But in a short phone interview with AllThingsD, CEO Meg Whitman and CFO Cathie Lesjak reiterated what they said on a conference call with analysts: Progress has been made, but there’s still a lot of work to be done.

AllThingsD: Meg, let’s talk about the state of the competitive environment. We heard some pretty tough results from Dell last week, and you said on the call that HP was choosing to pass on some deals in order to protect profit margins. Tell me a little more about that.

Whitman: For the long term, profitability remains a focus for us because we can’t afford to let our profitability crater the way Dell did. We have to have the ability to invest in the next generation of PCs and servers and software. It was a tough quarter. We walked away from several deals and lost some share. But it felt like we did the right thing in going after the deals that were the right deals for us. There were also some execution issues. We have to make sure we have the right product for the right customers at the right price point. And particularly at the low end, I think we could do a better job there. But overall I’m reasonably pleased that we made the right decisions in the PC business.

Dell was also making a lot of noise about industry standard servers and how it took some share away from HP. Was it a similar dynamic in servers as it was in PCs?

Whitman: Yeah. We saw what happened to Dell’s earnings. They were down 75 percent. If they were a publicly held company that was trading freely in absence of a buyout number, the stock would be down by 50 percent. It would be ridiculous. We are a publicly held company and we have to invest in the long haul. So we had to choose to walk away from some deals in hyperscale and industry standard servers and PCs that didn’t make sense for the company. I feel like we did the right thing, but there’s always something you can learn from these things.

How do you feel about competing against a privately held Dell versus a publicly held Dell? We saw some indication of how it might behave in the marketplace this quarter. Do you think you’re going to have more of this aggressive pricing behavior and so on?

Whitman: I don’t know exactly how their behavior is going to change. But remember they’re loading a lot of debt onto the company. And remember how LBOs work. They key is to pay off the debt quickly so you can take the company public again and make a lot of money. We’ll see if they remain as aggressive as they have been. But frankly, this is just a competitive business. We have a lot of competition. We have shown that we can win over time whether it’s against Acer or other manufacturers that we beat out. So if it’s Dell or anyone else, we have to have continuous improvement. We have to invest in the right products. We have to streamline our go-to-market strategy, we have to constantly refine our supply chain and we have to be more agile. And that is just part of being in the business.

Lesjak: And we’ve shown that by being No. 1 in the market for industry standard servers for many, many years now, and we’ve been competing against Dell that entire time.

Cathie, there was a lot of talk on the call about reducing HP’s debt. Give me a look ahead as to what changes when that debt comes down to approaching zero, then what happens?

Lesjak: It frees us up to step back and look at what we want to do with the cash we’re generating, and we want to make sure we’re making the right kind of investments. Those investments may be in buying back shares, or capital expenditures, or research and development to get us on track for the future, or to make small M&A deals. And we want to evaluate these all on a returns basis, both in the near term and in the long term. Because you really need to do both. Some decisions will be based on the near term and with some we’ll be willing to wait a long time for the returns because they’ll be worth it. This is actually one of those moments when we’re going through a lot of product transitions, where the new style of IT products are coming in and the older style products are going away. And what we really want to be able to do, instead of having to manage big transitions, we want to get through them more quickly and that means that you have to invest for the short term and long term.

Whitman: I’ve been saying this a lot lately: You have to plant acorns before you have oak trees. And I think with a lot of the CEO transitions, we didn’t plant enough acorns. And now we’re paying that price.

So part of the impression I got from this quarter and last is that you’re able to beat the Street expectations in part because you’re able to manage your cash flow very tactically. You did well with cash flow for the first half of the year and you said on the call that you don’t expect it to remain as strong in the second half. With the macro environment remaining so weak, I come away thinking that your success is really less about products and lines of business and right now more about managing and taking out costs. Is that fair?

Lesjak: I’d sum it all up to operational excellence. You have to do this all the time. I mean we’re in a competitive industry. Margins are tight and you have to be maniacally focused on managing your costs every minute, and making sure you’ve got the right product in the right place at the right time. I think this has to be part of the DNA of the company. There’s no moment when you exhale and then you get to spend more. This is about being focused all the time and bringing that discipline to the company. Now in the second half we have some extraordinary cash payments to make around taxes and restructuring payments. As well as some cap-ex that we think will be good investments for the future.

Is there any indication that the macro environment is going to improve? We’re seeing the worst environment for PCs pretty much ever, and IT spending generally isn’t looking so good. Do you sense any improvement in either?

Whitman: From a macroeconomic perspective, which is what drives IT spending across small businesses, medium ones and big enterprises, I think the environment remains about the same. I could be wrong here. We don’t see any improvement coming in Europe and we don’t see an improvement in the U.S. So we’re not counting on those as tailwinds or headwinds, but really more of the same. PCs are a little different. PCs are a subset of personal systems, and as you know that business is growing generally with all the tablets and mobile devices. Its possible the PC growth rate doesn’t decline as much. It may continue or it may flatten. The objective is that when it starts to flatten out, whose the company with the best products and the company best-positioned to gain share. We want it to be us.

Lesjak: Taking advantage of the fact that tablets are a growing segment, you really look at HP’s position in tablets, and that will improve significantly in the second half of this year. We’ve got the Slate 7 Android consumer tablet and the Elitepad commercial tablet. Those ramp in the second half, so we’ll have some help on the top line. Not so much in the PC business but personal systems.

Project Moonshot launched during the quarter and there’s a sense that there’s a lot of hope riding on that product. When does it start shipping in earnest for revenue? Is that a 2014 story?

Lesjak: It really ramps in the second half of this year but it’s more of a 2014 story. The real material benefit is 2014 and 2015. IDC has done some projections that the Web and cloud services business will grow about 19 percent in 2016. So that works out to about 8-10 million servers between now and then. So that’s the market that Moonshot is going after.

Whitman: You also have to remember that the ramp is slower with these enterprise products than with the consumer products. Big enterprises need to bring them in and do a proof of concept and see what workloads they want to run on them. And then they have to prove it out. Enterprises move more slowly, but when they move, they move big. But the ramp is slower than the the consumer product.

What’s your biggest priority for the rest of the year now, Meg?

