Services companies have accounted for the bulk of the mergers and acquisition activity in the technology sector in recent months, and that trend continued in March 2002. Few companies outside of this sector have proved bold enough to start buying again, even at today's low valuations.

A number of enterprise resource planning (ERP) vendors, however, are still on the look out for niche acquisitions to fill gaps in their product offerings. Intentia scooped up Danish e-procurement company Catalog-International, adding its Ideal Commerce suite to its portfolio of business-to-business software. Catalog, suffering from a costly expansion policy, filed for bankruptcy protection in November 2001. The Swedish enterprise application vendor did not disclose how much it paid for Catalog, but analysts suggest it was minimal.

German software giant SAP hopes to break into the small- and medium-sized enterprise (SME) market with the acquisition of Israeli start-up TopManage Financial Systems. TopManage specialises in ERP applications for SMEs. SAP wasted no time in showcasing its new application package at CeBIT, the high-tech trade show held in Germany. Shortly after, SAP was already trumpeting its customer wins.

Two US-based players in the optical telecommunications equipment sector turned to acquisitions to speed up their European expansion strategies. Test and monitoring technologies group Tektronix acquired Germany's optical testing specialist Profile Optische Systeme – a key area of growth identified by Tektronix.

Finisar, which develops fibre optic subsystems and network performance test systems, meanwhile, snapped up Munich-based AIFOtec, which develops optical subsystems for the assembly and testing of optical modules, for €2 million. CEO Jerry Rawls explained that "AIFOtec will enable us to produce optical products with higher levels of performance and lower manufacturing costs." Finisar is hiring 30 of AIFOtec's employees and is renaming the acquisition Finisar Europe.