Business enterprise vendor Oracle Corp. renewed its strategy of growth through large acquisitions late last week, with a $3.3 billion cash deal to buy Hyperion Solutions Corp., a leader in the fast-growth market for business performance management (BPM) and business intelligence (BI) systems.

Unlike Oracle's earlier hostile takeover of rival PeopleSoft, the Hyperion acquisition–priced at $52 per share–was agreed to on friendly terms. The move signaled the wide technical gap best-of-breed BPM vendors like Hyperion and Cognos have established through specialized financial systems for planning, budgeting and forecasting purposes over larger enterprise resource planning (ERP) vendors like Oracle and SAP AG, which have attempted to duplicate their technology with their own modules. “This is a good fit for Oracle,” says Paul Hamerman, vice president of enterprise applications at Forrester Research. “They have not been successful in the financial business performance product category. They have a good transactional platform but not for planning and consolidation applications, and Hyperion is the market leader.” Hamerman estimates the BPM sector is growing at about 15% a year, compared with 6% for the ERP segment dominated by Oracle and SAP.

But the deal also highlights the threat that even large independent vendors are under as large ERP vendors add more functionality through acquisition or, in the case of SAP, partnerships. “It's getting more and more difficult to operate as a standalone, niche vendor,” says Jim Shepherd, senior vice president at AMR Research. “Buyers want to buy single suites and standardize around large vendors.”