Whitman: We continue with our restructuring program. We said it was going to be a three-year program, and we’re about halfway through that timeline. So there’s more work to do there. And to Cathie’s point, it becomes part of the DNA. This is what we do in the normal course of business. We also have to manage the transition between the new products and the older products. We’d like to accelerate the growth of the new products if we can.

And you said on the call, despite all these market headwinds, you think you can grow next year.

Whitman: We do. We continue to believe that growth is possible next year. You’ve got to remember, we’re doing this amid some of the biggest transitions that have hit the IT industry in a generation. The macro environment is not going to help. The delayed runoff in enterprise services helps this year but hurts next year. But we think we can grow. It depends on a lot of different factors. To be clear, we expect EPS growth in 2014 regardless.

What’s your latest thinking on Autonomy? Is that part of the operation where it should be?

Whitman: I think Robert Youngjohns and his team have done a great job of stabilizing Autonomy. We’ve put in some systems that were lacking and we’ve changed our go-to-market. We’ve invested in R&D jobs there. We had 50 openings for research jobs there recently and I suspect that most of them have been filled by now. So I’m pleased with the progress. That team went through a lot, so I have to give them a shout-out. They had some difficult circumstances. And I’m pleased with what they’re doing. I think you’re going to see Autonomy grow in the next few quarters.

You still having fun Meg?

It is fun. The senior team feels like they’re making a difference. The turnaround is on schedule. Obviously there are lessons learned every quarter, but we feel good about where we are.

In a tense two-hour hearing, parliament’s Public Affairs Committee grilled Matt Brittin, Google’s head of sales and operations in northern and central Europe, about whether the firm completes sales of its products and services in the U.K., making it liable to pay more tax in Britain.

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But the only thing any of the assembled journalists she’s had contact with have wanted to discuss is Autonomy, the British software firm that HP acquired in 2011 and on which it blamed the majority of an $8.8 billion write-down.

The magnitude of the accounting improprieties, Whitman said in interviews with The Guardian and The Telegraph, were such that HP had to report its findings to regulators on both sides on the Atlantic. She also ruled out any notion that HP is interested in selling off Autonomy — such rumors are apparently still in the air in the U.K. — calling it “critical to our strategy.”

Here’s Whitman in an interview she did with the BBC, which starts with her being asked whether it was “wise” for HP to attack Lynch and the rest of Autonomy’s former management team.

The U.K.’s Financial Reporting Council announced the investigation today in a statement on its website. This would make it the second regulatory body in the U.K. — the first is the Serious Fraud Office — to begin investigating the company. Correction: Actually not true. While HP has reported its findings to the UK’s Serious Fraud Office, that agency has never confirmed an investigation. The U.S. Department of Justice is also said to be investigating Autonomy’s books. HP alleged last year that Autonomy had used accounting tricks to inflate its value.

HP paid north of $11 billion for the company in 2011, then turned around and wrote down about $5 billion of its value as part of a larger $8.8 billion write-down announced in the fall. It was the second of two significant write-downs at HP during 2012, the first being the $8.9 billion write-down for the IT services firm EDS, acquired in 2008.

The council said it will investigate Autonomy’s accounting statements for the period between Jan. 1, 2009, and June 30, 2011. HP announced the deal to acquire Autonomy on Aug. 18 of that year.

The regulator is responsible for, in its words, “promoting high quality corporate governance and reporting to foster investment,” and also sets corporate governance and accounting standards in the U.K.

That newspaper reported today, in a thinly sourced story, that as many as 200 people were due to lose their jobs at the British software subsidiary in a shake-up expected soon.

Sources familiar with the company’s plans tell AllThingsD that the number of jobs expected to be cut is actually fewer than 70; the cuts will focus on sales personnel, all of whom were originally hired prior to HP’s acquisition of the company. Additionally, the job cuts were put in motion in September, well before HP made public its intention to write down the value of Autonomy by about $5 billion. Layoffs in European countries, like those in the U.K., are more complicated to carry out, and so take months to complete.

In explaining the writedown, HP, which paid north of $11 billion for Autonomy in 2011, alleged that the British company’s executives essentially cooked the books in order to make Autonomy appear more valuable than it was. It has reported its findings to the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office.

Mike Lynch, the founder and former CEO of Autonomy, has rejected HP’s allegations, and accused it of mismanaging the company after the acquisition closed.

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As part of what is beginning to feel like a global takeover, the Huffington Post Media Group said it will be launching a Japanese-language version of the service in that country.

The AOL-owned content arm will be partnering with the well-known Japanese publisher, Asahi Shimbun, in what will be its first Asian effort. The Huffington Post currently has versions in the United Kingdom, Canada, France, Spain and Italy.

As in previous efforts across the globe, the site will include news, blogging, community, video and social tools. The Huffington Post Japan joint venture is currently looking for an editor in chief, and is still formulating how the arrangement will work.

The partnership with Asahi is key, said Jimmy Maymann, CEO of the Huffington Post Media Group, in an interview yesterday.

“One of the things is that the Japanese market is one of the largest newspaper markets, and they are still doing well,” he said. “So, big media companies have not had to think about the next iteration of new media, and that’s a huge opportunity for us.”

Right now, he said, the Huffington Post Japan’s main news competition would be Yahoo News from Yahoo Japan.

Arianna Huffington, president and editor in chief of the Huffington Post Media Group, noted that the site would be up soon, even as she looks for more markets. Next up: Latin America.

“International momentum and global presence is a big win for us,” she said. “It’s a great model for us to partner with great media companies, so we can move very fast.”

Asa Mathat / AllThingsD.com

You may recall a brief PR kerfuffle in which Oracle disclosed that it had been approached by investment banker Frank Quattrone, who was, as some people have it, shopping Autonomy around for a possible acquisition. Some people, including Quattrone and Autonomy’s founding CEO Mike Lynch, wouldn’t call it “shopping around” because it would have been illegal to “shop around” a U.K.-based company under that country’s securities laws without disclosing the fact to shareholders. But we’re getting ahead of ourselves here.

Remember, however, that in the wake of HP’s move to acquire Autonomy, Ellison said that at something north of $11 billion, HP had paid an “absurdly high” price, and cattily followed that by saying that Oracle had “taken a pass” on Autonomy.

Lynch, in an interview with The Wall Street Journal days later, said that no such overtures to Oracle had ever been made.

