Profile: Autonomy

Hewlett Packard's allegations that Autonomy inflated its value prior to a takeover has been flatly rejected by the former management of the UK software firm.

But what is Autonomy, and what led HP to pay $12bn (£8bn) for the company last year?

Despite a sponsorship deal with Premier League football club Tottenham Hotspur and once being a constituent of the FTSE 100 index of the largest companies listed in the UK, the firm has rarely hit the headlines.

Autonomy was founded in 1996, when it grew out of the specialist software research group Cambridge Neurodynamics.

It develops software that can extract useful information from "unstructured" sources such as phone-calls, emails or video.

That means its software can do things such as suggesting answers to a call-centre operator or monitoring television channels for words or subjects.

One of the strengths of its business is that in most of the areas in which it operates it has no competitors.

It gained a listing on the US Nasdaq exchange in May 2000 at the height of the technology boom and was listed in London six months later.

The company suffered when the technology bubble burst, dropping out of the FTSE 100 and having to issue a profit warning in 2001.

But, unlike many of the technology companies that had gone to market in the boom, Autonomy was actually profitable.

It grew rapidly, mainly through acquisitions, and opened joint head offices in Cambridge and San Francisco, and other offices worldwide, to serve its 65,000 customer companies.

These include some of the world's leading companies, such as BMW, Lloyds, Nestle, Philips and Shell, as well as US government departments and the UK's Parliament.

'Investor questions'

However, it has at times been unpopular with City analysts.

When it warned in October 2010 that there had been unexpected volatility in its customers' purchasing behaviour and lowered its full year forecasts, analysts piled in to criticise the company, with one of its former managers saying its management setup was more suited to a startup than a major global player.

Autonomy sponsors Tottenham Hotspur Football Club

The shares plummeted, despite there already being rumours that a bid could be imminent.

But while some in the City did not like the way it was run, the firm was often cited as a great example of how academic research could be turned into a profitable business.

The company was set up by Mike Lynch, a Cambridge University researcher who had specialised in pattern recognition and had developed a system for reading car number plates for Essex police before he founded Autonomy.

Mr Lynch left the company in May 2012. Reports suggested he was close to Leo Apotheker, the former HP boss who negotiated the Autonomy deal.

After Autonomy missed its targets for the second quarter of the year, Mr Lynch was replaced at the top by Bill Veghte, HP's chief strategy officer.

HP said that it was shortly after this that a senior member of Autonomy's management raised concerns about accounting issues.

Mr Lynch is a non-executive director of the BBC.