Peregrine Systems
| Company type | Public |
|---|---|
| Industry | Software |
| Founded | 1981 in Irvine, California, United States |
| Founder | Chris Cole, Gary Story, Ed Beck, Kevin Keyes, Richard Diederich |
| Defunct | 2005 |
| Fate | Acquired by Hewlett-Packard |
| Headquarters | Irvine , United States |
Area served | Worldwide |
Key people | John Moores (chairman 1990–2000, 2002–2003), Gary Greenfield (CEO until 2003), John Mutch (CEO from 2003) |
| Products | Enterprise asset management, change management, ITIL-aligned IT service management software (e.g., AssetCenter, ServiceCenter) |
Number of employees | Approx. 2,800 before bankruptcy in 2002 |
| Parent | Hewlett-Packard (from 2005) |
Peregrine Systems, Inc. was a software enterprise established in 1981 that focused on solutions for enterprise asset management, change management, and ITIL-aligned IT service management. Following a financial misconduct scandal and subsequent bankruptcy in 2003, Peregrine was purchased by Hewlett-Packard in 2005. Its product lines were later distributed by Micro Focus, which merged with HP's Software Division in 2017, and eventually by OpenText after acquiring Micro Focus in 2023.
History
Peregrine Systems was founded in 1981 in Irvine, California by Chris Cole, Gary Story, Ed Beck, Kevin Keyes, and Richard Diederich. The company initially marketed the Peregrine Network Management System (PNMS) on IBM Series One hardware before introducing MVS client/server versions of PNMS in 1995.
In 1989, John Moores—founder of BMC Software and owner of the San Diego Padres—joined Peregrine’s board of directors. He served as chairman from 1990 until 2000 and resumed the role in 2002 before stepping down amid the company’s bankruptcy proceedings in 2003. Moores remains influential in IT service management through his venture capital firm JMI Equity, which has invested in companies such as ServiceNow.
The company experienced swift expansion both organically and via acquisitions, notably acquiring Harbinger Corporation in 2000 and Remedy Corporation in 2001. Peregrine maintained a global footprint with offices throughout the Americas, Europe, and Asia Pacific to support its international operations.
Fraud
In 2004, a federal grand jury indicted eight former executives from Peregrine Systems, one ex-auditor, and two external associates on charges of conspiracy related to multibillion-dollar securities fraud. These charges followed investigations conducted by the FBI alongside concurrent civil actions enforced by the SEC.
The SEC filed charges against Peregrine in 2003 for orchestrating "massive financial fraud" intended to artificially boost revenue figures and stock valuation. Peregrine agreed to a partial settlement without admitting or denying these accusations.
In 2002, Peregrine initiated a $1 billion lawsuit against its auditor Arthur Andersen, accusing them of producing flawed audits that overstated revenues by up to $250 million between 2000 and 2002. Former CFO Matthew Gless pleaded guilty to fraud charges in 2003. In 2008, ex-CEO Stephen Gardner received a prison sentence exceeding eight years due to his involvement in the fraudulent activities that precipitated Peregrine's bankruptcy.
Although former chairman John Moores sold shares exceeding $800 million during the period when fraud occurred, an appeals court determined there was insufficient proof that he had knowledge of the fraudulent conduct that contributed to the company's downfall.
Sentences
- Stephen Gardner (former CEO): sentenced to 97 months at the Federal Medical Center, Devens. Gardner passed away from a heart attack in July 2013 while incarcerated at FCI Cumberland.
- Douglas Powanda (former Executive Vice President for Worldwide Sales): received a sentence of 78 months imprisonment at the Federal Correctional Institution, Bastrop, followed by two years supervised release.
- Matthew Gless (former CFO): sentenced to 63 months incarceration plus two years supervised release.
- Jeremy Crook (former General Manager for Europe): served 27 months imprisonment.
- Andrew V. Cahill Jr. (succeeded Powanda as Executive Vice President for Worldwide Sales): sentenced to 22 months imprisonment with two years supervised release; released from custody on October 22, 2010.