Oracle, just to set the record straight, mind you, with absolutely no other agenda in mind, fired back that Lynch apparently had a bad memory and had forgotten about a meeting, indeed a pair of meetings, involving Hurd, Lynch and Quattrone and some PowerPoint slides.

“Oh, you mean those slides,” Lynch said. No, he didn’t really say that, but he might have. Anyway, at that point, Lynch clarified that he had indeed accepted an offer to meet Hurd to talk about database technologies but he was “not there to sell anything.” Okay, then.

Again, just to clarify the record and nothing else, Oracle dug through its files and found the PowerPoint slides from at least two meetings that Lynch and Quattrone had held with Hurd. Quattrone owned up that the slides were his and that the idea had been to pitch Autonomy to Oracle independently of Lynch or Autonomy “as an idea.”

Autonomy had already been the subject of repeated rumors about a nonexistent bidding war for the company that had Oracle and Microsoft wrestling over it. And the meetings at Oracle took place in early 2011 after those rumors had been in the water a little while.

So yesterday’s disclosures by HP certainly put an exclamation mark on a back-and-forth between Oracle and Lynch that had simply quieted but not concluded.

Which brings us to those slides. What’s in them? Some interesting nuggets for sure, but there are no smoking guns concerning Autonomy’s alleged cooking of the books prior to HP’s announcement that it would acquire the software firm on Aug. 18, 2011.

On one slide we see Autonomy’s revenue mix as of early 2010. (Click to make bigger.) Note that the IDOL Product that makes up the blue slice of 29 percent of sales is the “hardware product” that in HP’s telling is the one sold either at a low margin or at a loss in some cases. Those allegedly improper bookings, HP says, amounted to 10 percent to 15 percent of Autonomy’s overall sales, and would otherwise be about half the size shown here.

In another slide we see Autonomy’s revenue and enterprise value as of January 24, 2011 — less than six months before HP’s acquisition — converted to U.S. dollars and compared against other notable software companies. Autonomy is valued at about $5.7 billion, or a little less than six times revenue. Six months later HP would pay nearly twice a much, which struck pretty much anyone paying attention as odd if only for the timing of the deal. Now HP says it paid about $5 billion too much for Autonomy and that amount lines up almost exactly with the increase in Autonomy’s valuation from this point. Coincidence? Maybe. But, interesting! (Click to see it bigger.)

And here we see a list of names of both Autonomy senior executives and members of its board of directors. As yet there’s no indication who it was from within the ranks of Autonomy who came forward to HP after Lynch’s dismissal from HP by CEO Meg Whitman, and so there’s no way to know if this person’s name appears here. Also, Autonomy’s former directors will almost certainly be contacted by both the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office. (Click to see it bigger.)

If you want to read those slides in their entirety yourself, here they are, via Scribd.

Autonomy Presentation 1 503341

Autonomy Presentation 2 503342

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• Mike Lynch Punches Back at Today’s HP Filing: Whither $5B Writedown?
• HP Confirms DOJ Is Investigating Alleged Fraud in Autonomy Deal
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One expression of that strategy — and a controversial one at that — was the nearly $12 billion acquisition of the British software firm Autonomy, announced 13 months ago. HP ultimately didn’t spin off its PC business, but its acquisition of Autonomy stuck. Now it is firmly part of HP’s software business.

As CEO Meg Whitman struggles to turn HP around, software is still a key part of her plans. While Whitman has made no secret of her opinion that Autonomy needs attention, there are some solid bits of HP’s software business — like Vertica and ArcSight — that are showing significant promise, if only they could grow.

Finding a way to get them growing is the job of George Kadifa. In June, HP named him as executive vice president, head of the company’s software business and a member of its executive council. Kadifa knows a bit about the software business. He spent seven years as a senior vice president at Oracle, and then ran his own company, Corio, for six years, until it was acquired by IBM for $182 million in 2005. From there, he went to investment firm Silver Lake, where, as partner, he pushed portfolio companies to improve their operations.

Kadifa sat down with AllThingsD last week at the software unit’s new headquarters in Sunnyvale, Calif., for his first interview since joining HP. We talked about how he plans to fix its weaknesses, improve its strengths and make software a more sizable piece of HP’s overall business.

AllThingsD: George, you joined HP to head up its software business unit in June. You’ve reached the 100-day mark, so give us your assessment of where you see things now and where they’re going.

Kadifa: A lot of good things are happening. We’re at about $4 billion in revenue, so if you look at HP Software as its own business, we’re about the fifth- or sixth-largest software business in the world. We have a great customer base; having worked at IBM and Oracle and now HP, customers really like us, versus previous experience. And we have a lot of products. A lot of them we acquired rather than built in-house.

Among the recent acquisitions, Vertica is one where the consensus seems to be that it was a pretty good deal. Where do you see Vertica going in particular, and what sets it apart?

One is the technology, which we think is second to none. When you think about it, the idea of taking data in columns and then arranging it in a row fashion, it seems like sort of a trivial difference. But it’s really unbelievable what it gives you in terms of capabilities. Say you’re storing a thousand names, you’ve got first names and last names. Let’s say five of those guys are named Arik. Normally you’d store five Ariks in a column. But here, instead of listing the name five times, you make a note above it with a five, so you know the name occurs five times. Now when you search through that list it’s so much more efficient, it’s two or three orders of magnitude faster, which means it’s 100 to 1,000 times faster than classic relationional technology. It has turned out to be a real diamond for us.

Yet it’s a small diamond. Yes, it’s growing, but how do you get it to grow fast enough that it becomes a more meaningful part of HP?

It’s a fair question. What we started with was a business with revenue in the low millions. It wasn’t in the $100 million range in revenue. It was really a project with some customers. We took it, and now it’s in the middle-double-digit millions. I can see us getting to $100 million with Vertica in a very short period of time. And there’s no reason it can’t be a billion-dollar business.

Let’s wrestle with the situation at Autonomy a little. You just named Robert Youngjohns to run it. Unlike Vertica, the consensus here is that Autonomy was an expensive deal that hasn’t come close to meeting expectations yet. What do you see happening there?

