Peregrine claims to have more than 3,500 customers worldwide and products that cover the full spectrum of enterprise IT service desk and asset management. HP said it would be combining the R&D teams and budgets to double up on IT service management and business services management.
The move tops out a series of acquisitions made by HP over the last couple of years that saw it take over six companies in little more than 12 months to bolster its product proposition for IT service management, most notably with the addition of configuration change management and service modeling capabilities through the purchase of Novadigm and Consera.
There has since been a concerted market push within HP around a quartet of service disciplines that includes infrastructure management, applications management, IT service management, and business service management.
The vendor has positioned its core ServiceDesk and Service Level Manager suites as funnels for all critical IT operations data through one enhanced common configuration management database, or CMDB. This cuts across all the modules of helpdesk (incident and problem management), change management (approvals, setting word orders, project planning, and risk analysis), and service level management (to set the overall SLA and define service level objects).
As well as selling its own rival service center and asset management software suites, Peregrine is currently working on a major product development that will add a new analytics suite to aid decision-making in the context of IT service delivery. This is intended to help consolidate its position around it present focus on IT asset management and service delivery, where is competes chiefly with BMC Software Inc with IBM Global Services lined up as its biggest partner.
Peregrine’s installed base has been been well served by IBM Global Services, and Todd DeLaughter VP and GM for HP’s Management Software Business confirmed that 16% of Peregrine’s new software license sales still come through the IBM channel. Most of these sites are likely also to be running HP OpenView, and over time, he said customers would start to see a joint road map. The acquisition bolsters the HP portfolio in the area of asset management, HP didn’t have an offering. Peregrine has a very strong market offering and a big market footprint in the arena of ITSM, he said.
Going forward in the context of HP’s Adaptive Enterprise strategy, the product sets will be seen as being very complementary in that they are increasingly offering business views of IT events. Peregrine is providing business views with off-line analytics, and OpenView is handling run-time monitoring and providing the event management views needed to decide how to flex IT to better meet business demands, said Mr DeLaughter.
Peregrine’s current CEO, John Mutch, is likely to leave the company by mutual agreement after successfully bringing Peregrine through bankruptcy filings. The San Diego, California-based company came badly unstuck after an acquisition spree which saw it buy 16 companies in five years that eventually led to revenue-recognition irregularities, three changes of auditors in a year, the purging of all its top executives, and a market value that slumped from several billion dollars to a few million. It filed for Chapter 11 bankruptcy protection in September 2002 and was subsequently delisted from Nasdaq.
In an interview with Computer Business Review in April, Mr Mutch hinted that he would not be surprised if a company like HP or IBM tabled an offer for the company. Despite its past financial woes, Peregrine managed to remain a market leader that was able to point to installed base loyalty and a strong following among the universe of the big systems integration houses. Throughout its troubled times, it has managed to retain a credible service and asset management vision, as well as a solid maintenance revenue stream.
In market share terms, HP is already occupying the number one spot in distributed system and network management, ahead of Computer Associates and BMC.
The acquisition is expected to close no later than the end of the first quarter of calendar year 2006 and is subject to Peregrine stockholder approval. For the last full fiscal year ended March 31, 2005, Peregrine showed a net loss of $25.4m on a revenue line of $191m, of which $109m was attributed to maintenance revenues.
