HP Buys Peregrine: Not So Unpredictable

News that HP is to acquire infrastructure management player Peregrine Systems is less than surprising, not least because Peregrine’s CEO John Mutch gave strong hints that he was looking for an exit for the company when I interviewed him in April this year.

As I wrote in our sister publication ComputerWire at the time: "The question must be asked whether infrastructure management is a big enough niche to support a company the size of Peregrine. As Mutch put it, ‘It would be disingenuous to say that an HP or an IBM might not look at us and say ‘you are now a great $200m company’ and think about acquiring us. We’re a public company’." [Image: Peregrine CEO John Mutch]Jmutch

But with or without the CEO’s hint at an acquisition, Peregrine had looked a likely acquisition target since it was rocked by an accounting scandal back in 2002. While Mutch had done a lot to restore confidence in the company and focus on its core strengths, he was only too aware of the damage that the accounting scandal had done to Peregrine’s brand.

What’s more, he had still not been able to get the company back into the black. For the 12 months ended March 31 2005 Peregrine reported sales of $191m, but a net loss of $25.4m.

On top of that, it had looked more and more likely that infrastructure management software would ultimately be simply rolled into broader systems management suites. That’s exactly what HP has now done, saying it will integrate Peregrine’s IT and asset management software into its OpenView business unit, as it puts it: "to create the industry’s most comprehensive distributed enterprise management software solution."

Good news perhaps for existing HP and Peregrine customers: HP’s get a broader offering from a single vendor, while Peregrine’s get the assurance of being part of HP – that worry over Peregrine’s finances had not faded. Not such good news, one would suspect, for at least some Peregrine staff, as HP’s CEO Mark Hurd will quickly want to get the business into profitability.

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