Oracle Lives Larger

And even as they said they were busy consolidating earlier acquisitions, Oracle CEO Larry Ellison and Phillips always left themselves a bit of wiggle room when the subject of major M&A arose.

One area of concern: Oracle has a lot on its plate. Not only does it have the usual tasks of integrating yet another new acquisition, it must also find a way to blend Hyperion's applications into its new fusion middleware platform.

But for now, most of Wall Street is giving Ellison & Co. the benefit of the doubt.

For investors in other software companies, the move raises a number of interesting, albeit complex, possibilities. On the one hand, Vesset and other analysts say Business Objects and Cognos are more likely to come in play as the position of pure-play business intelligence vendors becomes less and less tenable.

Potential buyers include IBM(IBM) which was rumored to be in the running to buy Hyperion, according to Trip Chowdhry, managing director of Global Equities Research. Other candidates are Microsoft(MSFT), which has strengthened its business intelligences offerings, SAP, and Hewlett-Packard (HPQ).

But with Oracle out of the picture as predator, a takeover may be less likely. Cowen analyst Peter Goldmacher says the earlier rumors have pushed Cognos and Business Objects to a higher multiple than they deserve. Instead of trading at about 20 times earnings, the momentum "will likely dissipate and they will likely trend back down towards a more normal 15x EPS growth rate."

As if to mirror the contradictory possibilities, shares of Cognos rose 3% to $39.24 while Business Objects slipped 2.5% to $35.21.

A third possibility is also worth watching: Last month, NCR(NCR) announced plans to split itself into two companies by spinning off its Teradata data warehousing business.

And since H-P has been rapidly strengthening its software business, and CEO Mark Hurd used to head NCR, the potential match looks very interesting.

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