure software model. Many software companies have a large percentage of revenues that stems from professional services, because they have to do a lot of customisation work on the product for every single implementation. In contrast, Autonomy ships a standard product that requires very little tailoring, with the necessary implementation work carried out by approved partners such as IBM Global Services, Accenture and others. This means that after the cost base has been covered, for every extra dollar of revenue that comes in, you simply take off nine cents to get to the gross margin and then a further ten cents which is paid in commissions to our partner managers. That leaves approximately 80 cents which falls straight through to the bottom line. What this offers is a business model with a proven record of strong operating leverage and that is expected to continue to deliver industry leading operating margins and revenue to cash conversion.
Contact Autonomy Investor Relations
For recent financial information or to request literature, please send an email to the address below or alternatively write or call the following:
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