Consolidation buffets BI market.

• Author: Marshall, Jeffrey
• Position: Business intelligence

In mid-summer, when a lot of software executives were walking the beach or working on their golf games, Hyperion Solutions announced it was buying a longtime technology partner, Brio Software.

The $142 million deal provided more evidence that in the business intelligence (BI) and business performance management (BPM) space, there's little time for relaxation. A long-predicted consolidation has started to sweep through the industry, which has long been divided among a group of very large and smaller--sometimes much smaller--players serving mostly mid-sized to multinational corporations.

The opening salvo in the shakeout was sounded in January, when Cognos acquired longtime rival Adaytum.

Since then, at least half a dozen deals have been announced, and more are certainly coming. Among the other significant deals made public to date:

* Business Objects SA is acquiring Crystal Decisions

* EAC is acquiring Comshare

* Actuate has acquired Nimble Technologies

* Ascential Software is buying Mercator Software

The consolidation has major ramifications for finance executives. BI and BPM (sometimes dubbed "CPM" for corporate performance management) systems--with their ability to tie together disparate groups and create a unified view of key numbers, then facilitate analysis of that data--have become increasingly widespread and valued in recent years. The onset of Sarbanes-Oxley rules, with their focus on internal controls and attestations, only promises to boost that value.

"From a macroeconomic basis, some of the activity seems to have a lot to do with the state of the economy and the lack of visibility into corporate earnings. That has raised the visibility of business analytics and performance to a much higher level," says Tom Malone, president and CEO of SRC Software, a CPM software firm based in Portland, Ore. "And that demand is causing every software company in any way related to the space to put up their antennae and [look to] large enterprises, whose needs have changed.

"When you get closer to the software space we're in, clients cannot be comfortable with looking at historical data through existing tools," Malone adds. "We're working in an environment where boards are no longer satisfied with an annual forecast. They're asking for a quarterly analysis that can model multiple scenarios ... CEOs are working in an era where plausible denial is dead ."

Market watchers say that Microsoft Corp. and database and enterprise resource planning (ERP)...