Business enterprise vendor Oracle Corp. renewed its strategy ofgrowth through large acquisitions on Thursday, with a $3.3 billioncash deal to buy Hyperion Solutions Corp., a leader in thefast-growth market for business performance management (BPM) andbusiness intelligence (BI) systems.

Unlike Oracle's earlier hostile takeover of rival PeopleSoft,the Hyperion acquisition–priced at $52 per share–was agreed to onfriendly terms. The move signals the wide technical gapbest-of-breed BPM vendors like Hyperion and Cognos have establishedthrough specialized financial systems for planning, budgeting andforecasting purposes over larger enterprise resource planning (ERP)vendors like Oracle and SAP AG, which have attempted to duplicatetheir technology with their own modules. “This is a good fit forOracle,” says Paul Hamerman, vice president of enterpriseapplications at Forrester Research. “They have not been successfulin the financial business performance product category. They have agood transactional platform but not for planning and consolidationapplications, and Hyperion is the market leader.” Hamermanestimates the BPM sector is growing at about 15% a year, comparedwith 6% for the ERP segment dominated by Oracle and SAP.

But the deal also highlights the threat that even largeindependent vendors are under as large ERP vendors add morefunctionality through acquisition or, in the case of SAP,partnerships. “It's getting more and more difficult to operate as astandalone, niche vendor,” says Jim Shepherd, senior vice presidentat AMR Research. “Buyers want to buy single suites and standardizearound large vendors.”

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