We just had a two-day planning meeting with everyone from Autonomy, where we went through the current status and looked at where we’re heading. The key for us right now is to get fiscal year 2013 on track, and that starts Nov. 1, so we’re working on that right now. Basically, when you look at Autonomy, the core unit is the IDOL Engine, which is the unique capability of meaning-based computing. We’re going to double down on that. In our labs in Cambridge, England, we have 40 or 50 mathematicians writing algorithms. And we’re going to build a team here in the U.S. to productize it and create a platform around it, because it has that potential. Frankly, the way Autonomy was managed previously, they put a lot more emphasis into enabling applications, which was fine, but our belief is that there’s a broad agenda, which is creating a platform around meaning-based computing. So we will maintain those apps, but at the same time we’ll open up the capabilities to a broader set of players outside HP.

It sounds like what Autonomy was doing was growing by acquisitions and then creating a more vertical stack of applications prior to HP’s ownership, rather than taking a broader, more horizontal approach. It sounds to me like HP wants to make Autonomy more horizontal. Is the potential there?

You’re correct. And, yes, the potential is there. I asked Autonomy that very question about why they went vertical instead of horizontal, and the answer that I got was that it came down to a difference of culture between the U.S. and Europe. In Europe, they tend to make things complex in order to create more value. For example, they saw the IDOL engine as too complex to just give it to people. Instead they thought they should acquire vendors and then create value by enabling applications. Here we take something that’s complex and we ask how we might simplify it in order to give it more scale for a bigger market. So, some of that difference was cultural, and some of it was that I think they fell in love with these acquisitions. … We think Autonomy’s technology has broader implications. And to reach that potential, we have to open it up as much as possible. And we’re also working with other organizations inside HP — PCs, printers, servers — to basically produce additional synergies.

Are the teams ready and primed? Meg Whitman, your CEO, and CFO Cathie Lesjak have made no secret that, so far, they have seen Autonomy’s ability to respond to deals that had been teed up by HP as lacking. Is the structure in place to address that problem?

It’s not in place yet, but the situation has settled down somewhat. The processes are working. The reason is that initially we kind of left Autonomy alone, and then we tossed a bunch of deals at Autonomy. The initial plan was to keep it intact, have the HP salesforce bring in deals, and everyone would be happy. One problem is that there were too many deals, and second is that the deals weren’t well-qualified. So what we did next was put in place a management process around sales cycles at Autonomy.

There’s been a lot of turnover there. Obviously, the former CEO, Mike Lynch, left, but so did a lot of the people who worked with him. Does that hurt the institutional memory at all?

No. Basically we lost the top half-dozen people. And you always expect that with an acquisition, especially with people who have grown up as entrepreneurs and will always be entrepreneurs. The remaining people running the products lines are still around, and so is the salesforce. The development guys in Cambridge and Chicago are still there.

Michael Dell has basically said he intends to keep growing his company by acquisition. Your boss, Meg, has said that we can expect no major acquisitions for the forseeable future — at least until the balance sheet is in better shape. If there were going to be acquisitions, even small ones, I would imagine they’d more likely be in software. Is that a fair statement?

I don’t want to say anything on Meg’s behalf. From a software point of view, if there are tuck-in acquisitions that can help us develop our technology, I’ll go and request to do it. The cash we generate from software would cover us. So that’s the thinking right now. We need to learn as a business how to grow organically because that’s where all the value is. At Silver Lake we did analysis on companies that grew by acquisition: Oracle, SAP, Microsoft, IBM, EMC and others. You find that their revenues grow and their profits grow. But what doesn’t grow, and what actually shrank from 2006 to 2011, is their multiples. Their valuations multiples shrank. What the market is saying is that just making acquisitions doesn’t add any value unless they create organic growth. That is how we look at it here. We’ve done a ton of acquisitions, so the task now is to create more organic growth because that is what the market will value.

Last week, the U.S. Department of Defense approved RIM’s BlackBerry 7 devices for agencywide use. And now the device has won similar approvals in the United Kingdom, Australia and New Zealand.

CESG, the National Technical Authority for Information Assurance in the U.K., on Thursday certified BlackBerry 7 as fit for government and law enforcement use. And the Defense Signals Directorate of the Australian Government did the same for Australia and New Zealand. The reason: Those industry-leading security features RIM is so fond of talking up. Consumers may not pay them much mind, but in government they clearly matter a great deal.

Which is great for RIM’s business, but not quite central to its long-term success. While government sales will certainly help keep RIM afloat, it’s the enterprise and consumer markets where the company really needs some wins. RIM insists that BlackBerry 10 will deliver them, but it won’t launch until later this year.

Six years ago this month, I revealed in Businessweek that Apple had incorporated in Nevada where the corporate tax rate is zero. So I found the Times’ account — written by Charles Duhigg and David Kocieniewski, about the many financial tricks that Apple employs to minimize its tax exposure — to contain a lot of old news, but also some new, fascinating details. Who couldn’t love a phrase like “Double Irish With a Dutch Sandwich” to describe arcane accounting and legal tricks?

But the implication the story leaves a reader with — that Apple is somehow doing society a disservice by not paying its fair share of corporate taxes — is simply wrong on many levels. The most dubious of the lines that the Times attempts to draw is between Apple and the budget crisis at De Anza College, a Cupertino community college where Apple co-founder Steve Wozniak was once a student. The college is facing a “death spiral” because of a decline in funding from the state. This funding, the reader is led to conclude, would be more plentiful if corporations like Apple were to step up and pay, and not escape the tax bill by setting up an office in neighboring Nevada.

What the Times fails to make clear is how community colleges are funded in California. The picture is much more complicated. California community colleges draw the majority of their funding from the state’s general fund — which is drawn directly from the state’s personal and corporate income taxes — and from local property taxes collected by counties. As of the 2009-2010 budget cycle, these two buckets made up about 88 percent of the system’s funding. State lottery funds, federal funds and student fees made up the remainder.

Tax policy wonks — which I’m not — will remember that California was the birthplace of the property tax revolt movement in the 1970s. In 1978, California voters overwhelmingly approved a measure that limits the amount by which property taxes can increase each year. Since then, at least one estimate pegs the amount that the state’s taxpayers have avoided paying at north of half a trillion dollars as of 2009. In February, the property tax shortfall facing the state community-college system was $41 million. Conclusion: If there is to be blame for the shortage of taxpayer funding at De Anza College, a healthy portion of it should be laid at the door of California’s own voters and taxpayers, who in 1978 thought that property-tax limitations were a good idea.

