Peregrine users weigh up the options

Organisations using Peregrine Systems infrastructure asset management software must consider their options carefully following...

Organisations using Peregrine Systems infrastructure asset management software must consider their options carefully following its decision to file for Chapter 11 protective bankruptcy, analysts say.

Peregrine, whose European customers include Guinness and German airline Lufthansa, is under investigation by US financial authorities and is selling off its Remedy helpdesk software division to BMC.

The company grew rapidly last year, first buying the Tivoli Service Desk product from IBM, and then acquiring Remedy in August 2001. Now customers and potential buyers have difficult questions to ask.

The first thing existing users should do, according to analysts, is to examine their needs and any existing relationship with Peregrine.

"The technologies, the products themselves, are solid products," said Kris Brittain, an analyst at Gartner. "We're telling established clients [of Peregrine] that maybe they don't want to make major new investments [in the software for the foreseeable future] but that there may be no reason to throw it out."

But for potential customers who have been looking at Peregrine's infrastructure, service and asset management software offerings, "it's a tougher call", Brittain said.

If a company determines that Peregrine's products would be the best fit for them, then they have to be prepared to cope with Peregrine as it fights to overcome its recent problems.

On the positive side, Peregrine has been a known brand for more than a decade, and has a large installed base with deep service and support in the marketplace, Brittain said. Among Peregrine's service partners is IBM, which has helped some 400 of its customers migrate to Peregrine products.

IBM will need to reassure customers that support will be there despite Peregrine's recent problems, said Brittain. "Clearly, IBM's not going to leave their customers in a lurch."

Nevertheless, existing and potential Peregrine customers should have contingency plans to deal with any additional problems suffered by the software maker, she said.

Stephen Elliot, an analyst at Hurwitz Group, said his firm has many calls from worried clients.

"There's a lot of hesitation about what they're going to do," he said. "Even if they do survive, you have to question how much will be left. And from a customer standpoint, that's not something you want to hear."

The sale of Remedy service management software to BMC Software is good news for users, he said. "Without a doubt they can breathe a sigh of relief," Elliot said. "I think Remedy has a good home."

Shawn Willett, an analyst at Current Analysis, said Peregrine could face additional problems of trust with customers because it has dropped products in the past and left some users facing difficulty.

Peregrine announced this week that it has received court approval for $60m (£39m) financing to help pay expenses while it restructures.

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