Premises/FM Trends: Tririga and Peregrine
Jerry Laiserin

Once upon a time, there was managerial cost accounting, which was more boring than dust until some clever folks transformed it into the oh-so glamorous and au courant enterprise resource planning (ERP). IT asset management provider Peregrine Systems attempted to work a similar transformation on facility management (FM) by glamorizing it as infrastructure resource planning (IRP). The recent deal transferring Peregrine's FacilityCenter product line to intelligent building modeling vendor Tririga signaled the death of the IRP trend and a rejuvenation of the design-procure-operate building lifecycle as the strategic position of choice for the future of FM software.

In its May 8, 1998 acquisition of FacilityCenter as part of the former Span/FM product line, Peregrine had sought synergies with its existing offerings for managing IT infrastructure assets. Whether that purchase, paid for with $76.6-million of Peregrine stock, was a bonehead play or a wise strategy merely thwarted by economic and financial market conditions beyond Peregrine's control is a question to which we may never know the answer.

However, we do know that on August 5, 2002 Tririga paid $5-million to take FacilityCenter off Peregrine's hands, a 93% decline in price during the four years and four months that Peregrine owned the software. While this 93% decline is not as bad as the 99% decline in Peregrine's own stock (from a year 2000 high around US$80 to recent "pink sheet" quotes in the neighborhood of seven cents per share), FacilityCenter's value has not held up as well as Peregrine's $1.2-billion acquisition of Remedy help desk software, which was recently spun off to BMC for $350-million—a mere 70% decline in value.

(For those curious about the motivation behind Peregrine's fire sale pricing of so many assets: the company announced in May 2002 that its reported revenues from late 1999 through the end of 2001 had been "inflated" by some $250-million; the CEO and CFO departed; two different auditing firms in succession were either dismissed or withdrew from the Peregrine account; the company was unable to provide four years of required audited statements; the stock, trading as PRGN, was delisted by NASDAQ around August 29; and the company filed for bankruptcy around September 23.)

The question, then, is what has Tririga acquired? I first wrote about Peregrine and FacilityCenter in July 1999:

"Investment in IT assets at many organizations now equals or exceeds that devoted to traditional physical assets. As corporations and institutions rush to cyber-ize themselves, the old brick and mortar headquarters and campus assets become an evermore tempting hanging curveball for top management to swing at; calling the pitches is the task of IRP. The early leader in this market is Peregrine Systems (recent acquirer of the Span/FM CAFM products). With a suite of IRP applications to manage the life-cycle of physical assets as well as IT assets, Peregrine is poised to be to IRP what SAP is to ERP—the market leader."

Again in May 2001, while surveying the then state of the art in FM software, I wrote:

"At least one vendor has branched out beyond [FM's] architectural CAD roots to reach more broadly into the enterprise, specifically Peregrine Systems, which integrates the former Span/FM CAFM lineup into a larger IRP solution."

I repeated that last observation in an October 2001 look at FM systems in the context of post-September 11 disaster recovery, business continuity and security concerns.

Thus, one may well ask what went wrong with Span/FM-FacilityCenter under Peregrine and why should we expect it to go better under Tririga?

FM is one of those business functions that touches many areas and processes, but is rarely perceived as mission critical to any. Logically, FM could be integrated with the management of other infrastructure assets (IT plant, vehicle fleet, manufacturing equipment and so forth), as tried by Peregrine. However, many organizations split responsibility for diverse infrastructure assets among different managers, with the unintended consequence that software integration affords little benefit. In any event, Peregrine's other problems may have prevented a fair assessment of that approach.

Tririga has several advantages with FacilityCenter. Most obviously, it's a lot easier to earn a profit on a $5-million investment compared to a $76.6-million cost for the same assets. Equally important, all the graphics and much of the other attribute data that go into an FM system naturally flow from the design, procurement and construction processes that are Tririga's core competency. On the other hand, this continuity of building lifecycle information is unfortunately vitiated in many organizations—especially those in the public sector—by a strict separation between capital budgets used to design and construct facilities versus the operating budgets used to manage and maintain them.

In addition, Tririga operates on a web-hosted application service provider (ASP) model that has yet to achieve universal acceptance. Other ASP's that combine project management (PM) and FM functions have been patiently building their respective niches and client rosters—Bricsnet, ProjectEdge, and Centerstone come to mind. Established PM and procurement vendor Primavera Systems, with its market-leading ProjectPlanner and Expedition products, could prove a formidable competitor with its web-ASP service.

Other competition for Tririga's position in the PM+FM space comes from the traditional design software vendors, all of whom see big chunks of their future growth coming from the extension of CAD into CAD+FM hybrids (an important consideration here is that most FM data comes from and is viewed through a CAD system, so any end-to-end provider, such as Tririga, without its own CAD engine, may be at a competitive disadvantage). For example, Graphisoft offers the highly intelligent ArchiCAD design software (see this issue), as well as its ArchiFM and DrawBase FM tools. Bentley Systems has its integrated portfolio of Microstation Triforma tools for building design, plus very sophisticated model server, document management and project management offerings in ProjectWise and Viecon.

Finally, although Tririga has a promotional alliance with Autodesk in some markets (notably, hospitality and design-build), Autodesk also has a strategic investment in FM vendor FIS, and, further, has made it clear that its $133-million purchase earlier this year of Revit is intended to create "an underlying database that can serve all building industry players at any juncture in the process of designing, constructing, and managing facilities" (italics added, see Autodesk's statement in this issue's LaiserinLetterLetters.

Tririga is a spin-off from Las Vegas design-build firm Marnell-Corrao Associates (MCA) which helped build many of Las Vegas' current generation of giant casino hotels and which continues in that business. The combination of Tririga's project information flow that is automated at the level of CAD objects rather than CAD files, plus the new FacilityCenter software and customers acquired from Peregrine, should provide interesting new competition in the overall CAD/PM/FM market.

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