Hyperion to acquire Brio for $142 million

Purchase comes on the heels of Business Objects, Crystal Decisions union

The business intelligence analytics software market is losing a second vendor in less than a week, as Hyperion Solutions  announced Wednesday a $142 million buyout of Santa Clara, California-based Brio Software. The news comes days after Business Objects announced its planned $820 million purchase of Brio competitor Crystal Decisions.

Performance management software maker Hyperion says it hopes Brio's reporting tools will help it capture customers earlier in the buying cycle. The Sunnyvale, California, company plans to integrate Brio's query and analysis technology with its own Business Performance Management Suite of planning and measurement applications.

The acquisition is slated to close in the fourth quarter of this year, pending shareholder and regulatory approvals. Until then, Hyperion will offer Brio's products to its own customers through a reselling agreement.

As the buying climate for enterprise software products remains depressed, analysts have been forecasting consolidation in the sector, with larger companies taking advantage of low valuations to snap up niche vendors. Smaller companies are also facing increased threats from larger rivals that are adding features once offered by stand-alone developers -- most notably Microsoft, which recently unveiled plans to ship by the end of this year significant extensions to its business intelligence platform.

"Chalk this up to 'the Microsoft effect,'" AMR Research analyst John Hagerty wrote in a recent research note on Business Objects' Crystal Decisions acquisition. "When a formidable competitor (Microsoft) sets its sights on the reporting sector of the broader Business Intelligence (BI) market, those affected (like Crystal Decisions) have to scramble for a defensible business strategy."

The Business Objects-Crystal Decisions deal probably contributed to Hyperion's Brio purchase. In a Tuesday report on the Crystal Decisions' buyout, Forrester Research Inc. predicted that Hyperion would end its partnership with Crystal Decisions rather than continue licensing software from direct competitor Business Objects.

Copyright © 2003 IDG Communications, Inc.

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