Speculation is mounting that Oracle could be preparing a bid for business intelligence (BI) software specialist Business Objects, a company it has name checked in the past as a possible acquisition target.

According to reports from news agency Reuters, Business Objects shares climbed late last week amidst rumours that Oracle is set to renew its interest in acquiring the vendor.

Both companies declined to comment on the speculation, which emerged as Oracle today released the latest version of its own BI suite.

Ian Charlesworth of analyst firm Ovum said that any deal would make sense from a technological point of view. "BI is no longer seen as solely the domain of power users," he said. "It is now used much closer to the operational side of the business and is increasingly being embedded in business applications [such as Oracle's]. In that light, these reports are not surprising."

The news is the latest in a line of reports surrounding possible consolidation in the BI market, with IBM having long been rumoured to be interested in BI specialist Cognos, and HP also mooted as having a desire to expand its presence in the market.

"We've been here numerous times before with Business Objects, Cognos and Hyperion," said Charlesworth. "Oracle, IBM and the other large vendors have invested in BI, but the investments the specialists have made in the front-end of their apps mean they are above them at the moment. They do stick out as attractive targets."

He added that any deal between Oracle and Business Objects would likely spark a domino effect leading to wider consolidation in the market. "If one goes from Business Objects, Cognos or Hyperion it won’t be long before the others follow, " he predicted.