HP to Tuck in Two For Management
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UPDATED: HP is looking to give its already strong management software portfolio a lift, agreeing to purchase IT management specialist Peregrine Systems for $425 million in cash and storage management company AppIQ for an undisclosed sum.
Should HP close the Peregrine deal in the first quarter of 2006 as it Expects to, it will tuck the San Diego, Calif., company into its OpenView management software line.
The buy would certainly fill holes for HP. The Palo Alto, Calif., systems giant would gain key asset and service management components for OpenView. Peregrine makes applications for tracking IT assets, expense controls, process automation and service control and alignment, among other things.
The purchase is big news in the asset management software sector, which IDC expects to top $1 billion by 2008.
The deal should make HP a more formidable foe against rivals IBM and Computer Associates, leading makers of management software. Altiris, Provance and MRO compete in the second tier.
The increasing need for such software has been precipitated by the growing number of integration tasks that involve the bundling of disparate management systems.
For example, an enterprise might be forced to merge Unix, Windows and Linux operating environments.
"Peregrine will help HP deliver a more complete management software solution to CIOs and enhance their ability to manage their IT assets," said Ann Livermore, executive vice president of HP's technology solutions group.
When the deal closes, Peregrine software will be available through HP's OpenView software channels.
On the storage side, HP is buying AppIQ for its talent and StorageAuthority Suite.
The suite is a host of storage resource management (SRM) and storage area network (SAN) management tools geared to help businesses with several types of hardware work as one.
With AppIQ's technology, IT administrators can control all of their storage gear through one console, said Rich Escott, HP's director of storage management software.
This considerably cuts management costs because administrators don't have to spend as much time manually configuring heterogeneous storage devices to get them to work.
"It's a practical reality that our customers have mixed hardware environments, so our customers need HP to provide manageability that can span their entire infrastructure," Escott said.
The announcement comes as no surprise. HP has been reselling StorageAuthority as Storage Essentials as part of a joint product development, marketing, and services delivery deal inked last February.
Escott allowed that HP considered adding AppIQ for some time, noting that the companies' relationship has matured considerably since they began working together in standards bodies four years ago.
Financial terms of the transaction were not disclosed, but HP expects the deal will close within 45 days. When it does close, AppIQ will be fully integrated into HP's StorageWorks division.
Overall, Escott said today's acquisitions are reflective of CEO Mark Hurd's aggressiveness with regard to building up HP's "intellectual property to add value to our enterprise offering."
"We have strong support from our CEO to make these types of selective, targeted acquisitions," Escott said, noting that HP has finally absorbed Compaq to let the company focus on other purchases.