Speculation is mounting about imminent consolidation in the business intelligence (BI) software market after US financial news weekly Barrons reported that BI giant Business Objects is starting to look like a takeover target.

The speculation was prompted when the vendor's stock plunged 22 percent after it revealed it would not meet analyst's expectations for its second quarter.

With large infrastructure vendors such as IBM, Microsoft, Oracle and SAP all moving into the BI market and increasing the competitive pressure on incumbent vendors such as Business Objects, Cognos, SAS and Hyperion, analysts say consolidation is increasingly likely.

Business Objects' rival Cognos has been the subject of similar speculation by industry watchers since share price dropped earlier this year following its failure to file results in line with Nasdaq requirements.

Speaking before the reports about Business Objects, John Hagerty of AMR Research said the BI market was ripe for consolidation. "There are several large vendors out there now and the market is hot," he said. "It is not clear who will buy who first, but I'd expect consolidation to start in the next six to 12 months and when someone makes the move it will kick off other deals."

Both Business Objects and Cognos declined to comment on the speculation.