Remedy Customers Await Deals Impact

Acquisition by Peregrine catches some by surprise; companies pledge unified technology platform

The news last week that enterprise software developer Peregrine Systems Inc. will acquire rival Remedy Corp. in a $1.08 billion cash and stock transaction caught some Remedy customers off guard.

"It was a total shock to me and to a lot of other people," said Kevin Forsyth, lead Remedy administrator/developer at VoiceStream Wireless Corp., in Tampa, Fla., and the head of Remedys Florida User Group.

Still, Forsyth said he is cautiously optimistic that the acquisition will pay dividends for Remedy customers. "If it turns out the way the press release says, its a good deal," he said. He added that Peregrine was in a stronger financial position than Remedy and has a more advanced Web interface, both of which could be good for Remedy customers.

Both companies last week promised to build future applications on a unified technology platform, bringing the best of both companies applications together. Forsyth said that Remedy applications such as the Action Request System for customer relationship management and the IT Service Management suite for IT help desks provide a flexible architecture for building applications that model a companys business processes. VoiceStream has built custom applications on both platforms.

Peregrine, Forsyth said, offers a similar technology employing best practices that customers must map their business processes to. "If the press release is true and they merge these applications together, it could be a good thing," he said. "Youd have the best of both worlds."

Peregrine officials said Remedys IT Service Management suite is slated to become Peregrines flagship IT help desk application for small to medium-size businesses. Peregrine will continue to lead with its ServiceCenter product to enterprise customers.

In the fourth quarter, Peregrine will rollout the Web version of Remedys AR System 5.0, which will be integrated with Perigrines B2B integrator suite.

In a letter to customers, Remedy Chairman and CEO Larry Garlick, in Mountain View, Calif., said the acquisition will ensure that the AR System continues on an "aggressive and innovative road map."

Garlick said the acquisition will enable Remedy to better address a number of challenges its customers are facing in the slowing economy, including managing deployment risk, getting a rapid return on investment, adapting quickly to a changing business climate and doing business around the world.

"Our customers can have both the out-of-the-box best-practices world and the adaptability of the agile business processes world," said Garlick, adding that the deal should close by late August or early September. "They wont have to choose one application over another anymore."

Analysts said the two are a good match. "Peregrine has never been able to go ... into the midmarket. Remedy plays well there and has the channel partners and direct sales organization to take Peregrine there," said Michele Hudnall, of Meta Group Inc., in Indianapolis. "Remedy is the glue to bringing several other acquisitions Peregrine has made together as it relates to infrastructure management."