Peregrine's CEO on life after bankruptcy

FRAMINGHAM (10/23/2003) - John Mutch, who has been CEO of San Diego-based Peregrine Systems Inc. for just two months, is learning fast what it's like to head a company that has recently emerged from bankruptcy. He spoke with Computerworld last week about what's working and what still needs to be fixed. Excerpts from the interview follow:

How do you distinguish Peregrine from its competitors?

We still have a core product advantage. We have best-of-breed (products) in both asset and service-center management. My sense is that our products offer more depth of functionality and are easier to integrate (and) still offer things our competitors do not. Our partnerships with IBM and EDS and our professional services experience provide strong value.

Who are your most formidable competitors?

Our competitors are BMC with its Remedy line (acquired from Peregrine in 2002), and we see Computer Associates with its help desk line. But we have strengths and weaknesses against both. Remedy is more of a tool set. CA has very strong breadth across the entire stack of products, but individual components are weak. In an enterprise sale, we typically partner with IBM, and in stand-alone product sales, we use our professional services to differentiate ourselves.

Would you like to have Remedy back?

I'm not sure we do want Remedy back. When you consolidate back to your core value, you have the opportunity to do things quickly and well. The complexity that Remedy brought to that process was not helpful.

What areas still need improvement?

There are several things we need to look at. We are articulating a very solid product road map that extends the value of existing (products) and makes them more open and extensible, so there's a whole area of delivering on the product leadership and thought leadership.

Another element is pricing. Our company needs to be more flexible in the way we license our products to customers. Over the course of the next 90 to 120 days, you can look for changes we will make to the way we license products that will make it easier for customers to do business.

What do you say to customers who are worried about the bankruptcy?

IDC just came out with a share-analysis report showing a US$968 million market in calendar year 2002 for problem-management products and said we were No. 1 with Remedy and No. 2 in the market without Remedy. We also have $50 million to $60 million in unencumbered cash and are operating in a cash-flow-neutral to cash-flow-positive basis. We have new-license growth. We're not hearing that noise level around survivability anymore.

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