Product
Background
Peregrine
Systems Inc. (NASDAQ: PRGN) has been known for applications that automate the
management of complex, enterprise-wide information and infrastructure assets.
While staying in that general territory, it is building a new field with its
"Get.It" application suite. The first team member is Get.Resources, an E-procurement
application that is being pitched at companies that acquire capital assets.
The company's existing products in this area, Asset Center and Service Center,
are designed for professionals within the company.
Get.Resources
is a self-service application that distributes capabilities and responsibilities
to individual desktops. Functionally it rides on top of Asset Center and may
optionally use capabilities of Service Center.
Capital
assets, ranging from real estate to desktop computers, differ from such consumables
in that their acquisition cost is typically only one-quarter to one-third of
the total lifecycle cost. Additional expenses accrue from such lifecycle activities
as configuration, installation, maintenance, monitoring, help desk support,
redeployment and retirement. Peregrine's Get.Resources works with the company's
existing Asset Center and Service Center products to manage assets through their
entire lifecycle. It can also be used to purchase consumables.
Asset
Center contains modules that, in totality, track the initial and ongoing costs,
location, and status of assets ranging from industrial machinery to software
licenses. Both purchased and leased assets can be accommodated, and cost tracking
can include acquisition, repair, operations, related consumables, and disposal.
Purchasers of Get.Resources need the core engine from Asset Center but do not
need to purchase every one of the modules.
Service
Center can add such capabilities as the automatic generation of work orders,
tracking service levels provided by third-party service providers, and consolidated
service desk management including trouble ticket and work order tracking.
Product
availability was announced December 8, 1999. The product is currently in beta
with two customers, although 1-3 more beta customers are expected. The formal
launch of the beta program is planned for February 2000.
Besides
the actual Get.Resources product, the initial launch is very likely an incremental
step toward a new architecture. While the company is making no formal announcement
of any architectural changes at this time, it is clear that its stated goal
of providing an integrated suite of employee self-service applications requires
such a move within the next year, because its current applications run on individual
databases and servers. A truly integrated suite would have a single database
for all products. This is clearly not a serious issue as far as Get.Resources
alone is concerned .
Product
Strategy and Trajectory
Peregrine's
strategy for Get.Resources has both product and marketing components. The crucial
marketing component is to avoid positioning the company as competing with either
ERP vendors or such procurement vendors as Ariba and Commerce One. Figure 1
represents this strategy.
In
this diagram Peregrine suggests that the lower half, especially the left quadrant,
represents the products that are in the domain of the well-known E-procurement
vendors and their marketplaces. The green triangle represents the procurement
activities of ERP vendors.
With
its emphasis on plant and equipment assets Peregrine hopes to find its sweet
spot in the upper left-hand quadrant, largely avoiding battles with ERP vendors
and the specialists in commodities like Ariba, Commerce One and Concur. It will
not shy away from competing in the lower left quadrant but plans to develop
its strength by selling to the nearly 5000 companies that have acquired Asset
Center, to whom adding Get.Resources over their current Asset Center holdings
will be a relatively easy sale.
Peregrine
offers purchasers of Get.Resources a number of ways to create supplier relationships
and to offer product catalogs to users. It has partnered with Commerce One,
so that any purchaser of Get.Resources can offer products from Commerce One's
MarketSite. It also supports point-to-point links with individual suppliers;
these catalogs can be stored either by the seller or the buyer. Most organizations
will end up with all three options.
An
organization that has special relationships with sellers may wish to manage
an internal catalog that reflects those relationships. Where it deals with sellers
of highly configurable products, like desktop computers, it will probably link
directly to the supplier. Peregrine has thus far created relationships with
about half a dozen suppliers, including Compaq, Dell, Office Depot, and Software
Spectrum, which should make catalog relationships easier. The vendor claims
that its catalog tools are sufficiently flexible to support relations with any
sellers a company wishes to work with - including both those that use any of
the current variants of XML and those that still rely on EDI.
