As I mentioned yesterday in BloggingStocks.com, Oracle's (NASDAQ: ORCL) $3.3 billion deal for Hyperion Solutions (NASDAQ: HYSL) is at a reasonable valuation. It also is a way for Oracle to slap SAP (NYSE: SAP).

But are there problems with the deal?

Hyperion's focus is on performance management. This helps companies manage, monitor and analyze performance across all business segments, such as marketing, HR, finance and so on. Such things are important in light of the heavy compliance requirements of corporate America. It also helps companies deal with competitors.

In fact, IDC projects growth in this market at about 12-14% per year.

Well, I had a chance to interview Ben Plummer, who is the vice president of worldwide marketing of Applix (NASDAQ: APLX). His company is also a provider of performance management software.

His take: "We are not surprised by this acquisition. While it validates a change in the market, we also know that the software buyers are very savvy about the business analytics market, and are not impressed with having a one-stop shop for all their enterprise solutions: they see the effects of a vendor acquiring just parts of the puzzle. And many prefer the best-of-breed, pure play providers who have grown up in this space."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MOST NOTEWORTHY: Today's more notable downgrades included Dell Inc (DELL), Deutsche Telekom ADS (DT) and the Nasdaq Stock Market Inc (NDAQ):

• Needham downgraded Dell inc (NASDAQ: DELL) to Hold from Buy after the Q4 results as they now believe the company is unlikely to outperform for "at least" several quarters. They considered Dell's notebook shipments to be the biggest disappointment in the quarter.

• Deutsche Telecom ADS (NYSE: DT) was cut to Sell from Neutral at Merrill Lynch.

• JP Morgan downgraded the Nasdaq Stock Market Inc (NASDAQ: NDAQ) to Neutral from Overweight following the company's price cuts as they feel the new prices negatively impact the U.S. cash equity business.

OTHER DOWNGRADES:

• Baird cut Xerium Technologies Inc (NYSE: XRM) to Underperform from Neutral, citing increased spending plans and pressure from the underlying paper market that raised dividend sustainability concerns.

• First Albany downgraded Hyperion Solutions Corp (NASDAQ: HYSL) to Neutral from Buy.
  

• Sanders Morris cut Crosstex Energy (NASDAQ: XTEX) to Hold from Buy. Raymond James downgraded shares of Crosstex to Market Perform from Outpeform.

• Bernstein downgraded TXU Corp (NYSE: TXU) to Market Perform from Outperform as the firm believe the current bid from Kohlberg Kravis Roberts and Texas Pacific Group will succeed.

• Merrill Lynch cut Altera Corp (NASDAQ: ALTR) to Neutral from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

As Tom Taulli wrote earlier, Oracle Corp. (NASDAQ:ORCL) announced its intention to buy Hyperion Solutions Corp. (NASDAQ:HYSL) for $3.3 billion this morning. This will of course trigger speculation that the other two key players in the business intelligence space will go the same route. The players are French-based Business Objects (NASDAQ:BOBJ) and Canada-based Cognos Inc. (NASDAQ:COGN). The bottom line is that all three companies have been in play and facing buy-out rumors for the last three years. The only problem was they could not capture an enhanced valuation until they demonstrated real growth -- top and bottom line.

But what does this signal for Oracle? Oracle is the undisputed worldwide leader in database products. All competitors in the database field are dwarfed by Oracle. The operating margins for Oracle in pure database sales is north of 40%.

However, two problems have emerged for the company these past 4-5 years: 1) Its internally developed applications software has been a disaster, forcing Oracle to purchase Seibel Systems and PeopleSoft. 2) Database margins are being scrutinized by the customer base.

Oracle's (NASDAQ:ORCL) M&A machine has been quiet lately.

Well, that ended today. The company announced it will buy Hyperion Solutions (NASDAQ:HYSL) for $3.3 billion in cash. The offer price is $52 per share, which is a 21% premium.

Hyperion develops so-called business performance management software. That is, it helps businesses collect, analyze, and share data. Apparently, it's a business that's getting lots of traction.

Interestingly enough, in the press release, Oracle indicated that this deal is a way to put even more pressure on its arch rival, SAP (NYSE: SAP).

And, I think it will. After all, a good amount of Hyperion's customers are actually SAP customers.

Also, it looks like Oracle is getting a pretty good valuation – at about 2.4X revenues.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Oracle Corporation (NASDAQ: ORCL) has agreed to acquire Hyperion Solutions Corporation (NASDAQ: HYSL) for $52 per share.
• The Wall Street Journal reported, citing people familiar with the matter, that Blockbuster Inc (NYSE: BBI) is in advanced talks to acquire Movielink LLC, an online movie-downloading company owned by major Hollywood studios.
• Also reported in the Wall Street Journal, McDonald's Corporation (NYSE: MCD) is moving closer to adding lattes and cappuccinos to its menu, a move that would be a direct shot at Starbucks Corporation (NASDAQ: SBUX).
• According to the Financial Times (subscription required), DirecTV Group Inc (NYSE: DTV) is considering ways to bundle high speed internet access to its 15 million satellite television customers.
• The Financial Times reported that private equity is "hovering" over Home Depot Inc's (NYSE: HD) wholesale supply business, which could fetch $11B in a sale.

OTHER PAPERS:

• The Detroit News reported that Ford Motor Company (NYSE: F) won a court order forcing diesel engine supplier Navistar to resume shipments to Ford's Louisville plant.
• Investor's Business Daily's "New America" column highlighted bank and broker SWS Group (NYSE: SWS).