The consolidation of the business intelligence (BI) and business performance management (BPM) software markets continued today after Business Objects announced plans to acquire former rival and BPM specialist Cartesis.

Business Objects said that the €225m deal - which is expected to close within the next 90 days, subject to regulatory and shareholder approval - would extend the vendor's ability to offer a full reporting platform providing integrated BI and BPM functionality.

The company added that Cartesis' focus on the finance department would also add new governance, risk and compliance management functionality, as well as better support for US and international financial reporting standards, to its existing performance management products.

John Schwarz, chief executive of Business Objects, said in a statement that the acquisition of Cartesis would increase the vendor's appeal to chief financial officers (CFO). "The acquisition of Cartesis will allow us to extend our comprehensive solutions for the office of the CFO by providing critical, cross-application and cross-database line of sight to financial and management reporting, including consolidated statements and budgeting," he added.

The deal is the latest move in Business Object's long-standing strategy to develop a portfolio of applications that integrate BI reporting tools with more sophisticated analytics and performance management functionality.

In 2005 Business Objects acquired budgeting and planning software vendor SRC Software and late last year pushed further into the performance management space with the acquisition of activity-based costing and profitability management specialist ALG Software.

At the time, the ALG deal prompted criticism from Cartesis, with chief marketing officer Crispin Read claiming that Business Objects would find it tough to integrate ALG’s and SRC's software into a genuine BPM platform.

However, the erstwhile rivals appear to have put their differences aside and are predicting few integration problems between their own portfolios, insisting that their BPM platform strategies are "completely aligned".

Didier Benchimol, chief executive of Cartesis, will lead the integration project alongside Business Objects' general manager of Global Services and enterprise performance management, Mark Doll. Benchimol argued that there was little overlap between the two vendors' software. "Cartesis' core competency is high-end financial management," he said. "Our domain expertise and robust standards-based offering will complement the already strong presence that Business Objects has in performance management."

Helena Schwenk of analysts Ovum agreed that there was limited overlap between the two portfolios. "At first glance you'd say there was overlap between Cartesis and the technology Business Objects acquired from SRC," she said. " However, they are trying to address different markets with SRC focused on the midmarket and Cartesis aimed more at the enterprise finance office – it is not an area where Business Objects has had a presence and this will give them a serious BPM play."

But Schwenk also warned that despite Business Objects' strong record of integrating acquired firms there would still be some obstacles to overcome in tying together its various acquired portfolios. "There is not a huge amount of overlap [between the portfolios] but there is some and I'd predict they will need to rationalise some products," she said. "Anything Cartesis has in the area of analytics or BI, there is a high chance that it will be scaled back."

Coming just days after Oracle completed its acquisition of BI specialist Hyperion, the deal will also spark speculation that further consolidation of the BI market is now inevitable as specialist BI vendors seek to expand their portfolios and larger business application vendors look for a route into the fast growing market.

Alys Woodward of analysts IDC said that the Business Objects' acquisition should strengthen the company's position in this consolidating market. "With Oracle having just bought Hyperion, there could be a psychological angle to [the Business Objects' deal]," she said. "Rather than waiting around and listening to speculation about their future this is a way of Business Objects saying 'we're a big player'."