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Infrastructure Management Wunderkind Divides And Integrates

Written By: D. Geller
Published On: November 21 2000

Infrastructure Management Wunderkind Divides And Integrates
D. Geller - November 21, 2000

Event Summary

Peregrine Systems (NASDAQ: PRGN) has reorganized itself into two business groups. The new Infrastructure Management Group (IMG) will handle Peregrine's core business, infrastructure resource management. This group will sell and support all solutions relating to asset management, which for Peregrine encompasses the full lifecycle of all complex indirect goods purchased or leased by the corporation. The newer businesses that stem from Peregrine forays into e-business and its acquisition of Harbinger (see Big Bird Dines Again) are collected into the E-Markets Group (EMG), which specializes in e-commerce connectivity, data transformation, catalog creation and management, and portal creation and management. EMG will target itself to four market verticals: automotive, energy, industrial components, and retail and distribution.

Peregrine also announced that it has completed integration of its e-procurement and infrastructure applications. By integrating Get.Resources (see First Look: Peregrine Offers Cradle to Grave Procurement) with the e-commerce enabling engine Get2Connect.net Peregrine promises to deliver a unified stream of data about the full lifecycle of assets.

Meanwhile the company has been uplifted by good financial news. Revenues were up in the first quarter, which ended June 30. Total revenues were $94.3 million compared with $51.6 million in the first quarter of fiscal 2000, representing a period-to-period increase of 83%. Expenses were roughly flat (except for the $113 million cost of acquiring Harbinger). Peregrine has also announced that since June 30 it has added eleven customers to its ASP service. The company's strategy calls for expanding its management products, including the entire Get.It! suite of Employee Self Service applications, ServiceCenter FacilityCenter and Real Estate Portfolio Manager.

Market Impact

Peregrine continues to fly high. It has been looking financially stronger for each of the past five quarters and is making well-focused product moves. It has an excellent story to tell about asset management, and integrating its asset management and procurement applications should let it approach or even achieve dominance in its sector.

The E-Markets Group has a steeper road to climb. Regardless of how good their product is the market is quite fragmented. Everyone wants to build a marketplace to tie in their suppliers and buyers, but everyone is also a supplier and buyer to a number of different companies. So everyone is asking "What are my requirements, what are my partners' requirements, what other marketplaces will we individually have to participate in, and how does it all tie together?"

To really win in the long-term Peregrine needs both market share and mind share, so that the eventual consolidation will leave them on solid ground. They don't have that yet - only Ariba and Commerce One (now working with SAP; see SAP Gives Up, Declares Victory. Again.) really have such leadership positions. Barring a significant step forward in standardization of interconnection technology, we don't see room for more than a small handful of additional leaders, even when considering the small and medium business space. Peregrine could be one of them, but it's got some work cut out for itself.

User Recommendations

Peregrine should be looking quite attractive to you if you want to pull together procurement and asset management. It's important for you to recognize that despite the glossy brochures there's are going to be problems interconnecting any new products with existing systems, so push really hard on all potential vendors to understand what they are offering in terms of connectivity and data transformation. Don't ignore the possibility of using Enterprise Application Integration software in place of what the vendors do (or don't) provide; see EAI - The "Crazy Glue" of Business Applications and Enterprise Application Integration - the Latest Trend in Getting Value from Data.

 
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