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.