I had a few other problems with the story. Take sales taxes. When you buy a Mac in New York, you pay a sales tax of 8.875 percent. For a base-level iMac, priced at $1,199, that works out to more than $106 in taxes. While some states charge no sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — the average sales tax in the U.S. works out to 9.6 percent.

Putting aside the fact that the average sales tax in Canada is higher, let’s assume that Apple’s North American sales of $38.3 billion in its fiscal 2011 were taxed at that rate, and do the math: We get $3.7 billion in sales taxes paid into the coffers of states and municipalities, except in those five states that have no such tax. That amounts to more than 1.5 times the $2.4 billion the Times says Apple would have owed the federal government. Factor in VAT and other similar taxes in the U.K. and throughout Europe, and you get the idea that Apple is generating tax revenue aplenty on the sale of its goods. Yes, those taxes are passed on to customers. But isn’t that the case with every tax a corporation making consumer products pays?

Finally, you may remember that earlier this year Apple released an extensive report on the number of jobs it had created and supported both through direct employment and in the orbit of the products it creates. It seemed an odd thing for Apple to release at the time, and now we know why: It reads almost like it was prepared by Apple in advance, knowing this story was in the pipeline at the Times. The final number, by its reckoning: 514,000 U.S. jobs are created by the Apple universe, including 47,000 employees; 210,000 jobs were created as part of the app economy, which didn’t even exist until 2008.

Assuming that each of those jobs pays a salary north of $35,350 a year, taxes collected on that income could range anywhere from 25 percent to 35 percent, depending on the income bracket. And that’s before accounting for any stock-based compensation.

At this point, the discussion turns to a deeper question: Is it better for society to have a company pay more in taxes, or to create more jobs? You can argue that had Apple not taken advantage of the various strategies it employed to pay less taxes, it might not have flourished as well as it has, and thus created fewer jobs. But people smarter than I will likely hash out the finer points of this argument in the coming days.

(Image is a screen grab from this silly Beatles cartoon built around the group’s song “Taxman.”)

One of the things the company signaled it was going to do with that money was make acquisitions. Today it announced its first: OneDrum, a British start-up that specializes in making Microsoft Office a lot more collaborative.

Financial terms aren’t being disclosed, and OneDrum is a pretty early-stage company with 10 employees and combined $2 million in capital raised, mainly from angels and Amadeus Capital Partners, a British VC firm. But, the deal is invariably going to be compared to a similar one announced last year by Yammer rival Jive for OfficSync.

I talked to Yammer CEO David Sacks about the deal earlier today and I asked him about the comparison. He said that one thing OneDrum does that OfficSync does not is a level of desktop synchronization that’s comparable in some ways with what you find with something like DropBox. And, it does so without the need for a plugin that might, he argues, mess up how Office runs and which can be difficult to deploy across an enterprise.

Basically, Yammer customers will be able to share and see the contents of the folders they share with other people via Yammer. Also, people can collaborate on Office documents live. Changes are tracked within the Yammer news feed and revisions are stored. Once you drag a document into your Yammer folders, the contents are instantly text searchable from within Yammer.

What OneDrum lacked, Sacks told me, was “a good front end to express the OneDrum technology,” which Yammer will readily provide.

AllThingsD.com

Yet now that the attacks have subsided, it’s time to see them for what they are: Nothing more than a blunt instrument that accomplishes nothing constructive.

As of today, only one of the Web sites attacked by the hacker troupe Anonymous is still apparently affected, and that belongs to the Universal Music Group recording label. It currently displays only a message saying “The Site is under maintenance. Please expect it to be back shortly.” Others that had been attacked yesterday, including the sites of the U.S. Department of Justice, the Recording Industry Association of America and the Motion Picture Association of America all seemed to be operating normally.

Thursday’s attacks, which have been described as the biggest action yet organized by Anonymous, were launched in apparent revenge for the FBI’s arrest of several people associated with the file-sharing site Megaupload.com over suspicions of online piracy. Taking place against the backdrop of a wider, more civil protest against anti-piracy legislation currently before the U.S. Congress, the atmosphere around the attacks has been politically charged.

As Molly Wood of CNET put it, the #OpMegaUpload attacks — coming as they did on the heels of Wednesday’s peaceful anti-SOPA protest — seem like an “unsettling wave of car-burning hooligans that sweep in and incite the riot portion of the play,” spurring equally unsettling reactions from the powers that be.

Many outlets have portrayed the attacks as “hacks,” implying that someone had picked a lock in order to commit some kind of sabotage. But the tactic used — a distributed denial-of-service (DDoS) attack — is more aptly compared to a blunt instrument, requiring neither skill nor knowledge, only large numbers of willing participants who team up to swarm a site with more requests than it can accommodate and thus overwhelm its ability to function normally.

The adjective “willing” is debatable, and perhaps inaccurate. Anonymous was able to generate such impressive numbers with the operation — it claimed more than 5,000 participants — by spamming a link in chat rooms and via Twitter that, when clicked, triggered a tool used to launch the attack. People tricked into following the link are given no context or information, and so may or may not have any idea that they’re participating in the execution of a crime.

For the record, it is illegal in the U.S., the U.K., Sweden and other countries to launch and participate in a DDoS attack like the one Anonymous organized. As anyone who has observed the evolution of Anonymous (and its various affiliates using the names LulzSec and AntiSec) should know, the FBI arrested 16 people last July, many of them charged with participating in a DDoS attack against PayPal in protest of its shutting down an account used by WikiLeaks.

In 2009, a New Jersey man was sentenced to a year and a day in prison for launching a DDoS attack against the Church of Scientology. And in 2010, a 23-year-old Ohio man was sentenced to 30 months in prison for launching DDoS attacks against several prominent U.S. conservatives, including the author Ann Coulter, former New York City mayor Rudolph Giuliani and Fox News commentator Bill O’Reilly.

Records like that suggest to me that DDoS attacks never accomplish anything that the people who organize and carry them out attempt to do. At most, they inconvenience the people who visit and operate the targeted sites for a few hours, until the attention spans of the attackers shift elsewhere. They also generate headlines that are forgotten by nearly everyone except the targets, and sometimes law enforcement.

