Peregrine Systems has confirmed it will purchase Tivoli Systems' Service Desk suite of products for $US105 million by year-end.
The announcement confirms news of the deal reported by IDG publication Network World in the US last week. Peregrine will pay $US45 million in cash and three million shares of common stock to acquire the Tivoli software suite, which includes Problem Management, Change Management and Asset Management products. Peregrine will also take over sales and maintenance contracts for the Service Desk products.
Peregrine says it intends to support the 1000-plus Tivoli customers for at least 18 months, but customers will be offered incentives to migrate to Peregrine products, such as ServiceCenter and AssetCenter. About 120 Tivoli Service Desk developers will be offered positions at Peregrine's development labs in Indianapolis.
Tivoli obtained the software suite that formed the basis of Tivoli Service Desk in 1998 when its parent company IBM acquired Software Artistry for a little more than $200 million.
Patrick Dryden, an analyst at industry research firm Nashua, suggests that the decision to sell off the Tivoli Service Desk offering was an indication that IBM might not have gotten what it hoped for with the acquisition.
The sale "is not so much a Peregrine falcon preying on a Tivoli turkey as it is [an acknowledgment] by IBM that the best tool is not Tivoli's," claims Dryden.
Meanwhile Mark Latchford, Tivoli general manager Asia Pacific, claims the acquisition will have minimal impact on the 10 existing Tivoli partners that take the Service Desk suite to market in Australia. Tivoli has around 25 partners in the country.
Under the terms of the agreement, Tivoli will still be able to go to market with the bolstered Peregrine product range in what Latchford sees as an advantage over the Tivoli product suite alone. Latchford is in the process of promoting this advantage to the Tivoli and Peregrine channels in the Asia-Pacific region.
"What I'm telling the combined Tivoli and Peregrine partners when I sit down with them is that now they have the depth of product with Peregrine and the breadth of product with Tivoli," says Latchford.
Tivoli has protected its interests fairly well, ensuring it will have the right to represent the product in the market for some time, assures Latchford.
While research from International Data Corp in the US has Tivoli above Peregrine in the help desk software market with 9.5 and 5.2 per cent respectively, Latchford believes Tivoli has partnered "with the market leader" in this space.