SAP, the mammoth German software maker, has agreed to acquire business intelligence vendor Business Objects S.A. for around €4.8 billion (that’s around $6.7 billion U.S., assuming the dollar didn’t dip even further against the Euro today.)

SAP intends to integrate Business Objects BI software into its own ERP offerings, the company said in a statement, helping companies make sense of the often vast amounts of data they collect on customers, partners and themselves.

The acquisition is just the latest development in a booming, though quickly consolidating, business intelligence market. IDC reported that the worldwide market for business intelligence software grew by nearly 12% in 2006 to $6.25 billion, and Business Objects rival Cognos is a likely next acquisition for some big-name vendor.

During a conference call on Monday, Business Objects CEO John Schwarz said the merger makes strategic sense, helping the combined companies increase sales to the SMB market, according to CMP Channel. Each company has nearly 3,000 channel partners that do business with SMB customers, CMP Channel reported Schwartz as saying.

SAP has been courting the SMB market lately, most recently with the launch of SAP Business ByDesign, a full suite of business applications delivered through the SaaS model, as Shamus told you about last month. SAP expects to win 10,000 customers for Business ByDesign by 2010, according to Computerworld. With the acquisition of Business Objects, SAP hopes to add even more SMBs to that total.