The Buzz: July 7, 2003

Peregrine Settles Fraud Suit With SEC

Peregrine Systems continued its long slog out of bankruptcy last week with the settlement of some of the Securities and Exchange Commissions charges against the company.

Peregrine, which develops asset and service management software, said it had signed a consent decree settling an SEC suit that alleged "massive financial fraud" by former officers of the company. The agency said the company improperly recorded hundreds of millions of dollars in revenue. Despite the settlement, Peregrine still faces possible civil penalties.

CEO Gary Greenfield, who joined Peregrine a year ago after the accounting scandal came to light, soon after took the company into bankruptcy. Peregrine officials said they expect the company to emerge from Chapter 11 bankruptcy protection this summer and have a full slate of product upgrades planned.


Just weeks after scooping up linus Torvalds, the creator of the Linux operating system, as its first full-time fellow, the Open Source Development Lab is bringing his right-hand man, Andrew Morton, on board as well.

The OSDL, a global consortium of technology companies dedicated to accelerating the adoption of Linux, last week announced that Morton, who currently helps maintain the Linux kernel, has joined forces with the lab and will be focused on the 2.6 kernel during its maintenance cycle. OSDL CEO Stuart Cohen said similar high-profile appointments are likely. Morton, who works as principal engineer for Digeo, a provider of media center products and interactive television services, will retain his official role at Digeo while being sponsored and supported by the OSDL for his Linux kernel development work.


The California Supreme Court last week issued a decision that many observers said protected the free-speech rights of those who send e-mail, while leaving the door open for companies to clamp down on spammers.

The court ruled that a former employee did not trespass on Intels private property when he sent e-mail critical of the company to tens of thousands of current Intel employees on Intels corporate network. Intel had argued that Ken Hamidis e-mail messages had damaged or impaired its e-mail servers and cost the company in lost productivity.

The court disagreed but said that companies can still use anti-defamation laws to go after parties that send mass commercial e-mail and ISPs can claim protection from spammers under trespassing laws if they show economic harm from the burden caused by the spam.


German enterprise software developer SAP plans to double the number of software engineers at its Indian facilities to about 2,000. This will make India the companys largest development center outside Germany. SAP Labs India has announced a $20 million investment in Bangalore to develop products for Indian customers.


Most IT outfits will outsource some work by 2006, according to a recent Meta Group report.

Seventy percent of companies are now outsourcing, with the number expected to climb to almost 100 percent by 2006, according to the report, which was released late last month. Many of those organizations have inflated expectations of how they will benefit from outsourcing, such as with automatically reduced IT expenses, according to the report, "The Outsourcing Desk Reference." One step to ensure success is to articulate primary business objectives before outsourcing vendors are invited for briefings, Meta reported.