And so it will be this time. Mark your calendars, because the Megaupload revenge attacks will spur a series of arrests later this year. Some of those arrested will be people who didn’t know they were committing a crime. And that certainly won’t help Anonymous’ image. Nor will it further a single bit of what passes for the Anonymous agenda.

Its his second honor from the Queen, who named him Commander of the British Empire, or CBE, in 2006. The new title will be conferred by the touch of a sword held by the Queen.

Interestingly, Ive is only one of two people being given this particular title this year, from the extensive list of other honors published in the London Gazette. (Ive’s name appears on page 24 of the announcement; there’s a PDF of that page here.) The other KBE recipient is the art historian John Patrick Richardson, who wrote a well regarded biography of Pablo Picasso.

The best profile of Ive that I know of is this 2006 BusinessWeek story by my former colleague Peter Burrows. It’s more than five years old, and so may be a bit dated, but it’s terrific.

The full announcement from the British Embassy is below.

Her Majesty the Queen honours Apple designer with knighthood

31 December 2011

Jonathan (Jony) Ive has been appointed by Her Majesty Queen Elizabeth II a Knight Commander of the Most Excellent Order of the British Empire (KBE).

The honour, for the lead designer at Apple Inc. of products like the iPod and iPad, was part of the New Year 2012 Honours List and was in recognition of Jonathan Ive’s services to design and enterprise.

“I am keenly aware that I benefit from a wonderful tradition in the UK of designing and making,” said Jony Ive. “To be recognized with this honour is absolutely thrilling and I am both humbled and sincerely grateful.”

“I discovered at an early age that all I’ve ever wanted to do is design,” Ive added. ” I feel enormously fortunate that I continue to be able to design and make products with a truly remarkable group of people here at Apple.”

The British Consul General in San Francisco, Priya Guha, said she was “delighted that Jony Ive has been granted this exceptional honour by Her Majesty The Queen. Through his design of the iMac, iPod, iPhone and iPad, his work has transformed the lives of a generation of people, revolutionising the way people interact with technology. He epitomizes the strengths of British design and innovation.”

British Honours are bestowed on merit for exceptional achievement or service to British interests. This is the second royal honour for Ive, who was awarded a CBE (Commander of the British Empire) in 2006 for his achievements in British design and innovation. The current Knighthood recognises his work on raising design standards generally in consumer, industrial and professional goods and for his championing of British design.

Jonathan Ive becomes Sir Jonathan Ive, and the knighthood will be conferred by the touch of a sword by Her Majesty The Queen.

London-born designer Ive is the Senior Vice President of Industrial Design at Apple, reporting directly to the CEO. Since 1996, he has been responsible for leading a design team widely regarded as one of the world’s best.

Ive has demonstrated a life-long commitment to design. He has been recognized with numerous design awards including being named Designer of the Year by the Design Museum London and awarded the title Royal Designer for Industry by The Royal Society of Arts.

Ive holds honorary doctorates from The Royal College of Art, The University of Arts London, the Rhode Island School of Design (RISD) and Northumbria University (Newcastle Polytechnic) where he also received his Bachelor of Arts degree. He holds 596 design and utility patents in his name.

After graduating in 1989, he co-founded the London design agency Tangerine, where he designed everything from washbasins to televisions. In 1992, he moved to Apple and, after the return of Steve Jobs in 1997, became Senior Vice President of Industrial Design, designing the first iMac in 1998, its progressively sleeker successors, and then the iPod, iPhone and iPad.

The Queen chooses the recipients of Honours on the advice of the Prime Minister and other relevant ministers, to whom recommendations are made by their departments or members of the public. Private nominations–those made by individuals or by representatives of organisations to the Prime Minister’s Office–can also be made and account for about a quarter of all recommendations.

(Image is a screen grab from this Apple video on the MacBook Air.)

Rather than become an HP executive, Autonomy CEO Mike Lynch, who’s been described as Britain’s first software billionaire, will remain head of Autonomy, which HP will operate as a wholly owned subsidiary, though he will report to Whitman.

Of course, the deal didn’t get done without some drama — what does get done at HP without drama these days? First there was the shock at the price paid, which represented a 64 percent premium over Autonomy’s share price. It was just one of the things that led to a shareholder lawsuit against HP.

There were certainly enough questions about the deal to cause some speculation around the notion that HP might try to back out of it. Those ideas gained some currency when HP’s board of directors fired former CEO Léo Apotheker, but not before giving him a pricey exit package.

Then there was the Oracle shopping scandal. Asked about Oracle’s position in the unstructured data market two weeks ago, CEO Larry Ellison said that his company had passed on a chance to acquire Autonomy because the price was too high. Lynch, apparently falling into a PR trap laid by Oracle, took issue with Ellison, saying Autonomy had never been shopped to Oracle, prompting Oracle to publicly call Lynch a liar, then produce a set of PowerPoint slides as evidence. Lynch then went on to blame his eager banker, Frank Quattrone. Of course, it was widely known that Autonomy had been quietly shopped around for months.

So that little kerfuffle is over, now that HP is in control and its corporate communications team, led by Lynn Anderson, is in charge.

Meanwhile, there’s the larger mission to worry about: HP has to prove that Autonomy was worth all that money, and there’s an awful lot at stake. HP shares are still trading near their lowest levels in six years, and closed today at $22.20, down 25 cents. According to the disputed slides prepared by Qatalyst partners that were shared at one time or another with Oracle, Autonomy is expected to bring in $1.1 billion in revenue next year, which would amount to less than 1 percent of HP’s forward revenue projection for 2012 of $127 billion. It’s going to be tough to make it pay. But like it or not, HP is stuck with it now.

As we reported Wednesday, Oracle decided to slap Lynch silly with a public rebuke concerning his comments to The Wall Street Journal that his company had never been shopped to Oracle.

Always eager to clear up the record — just, well, you know, because — Oracle went on to publish the PowerPoint slides sent by investment banker Frank Quattrone of Qatalyst Partners to Mark Hurd in January. The slides may or may not have had anything to do with a meeting held by Lynch, Quattrone, Oracle President Mark Hurd and its head of M&A, Douglas Kehring, in April. Or not! You see, the stories vary.