Peregrine's
product strategy is to increase the breadth of its Get.It component offerings
and to offer products through an ASP (application service provider) arrangement.
For the latter it has already partnered with Exodus Communications. Peregrine
has previous ASP experience with E.Fleet, the hosted version of the its fleet
management software FleetAnywhere (which itself is not in the Get.It suite.)
The ASP version of Get.Resources is expected mid-year in 2000.
Installation
and catalog building will typically require a professional services engagement,
either with the Peregrine's internal consultants or with one of the systems
integrators with whom it has created relationships. These include KPMG, Anderson
Consulting, and IBM Global Services.
The company intends to achieve breadth with a variety of offerings that will
offer management of other corporate assets and services. Peregrine is not announcing
any other products at this time, but there are three obvious drivers to future
product development:
1.
Bringing other existing Peregrine products to the browser; besides the glitz
of making some these into E-commerce applications, this will have the benefit
of providing a unified interface to its tools. For example, a facilities management
offering, already available from Peregrine as a browser-based product, is a
likely new member of the Get.It suite.
2.
Taking advantage of its recent acquisitions for both its current products and
its underlying technology. Thus we expect to see product offerings in the knowledge
management area resulting from the acquisition of Knowlix, and in network management
resulting from its equity investment in Loran Technologies.
3.
Filling in offerings that competitors have. These might include functions such
as travel and expense report management, travel booking, and time management.
Given
Peregrine's aggressive history, we would expect to see these functions acquired
by acquisition or by strategic alliance involving significant equity investment.
It
seems safe to predict that with Peregrine's emphasis on Total Cost of Ownership
(TCO), an early addition to the product or product suite will be some way for
a company to realize revenue upon retirement of assets. This will most likely
take the form of an auction-based marketplace.
Get.Resources
is implemented as a collection of server-side Java functions (servelets). These
deliver pure HTML to the user's browser; no downloads or plug-ins are required.
Product
Strengths
Peregrine
has a strong presence in its chosen market, and for its target customers its
TCO approach to asset procurement will be a major advantage over procurement
vendors whose product features stop at the receiving dock. While the consumables
in the lower left quadrant in Figure 1 account for a large number of corporate
purchase orders, trackable assets may account for as much as four times the
dollar volume. Thus, a product to manage these costs will have a ready and willing
market. Peregrine claims to have customers who can achieve payback for the product
in as little as one month.
Get.Resources
has a number of well thought-out features. It integrates with information about
existing stocks and about lease vs. buy opportunities. While rogue buying, the
scourge of the commodities quadrant, may be less of an issue in the asset space,
the equivalent problem here is purchasing new equipment that may be already
available in the back room. Preventing this is certainly on the most wanted
list of many IS shops, where new employees get newly purchased desktop systems
despite the fact that an equivalent system may be sitting unused in the next
department. Get.Resources highlights these opportunities and can manage the
transfer of assets between different cost centers. (It does not have any special
abilities to manage the related issues of political turf and status symbol buying,
however.)
The
product has capabilities for supporting E-procurement activities that do not
go through the Commerce One (or any other) network, for cases where a company
wishes to deal directly with preferred vendors. It can, in fact, support non-electronic
procurement; although this requires manual data entry, it is still important.
The
use of server-side Java is a good technological choice. It should allow for
a high level of flexibility in making changes to the product. It is a platform
independent approach, is more efficient than older style CGI (common gateway
interface), and is a technology that programmers want to work with, thereby
helping the company to attract employees. Also, since it has no impact on the
browser it will be less troublesome than an approach using client-side Java.
Peregrine
will perform installation and integration with its own professional services
staff, but it will also partner with a range of integrators, from behemoths
like KPMG and Anderson to small regional systems integrators. The company is
in the process of training integrators in preparation for the February launch.
Although Peregrine partners with large firms, it certifies individuals rather
than firms. This protects against an integrator accepting a contract and then
putting inexperienced staff to work on it.
