HP Buys Peregrine and AppIQ

Last week saw a very busy HP announce that it had reached agreements to acquire two vendors of infrastructure management software tools. The deal to buy AppIQ, a provider of open SAN (storage area network) management and SRM (storage resource management) technologies gained some publicity but was pretty much overshadowed by the purchase of Peregrine, one of the most visible vendors of IT asset and service management software. What impact will these deals have?

The deal with Peregrine Systems will see HP pay a little over 6 per share for the entire equity, thereby effectively pricing the acquisition at 25 million (£236 million or €331 million). Peregrine’s well known Service Center and Asset Center offerings include comprehensive service desk and asset management tools, but they have also extended to include closely related features such as tools for aligning services with business demand, inventory and asset discovery, expense control and some process automation facilities. It is expected these solutions will be integrated with the HP OpenView portfolio.

Upon closure, which is expected to occur before the end of the first quarter of 2006, Peregrine’s offerings will be made available through the HP OpenView software channels. There is no doubt that if HP can successfully integrate Peregrine’s capabilities into its existing OpenView solutions, the company could develop a formidable range of IT management software. This could give the company an excellent opportunity to expand the customer base for its software business.

At the same time, it will be interesting to see how the acquisition will effect Peregrine’s relations with some of the other large IT vendors that currently offer its products. There is also the question of just how the deal will affect HP’s current very close relationship with Altiris. Both HP and Altiris have enjoyed some success selling the Altiris range of IT Lifecycle management tools, including Service and Asset Management solutions.

Whilst the Peregrine deal has garnered most attention, we should not overlook the announcement of the agreement to acquire AppIQ. No financial details of the deal for the privately held AppIQ were released. Although AppIQ does not enjoy the highest profile possible in the highly competitive storage management space, that is at least partly due to the fact that much of the use of its solutions occurs via OEMs. Organisations including SGI (Silicon Graphics), Sun Microsystems, Engenio, and Hitachi Data Systems sell various components of AppIQ StorageAuthority Suite. HP also utilises various tools ‘OEMed’ from AppIQ.

The software focuses on providing storage resource visualisation, provisioning, monitoring, reporting and policy-based automation capabilities. In addition the software helps to link the availability of business-critical applications with SAN configuration, capacity and performance. These are areas that all organisations are looking to simplify as their businesses become more and more dependent on access to the ever-expanding volumes of information they hold.

Together these are very interesting acquisitions and offer the opportunity for HP to develop, hopefully aggressively, its software business. HP has much potential in the software space that it has not yet effectively translated into sales.