Lawson Software Inc. last month finally shed a label it has carried for nearly a decade: takeover target.

Its $2 billion agreement to be taken private by rival Infor Global Solutions, a portfolio company of Golden Gate Capital, plucked the enterprise software developer from what was once a long list of midtier companies that cater to the various requirements of running midsized to large businesses -- enterprise resource planning, supply chain management, business intelligence. The IT industry, as Oracle Corp. chief Larry Ellison once said, has matured to the point where long-term survival will become the domain of large, diversified companies that can offer a broad range of technologies and withstand the vagaries of the industry's cyclicality. With the pending buyout of Lawson, that future is one step closer.

Hark back to 2004, when Oracle started culling the herd of midsized enterprise software companies as it launched its hostile takeover of human resources software maker PeopleSoft. During the ensuing trial, in which the U.S. Department of Justice tried to block the $10.3 billion deal, Oracle begrudgingly revealed nine potential "M&A opportunities" its board had considered in 2003. Lawson figured prominently on the list, as did PeopleSoft; BEA Systems Inc.; Sybase Inc.; Documentum Inc.; Business Objects SA; J.D. Edwards; Cerner Corp.; and SCT Corp. At the time, Ellison also mentioned Siebel Systems Inc. as being on his wish list.

Of these, only one remains independent, for now: Cerner, a maker of clinical software systems for hospitals.

All these targets operated in different segments of the enterprise software realm. PeopleSoft was a leader in human resource management offerings; Business Objects (acquired by SAP AG in 2007) provided business intelligence software. But to the big buyers in the industry -- Oracle, SAP, IBM Corp. -- they all make up critical pieces of a broad business software portfolio.

In the shrinking pool of medium-sized fish that still ply the waters of business software, two of the remaining ones have for months, if not years, been considered takeover targets: BMC Software Inc., which offers technology for managing mainframe and distributed computing environments, and Informatica Corp., which specializes in data management.

This past fall, BMC reportedly drew the interest of private equity firms, which were attracted to the company's healthy cash flow. It is also considered a potential target for Hewlett-Packard Co., which is trying to boost its enterprise software offerings and could benefit from adding BMC to its portfolio.

Informatica has been striking its own software deals, including its largest, a $130 million purchase last year of data management company Siperian Inc. While the company has been bulking up, its dealmaking also has raised its profile as a potential acquisition for the likes of Oracle or IBM, and it is consistently viewed as a target.

Helping both BMC and Informatica hold on to their independence are their high valuations. Since last summer, shares of BMC have been on a steady climb, rising 44% to a recent $50.11. The $9 billion market cap company would be a big bite for even the largest buyers. Informatica's shares have been on a similar skyward climb.

"Most of the enterprise software segment is very expensive right now," comments Morningstar Inc. analyst Rafael Garcia. "I don't know who will be willing to go out and make acquisitions at these values."

Lawson was an exception. Infor offered an unsolicited $11.25 per share back in March, a price that amounts to a "take-under" of the enterprise resource planning software developer. Lawson agreed to the offer on April 26.

It's not particularly surprising, as Infor's new chief comes straight from the management ranks of Oracle, known as one of the craftiest, thriftiest and active consolidators in enterprise software. Chuck Phillips, a former Oracle president and Ellison lieutenant, took Infor's reins of in October.

Cerner, the remaining company on Ellison's famous list, is more like BMC and Informatica than Lawson, valuationwise. The $10.2 billion market cap company's management recently said it is looking for acquisitions with the nearly $1 billion in cash on its balance sheet, and its shares last month hit an all-time high of $124.75, thanks in part to a strong first-quarter earnings report.

"Cerner is way, way overvalued at this point," Garcia says.

That said, Oracle has been building its own healthcare software offerings, with acquisitions including the $685 million purchase last year of Phase Forward Inc. Cerner would likely make a nice addition to that vertical market.

While the industry has changed a lot since 2003, it's a good bet that the lone holdout from Ellison's old wish list might still be on his latest one.

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