Product
Challenges
According
to Peregrine the user interface "is totally and easily customizable by the customer
to meet their needs." The unconfigured interface is weaker than we would
like. For example, a user signing on sees a screen with top-level functional
choices, one of which is to approve requisitions. This choice is available even
if there are no requisitions for this user to approve. Given Peregrine's workflow
engine we believe that this and other weaknesses can be repaired by customization.
However, we think that users really expect a more functional and personalized
default than Peregrine provides.
The
product interface is certainly functional, but is also somewhat simplistic.
While not a major failing, once Peregrine sees competition from other asset
management vendors who are moving into the E-purchasing arena it will find that
the front-end pizzazz can be an important differentiator.
We
also note that while Get.Resources offers asset management functionality not
available with most other E-procurement packages. To fully utilize all of the
features in those packages may require the user to acquire both Asset Center
and Service Center (see User Recommendations). We believe that Peregrine will
find this too steep an entry cost for users who do not already own its products.
By
the time the product is released for general availability Peregrine will need
to demonstrate successful implementations with high profile clients. Historically,
Peregrine has been plagued with a reputation for complex and high cost integrations.
It will be important for Get.Resources to reverse that trend.
Other
vendors in this space are advertising, or even promising, relatively short implementation
times. In some cases the time measured is to the first transaction or operational
user, and a considerable amount of the implementation occurs after that announced
date. Peregrine will do well to rise above that practice and achieve complete
implementations in a short time.
Even
so, prospective buyers will need to ask whether the companies with speedy implementations
started with Asset Center in-house. Those without Asset Center can expect longer
installations.
Vendor
Recommendations
As
a standalone product, Get.Resources promises to be a powerful product with some
user interface concerns. Although Peregrine is obviously gearing up for a barrage
of product announcements over the year, it should not neglect these issues.
While simplicity is an admirable goal, especially for a company trying to expand
beyond a product family that was targeted to power users, simplicity is only
one aspect of usability, and we believe that a more functional interface should
be the delivered default.
As
noted above, we assume that Peregrine is working toward a new architecture.
We see nothing wrong with bringing out the first product or even two while that
development is taking place. If our assumption is not correct we would expect
Peregrine to have some difficult problems as it continues to bring out new products
in this suite. But we have trouble imagining that anyone would fail to see the
necessity of uniform front ends and common back end components.
User
Recommendations
If
you own or expect to buy Peregrine's Asset Center, and want the kind of functionality
that this product offers - employee self-service capabilities delivered to browsers
-- we think that, with some cautions due to the fact that the product has not
yet been released, Get.Resources would be an easily justified addition - probably
a no-brainer. Its asset management capabilities will be quite attractive to
many companies and should make a significant impact on both workflow and lifetime
equipment costs. Since it works through Asset Center, it creates no significant
additional problems in integration.
Note,
however, the full potential of the product also calls for the installation of
Service Center. For example, without Service Center the product cannot automatically
act when, because a specified approver is unavailable, requisitions needing
approval back up. This is a feature we would expect to see as part of a procurement
package - and is available in most of the major competitors' products. Users
should weigh their need for features like this against the estimated six figure
cost for a Service Center installation.
If you are just coming out of the Y2K freeze and plan to implement asset management
before Get.Resources is ready, Get.Resources makes Peregrine's Asset Center
a more attractive choice. Is it attractive enough to make Asset Center an automatic
first choice? We recommend that you make your decision based on the underlying
functionality of the products you are considering. While other vendors may not
yet offer browser-based functionality, all are working toward it.
If you find that another vendor offers functionality that meets your needs as
well or better than Asset Center does, try to get them to reveal their Web strategy.
You can compare both the functionalities and the schedules for Web enabling-
and play the vendors off against each other during your negotiations.
Our
first look at this product leads us to hope that it will fulfill its considerable
promise, but remember that Get.Resources is just entering beta, and that the
size and extent of the beta program has not been made fully public. The last
step is sometimes a big one, and users should approach with caution.