- Berdj Joseph Rassam (former Controller): sentenced to 19 months incarceration followed by two years supervised release.
- Larry Rodda (ex-managing director at KPMG Consulting): received six months imprisonment, six months home confinement, two years supervised release, plus a mandatory $100 special assessment.
- Richard Nelson (former Corporate Counsel): sentenced to one day incarceration, six months home detention, and completed 200 hours of community service.
- Ilse Cappel (former Assistant Treasurer): placed on probation for five years.
- John Burnham Benjamin (former Treasurer): given five years probation.
- Steven Spitzer (ex-head of Alliance Sales Program): sentenced to three years probation with a $5,000 fine, completed 200 hours community service, paid a $110,000 civil penalty, and barred from holding officer or director roles at any public company.
- Gary Lenz (former President & COO): received three years probation.
- Peter O'Brien (ex-Director of Alliances): given one year probation.
- Michael Whitt (owner of Barnhill Management Group): sentenced to six months federal prison and six months home confinement alongside a $60,000 civil penalty.
Charges dropped:
- Joseph Reichner (former Vice President of Alliances)
- Patrick Towle (ex-Revenue accounting manager)
- Dan Stulac (previously led auditing team at Arthur Andersen)
- Eric Paul Deller (former General Counsel)
Bankruptcy
On September 23, 2002, Peregrine sought protection under Chapter 11 following the dismissal of approximately 1,400 employees, representing nearly 50% of its workforce. This bankruptcy proceeding resulted in the elimination of common stock shares, wiping out more than $4 billion in shareholder value. During this period, the company divested its Remedy business unit to BMC Software for in excess of $300 million. Peregrine emerged from Chapter 11 bankruptcy in August 2003; at that time, president and CEO Gary Greenfield stepped down and was replaced by John Mutch, a retired executive from the software industry.
Sale to HP
In 2005, Hewlett-Packard purchased Peregrine Systems for $425 million. Subsequently, Peregrine’s product offerings were integrated into the HP IT Management Software suite within the HP Software Division.
Products
- AssetCenter – Enterprise IT asset management software originally acquired from Apsylog, currently marketed as HP AssetManager.
- ServiceCenter – Peregrine’s primary internally developed ITIL-compliant IT service management solution, now known as HP Service Manager.
- Connect-It – A data integration platform rebranded as HP Connect-It.
- Enterprise Discovery – Tool for automated discovery and inventory of IT assets.
- Knowlix – Knowledge management software obtained through acquisition.
- InfraCenter for Workgroups – Combined asset and help desk management application.
- InfraTools – Suite of infrastructure management utilities.
- Get-Services – Web-based application designed for managing change requests.
- Get-Resources (Get.Resources!) – Online system for IT resource requests with automated routing to service desks.
- Get-Answers – Acquired web-based knowledge management platform.
- Get-IT (Get.IT!) – Software enabling employee self-service procurement.
- FacilityCenter – Computer-Aided Facilities Management (CAFM) solution sold to TRIRIGA during financial restructuring; originally acquired as Span FM.
- FacilityCenter Reserve – Room reservation system divested to TRIRIGA; also an acquisition.
- Fleet Anywhere – Vehicle fleet management software sold to Maximus in 2002; acquired earlier.
- Rail Anywhere – Software focused on rail operations for both passenger and freight sectors; obtained through acquisition.
- Harbinger.Net – Supply chain enablement products sold to Golden Gate Capital amid financial difficulties; originally acquired.
- Extricity – E-commerce Business Process Management software divested to Golden Gate Capital in 2002; acquired previously.
- Remedy ARS (Action Request System) – Automated workflows and customer support software sold to BMC in 2002; an acquired asset.
- TeleCenter – Telecommunications asset management software obtained via acquisition.
- TRU – Telecom product line sold to Symphony Services Corp; previously acquired.
- Xanadu – Appliance designed for managing IT infrastructure.
- Tivoli ServiceDesk – IT service management software acquired from IBM.