Business intelligence software providers Cognos Inc., Informatica Corp. and Business Objects SA are all potential acquisition targets, write Sasa Zorovic and Mindy Isenstein of the Goldman Sachs Group, in a comprehensive software report published this week. Why? Because growth has slowed for these three companies, with top-line growth likely to remain in the low double-digits for the remainder of this decade, and the sector continues to consolidate.

Likely buyers include U.S. technology giants IBM Corp., Microsoft Corp., Oracle Corp., as well as Germany's SAP AG, all of which have business intelligence offerings. Goldman Sachs identifies IBM as a likely buyer for Cognos, given the fact that Janet Perna, the former head of IBM data management software, is on the Cognos board. IBM has already acquired Informatica's main rival, Ascential Software Corp. In June SAP purchased the smaller OutlookSoft Corp. for undisclosed terms. Oracle could be a wild card. It snapped up BI provider Hyperion Solutions Corp. for $3.3 billion in May, and it has enough on its plate—although with hungry Larry Ellison at the helm, who knows?

Although the sector is consolidating, the importance of BI software remains strong. BI software now tops the "shopping list" of IT managers, surpassing security as the top software priority over the last two years. —Cheryl Meyer

See March 1 story from TheDeal.com
See June 4 brief from TheDeal.com
See May 3, 2005, story from TheDeal.com