(Oracle, by the way, has since taken down the slides, but you can still read them here. Update: And we’re now told the slides are back up. Interesting!)

But what about the email those slides arrived with originally? Well, a kindly source has sent it to us. Dated Jan. 26 — you can read it below — it was sent to Hurd by Quattrone (whose address I’ve deleted as a courtesy). Judge for yourself, but to me it sure reads like the windup to a sales pitch.

From: Frank Quattrone
Date: January 26, 2011 7:48:37 AM PST
To: “‘mark.hurd@oracle.com’”
Subject: Fw: Autonomy slides

Hi Mark,
It was great to catch up earlier this month. I wanted to follow up by sending the slides I promised on Autonomy. Given its strong position in managing unstructured data (such as video, voice and photos), “meaning based” contextual enterprise search, data protection, compliance, archiving and content/web management, I beleive it’s a very strategic asset that could alter the balance of power in the industry for whoever might acquire it. And despite its strong track record of growth and very high profitability (50 pct margins), it trades at less than 20x earnings and around 11x Ebitda, huge discounts to the other strategic software assets of scale. Please let me know if you would like me to follow up with you, Doug K or otherwise.
Thanks
Frank

And it was! At least the email part. Quattrone weighed in on the whole kerfuffle via an email to Lynch, which Lynch then shared with the Financial Times Alphaville blog:

“The slides Oracle posted publicly were sent by me to Mark Hurd in January, were prepared by Qatalyst and were for the purpose of our independently pitching Autonomy as an idea to Oracle. These slides were not used in our April meeting with Mark and Doug.”

So what of the meeting in April? Well, apparently it wasn’t a sales pitch at all. No, really. As Autonomy said in a statement also sent to the FT:

“In April 2011, there was a meeting for approximately thirty or forty minutes between Autonomy and Mark Hurd, which was set up by Frank Quattrone as an introduction to Mark Hurd. Oracle is an Autonomy customer. It was made clear that Autonomy was not for sale and no sale process was under way. Mr. Quattrone’s company was not engaged by Autonomy at that time. There has been no other contact with Oracle since then. …

“Qatalyst have informed us that the slides Oracle has recently posted on its website were prepared and sent independently by Qatalyst to Oracle on 26 January (the content is clearly from January). This is the first time we have seen them. Autonomy was not involved in this nor was Qatalyst engaged by Autonomy until mid-year. Autonomy did not present these slides in the meeting.

“Oracle seems a little confused about the sequence of events and origins of the data it has received, something that would suggests it needs better management of and insight into the unstructured data on its internal systems. We would be delighted to help.”

Oh, snap! At least Lynch is learning the art of the snarky retort. So the slides were the work of eager bankers trying to get a deal cooking. And the meeting was just a friendly call by Autonomy’s CEO on a customer? With an investment banker and another company’s head of M&A — two people who have collectively done more Silicon Valley deals than any other people in the world — joining in just for kicks? Okay then.

While this tit-for-tat seems like a mildly entertaining tempest in a teapot, it’s a $12 billion teapot! One about which HP shareholders still seem to have a lot of questions, especially in light of the management change that has gone on there since the deal was announced. Time, however, is short: HP is said to be about ready to close on the deal Monday.

Why is it so important to Lynch that the world believe that Autonomy was not shopping itself, and not engaging in any discussions about selling itself? Because laws in the U.K. about corporate acquisitions are very strict, for one thing. And companies engaging in discussions about being acquired without disclosing that fact to shareholders quickly find themselves in hot water with regulators! That means CEOs in the U.K. get ticklish on this subject very easily.

Of course, the first official public disclosure about Autonomy being in discussions to sell itself to anyone crossed the wires at 1:32 pm New York time on Aug. 18, which, by my watch, is about two minutes after markets had closed in London. The disclosure, however, came about an hour and change after Bloomberg News reported that a deal was near. About 90 minutes after Autonomy’s disclosure in London — and with 52 minutes left before the close of markets in New York — came HP’s confirming statement that it was “in discussions.” Then, just after markets closed in New York, the deal was done. That leaves plenty of room for people on both sides of the Atlantic to ask all kinds of fun questions. Anyway.

And as we all know, Oracle — whether in January or April — passed on the opportunity to bid on Autonomy, primarily because the price was, as CEO Larry Ellison put it on a conference call last week, “shockingly high” at about $6 billion. And four months later — or eight, depending on when you start counting — on Aug. 18, Hewlett-Packard announced its plans to acquire Autonomy at nearly twice that price.

So what was the purpose of the April meeting in Oracle’s board room in Redwood Shores? Was it really a “lively discussion about databases,” as Lynch has previously claimed? Or an innocent customer call during which two masters of tech M&A just happened to be in the room? We don’t know exactly.

But we do know one thing: Having first characterized Ellison’s description of the matter as “just inaccurate,” then copping to a previously undisclosed meeting of some kind, Lynch does know how to change his story.

Scotland Yard says it has nabbed two more people that it says are members of the group; one of them is said to be connected to crimes committed under cover of the online identity “Kayla.”

In a statement, police did not release the names of the two men arrested. They are aged 20 and 24, and one comes from the town of Mexborough, while the other comes from Warminster. The arrests were conducted in cooperation with local police and the FBI. In one case, a home was searched and computer equipment taken.

It was the second pair of arrests in as many days. On Thursday, police arrested two others as part of the growing worldwide investigation into the activities of LulzSec and Anonymous.

And yet the hacker crimes continue, seemingly unabated. Anonymous has dubbed today “Texas Takedown Thursday” or #TTT on Twitter. The target: Law enforcement agencies in the state of Texas, in apparent retaliation for the arrests earlier this summer of 16 people said to be associated with Anonymous.

The group says it has leaked about three gigabytes worth of email and other data from private email accounts it says belong to certain police officials in Texas. It also claimed credit for defacing a Web site belonging to the Texas Police Chiefs Association.

It’s the second such targeting of police officers in a particular state. In June, the group went after the Arizona State Police, posting home addresses of officers.

LulzSec and Anonymous, in their various contortions, have had a busy summer. The group and its sympathizers started out making Sony’s existence miserable, on the heels of an attack on the PlayStation network; the attack brought the network down for several weeks.

