* Autonomy software structures messy world of information
* Group rode wave of information explosion
* Client list includes government, major companies
* 18th century scholar focused on probability of potential outcomes
By Chris Wickham
LONDON, Nov 21 (Reuters) - Autonomy, a British software group at the heart of an accounting storm with owner Hewlett-Packard, applies theory from the 18th century to extract meaning and value from a modern world swamped with unstructured information and data.
Its founder Michael Lynch, 47, and a former student of mathematical computing at Cambridge University, developed a system to impose order on information from the chaotic avalanches of emails, audio, video and social media.
The software provided by Autonomy, which lists clients ranging from the U.S. Department of Homeland Security and NASA to Boeing and the BBC, aims to deliver strategic, commercial and security advantage to its customers.
"About 90 percent of all data is unstructured," Alan Woodward, a visiting professor of computing at the University of Surrey, told Reuters. "Autonomy was one of the first companies to come up with a way to search that unstructured data in an intelligent way."
Other big groups, including IBM, Microsoft and Oracle, have interests in search and information management systems but analysts say Autonomy was ahead in applying these techniques to the messy universe of unstructured information across a wide range of formats.
Autonomy applications range from a system that suggests answers to call centre operators to one that monitors television channels for national intelligence agencies.
"The characteristic that makes human information unstructured is its form - it does not fit neatly into the rows and columns of a database, but exists in various formats including books, email messages, surveillance video, chat streams, and phone calls that occur across networks, the web, the cloud, and numerous mobile devices," Autonomy says on its website.
"Growing at a rate three times that of structured data, the increasing deluge of unstructured information makes up approximately 90 percent of all information. The challenge for the modern enterprise is to understand and extract value from this rich sea of human information," it says.
Woodward said Autonomy's modern roots go back to work done on relational databases in the 1960s that made information quicker and easier to search.
"The point is that in the nineties they cottoned on to a crest of a wave," said Woodward. "The amount of information that has been created in the last 20 years is more than has been created in the whole history of mankind."
Lynch, who has been referred to as Britain's Bill Gates, managed to commercialise statistical techniques that go back to the 18th century when the Reverend Thomas Bayes studied how to estimate the probability of potential outcomes.
Bayes' efforts centered on calculating the probabilistic relationships between multiple variables and determining the extent to which these relationships are affected when new information is obtained.
Autonomy developed the relatively simple techniques behind keyword searches, like those done using Google, and applied them in more complex areas like scene detection in video.
Its 65,000 customers worldwide span government, education, energy, law, investigation, healthcare and retail.
If a user is looking for video about rockets, for instance, the system will look for other material linked to rockets, like warheads, and offer it up ranked according to relevance.
As well as responding to queries, the system can send out alerts when it spots a pattern and it can learn to refine its monitoring from the history of tasks it has been given.
Hewlett-Packard Co has levelled a charge of dodgy accounting at Autonomy and is taking an $8.8 billion charge. HP said on Tuesday it had discovered "serious accounting improprieties" and "a wilful effort by Autonomy to mislead shareholders" after a whistleblower came forward.
It alerted regulators on both sides of the Atlantic.
Lynch, who led the firm he had co-founded when it was sold to HP last year for $11.1 billion, has denied wrongdoing and blamed mismanagement by its new owners for shredding its value.
Whether HP paid too much for the British company, or whether its value was improperly inflated, it is entirely possible that any investigation into HP's allegations might well make use of Autonomy's own products.