HP to acquire AppIQ, Peregrine

Posted on September 19, 2005

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By Ann Silverthorn

—Hewlett-Packard today announced its intention to acquire two software vendors, moving the company closer to its goal of "holistically" managing data center from IT resources up to business processes. AppIQ has agreed to be acquired by HP for an undisclosed sum. The acquisition is expected to be completed in the fourth quarter.

HP also plans to acquire Peregrine Systems, an asset management software vendor, for $425 million. The deal is expected to close within 45 days.

John Webster, senior analyst and partner at the Data Mobility Group consulting firm, says the acquisitions fit well with HP's overall strategy of acquiring or partnering with companies to build a broad portfolio of storage products. "HP's had OpenView for years and has been in the larger networking and IT management arena for a long time," says Webster, "but the company seemed to have been struggling trying to get its storage management act together from the standpoint of OpenView."

According to an HP spokesperson, OpenView Storage Area Manager is the only product that will cause redundancy between the HP and AppIQ product lines. Since HP's Storage Essentials was introduced in February, HP has been working with OpenView Storage Area Manager customers on a migration path to Storage Essentials, which is based on AppIQ's StorageAuthority software.

Regarding the acquisition's effect on AppIQ's reseller relationships with vendors such as Engenio, Hitachi Data Systems, Sun, SGI and others, AppIQ CTO Ash Ashutosh says, "The deal has not closed yet, and it's business as usual. We continue to talk to each of our OEMs and convey the intention that HP has conveyed to us. HP sees OEM and channel partners as one of the key business values of this transaction."

Rich Escott, director of storage management software at HP says, "One of the reasons AppIQ is such a good fit is that they recognized the value of our OEM relationships and that we support multi-vendor storage infrastructures."

Escott adds that AppIQ technology will help HP broaden its heterogeneous resource management. "We can now address our customers' complex, multi-vendor environments," says Escott. "We can connect through all of those devices, so our automation and virtualization can work across the entire infrastructure."

"We will be layering automation and virtualization on top of SRM [storage resource management] so we can take the complexity out of managing the infrastructure, allowing it to be more dynamically managed," Escott continues. "In the past 18 months, we've invested in automation and virtualization with our acquisitions of Consera and Novadigm."

Headquartered in Burlington, MA, AppIQ has 135 employees, approximately 250 customers, and offices in the U.K., Hong Kong, Singapore and India. Privately held AppIQ declined to provide its revenue figures.

San Diego-based Peregrine, a public company with nearly 700 employees, reported sales of $191.1 million for the fiscal year ended March 31. HP will pay $26.08 for each Peregrine share. Those shares, which trade on the Pink Sheets, a provider of pricing and financial information for the over-the-counter (OTC) securities markets, closed Friday at $19.10. Shares rose 33% to $25.32 by Monday afternoon.

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