In a speech to Parliament today, Cameron appeared to endorse the idea that posts on Facebook and Twitter, and communication via BlackBerry Messenger, helped fuel the violence that crippled his country for several days. And he floated the notion of a government-sanctioned crackdown.

From his prepared remarks:

Mr Speaker, everyone watching these horrific actions will be stuck by how they were organised via social media.

Free flow of information can be used for good. But it can also be used for ill.

And when people are using social media for violence we need to stop them. So we are working with the Police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality.

And here, wags will point out that British cops are also using social media, because they posted photos of looters on a Flickr page – here’s one the cops say was taken from a looter’s own Twitter post – and isn’t that a double standard, blah blah blah. Don’t waste your energy debating that one.

If a crackdown moves forward, though, it will put services like Facebook and Twitter in a tricky position: The services’ standard line is that they’ll comply with requests from cops and courts in whatever country they operate in when it comes to subpoenas and the like. But actually censoring communication is a different matter. BlackBerry maker Research in Motion has already said it would work with cops trying to trace text messages sent using its service.

Also worth bearing in mind: Freedom of speech is already much more limited in the U.K. than in the U.S.; recall the farcical but somewhat effective effort to prevent U.K. newspapers and Web sites from printing soccer star Ryan Giggs’ name this spring.

UPDATE: Here’s a response from Twitter spokeswoman Rachel Bremer: “Our only comment is that if the government would like to talk about this we’d be happy to listen.”

The photo, which appeared on the U.K.-based tech site shinyshiny.tv, is of Jake Davis, an 18-year-old resident of Britain’s Shetland Islands, specifically the island of Yell. The original photo appeared in the Instagram account of a user known as timbr. Update: Timbr turns out to be Tim Bradshaw of the Financial Times.

After reports surfaced suggesting that police may have been tricked into arresting the wrong person, police say they’re certain they have their man.

Davis appeared in a City of Westminster court this morning and was granted bail; he is next scheduled to appear in court on Aug. 30. He faces five charges related to distributed denial-of-service attacks against several sites, including, notably, the U.K.’s Serious Organized Crimes Agency in June.

Using the online handle “Topiary,” Davis had functioned as the group’s spokesman and gave interviews to the media about its activities. The group attracted a great deal of media attention for its numerous attacks against, among others, Sony, PBS, Nintendo, Britain’s National Health Service, the U.S. Senate, the U.S. Central Intelligence Agency, private affiliates of the FBI, and the Arizona Department of Public Safety.

The arrest in the U.K. followed a string of arrests in the United States, in which 16 people have been accused of being involved with the distributed denial-of-service attack against PayPal, the payment unit of eBay. LulzSec had in recent days been organizing a protest against PayPal, encouraging people to kill their accounts with the service.

LulzSec’s Twitter account has been quiet since July 27, the day the arrest was announced. And the Twitter account belonging to Topiary has been wiped of all messages, save for one saying “You cannot arrest an idea.” The Twitter account belonging to AnonymousIRC, the group under whose banner LulzSec briefly operated, included a message of support.

http://bit.ly/obmiaW | Stay strong, @atopiary. We will continue this, as your last tweet is truth. We, the people, silent no more. #AntiSec

August 1, 2011 4:56 am via TweetDeckReplyRetweetFavorite

@AnonymousIRC

AnonymousIRC

The idea, they say, is to use cloud computing to monitor and analyze power use at British homes and businesses, as part of an overall plan to reduce the country’s energy use and therefore its carbon footprint.

Several existing wireless players have tossed their hats in the ring to build smart meter systems, including BT, Telefonica and Vodafone. They all want a piece of a big UK government contract that could be worth as much as $14 billion to install smart meters in every home by 2020 as part of a wider plan to reduce its carbon emissions by 80 percent by the year 2050.

IBM and C&W say their plan, which they call the UK Smart Energy Cloud, will gather data many times a day from smart meters around the country and store it in a cloud hosted in the UK. The data would then go to power utilities for analysis, to make sure customers are billed according to their usage.

IBM is also involved in a nationwide smart grid project in Malta and has a hand in a pilot project in Denmark. C&W has more than 1,000 network sites, and many, it says, are located at electrical substations. IBM and C&W would essentially become a middle man, saving UK power retailers from having to make huge investments in computing and communications infrastructure.

The five range in age from 15 to 26 and were arrested in early-morning raids on their homes. They’re accused of being involved in distributed denial-of-service attacks, where groups of users flood a Web site with more traffic than it can handle, thus slowing its performance to a crawl.

!n 2010 the group claimed responsibility for attacks on several Web sites, in apparent sympathy with WikiLeaks–the secret-exposing site that last year unleashed a barrage of previously confidential U.S. diplomatic cables. Targets of Anonymous included the Web sites of PayPal, Mastercard and Visa Europe after those companies stopped financial contributions from going to accounts belonging to the WikiLeaks organization. The action was dubbed “Operation Payback.” The police declined to say which attacks the five arrested are alleged to have taken part in.

Amazon was thought at one point to have been a target when its service went down briefly in December at a moment that coincided with chatter that Anonymous wanted to attack it. The company later said it had suffered a brief hardware problem.

Calling Anonymous a group is a bit misleading. Most of the people who chose to participate in one of its attacks did so by downloading software to their computers called the Low Orbit Ion Canon. Attacks were organized on the channels of Internet Relay Chat, and coordinated orders for all participants to “fire” their weapons were issued on Twitter. The software running on each desktop would then simulate legitimate Web requests to the target site, inundating it with so many requests that it would be overwhelmed and effectively rendered useless.

Earlier this month the group had trained its sights on Web sites belonging to the government of Tunisia, following civil unrest there, and just yesterday it was said to be attacking sites in Egypt.

This is the second round of arrests related to the attacks. Two teenagers in the Netherlands have also been arrested–one said to be connected to the attacks on Visa and Mastercard, the other allegedly involved in an attack on the Web site belonging to a Swedish prosecutor investigating sexual assault charges against WikiLeaks founder Julian Assange.

And speaking of Assange, CBS just announced that he’ll be interviewed by Steve Kroft of “60 Minutes” this Sunday. Here’s hoping that prompts a new Assange sketch from “Saturday Night Live,” like the one below from December.