While the overall value of mergers and acquisitions in the tech sector will likely decline this year, this week illustrates how strategic, and sometimes smaller, deals are still important for the sector, as BMC, SAP, Fortinet and Microsoft announced deals.

This year has seen its share of big deals as well. Some of the bigger and more interesting deals include: Hewlett-Packard buying computer services firm EDS for US$13.9 billion, Sprint and Clearwire forming a joint venture worth $14.5 billion, Verizon Wireless' $28 billion acquisition of Alltel and CBS' $1.8 billion buy of online media company CNET Networks.

Most observers expect M&A activity to decline this year as financial-market turmoil puts a damper on tech buyouts from private equity firms. Private equity acquisitions in 2007, when cash was easy to borrow, amounted to a record, which in turn boosted overall tech sector M&A to an annual record. In the first quarter of this year, however, M&A activity slumped compared to last year, to $92 billion in total value from $100 billion, according to The 451 Group. But most of that drop was due to a decline in acquisitions from leveraged buyout groups.

Problems in the financial markets, though, are not deterring tech companies themselves from acquisitions. Despite economic turmoil due to the mortgage crisis and energy costs, bellwether IT vendors have stayed profitable. Intel, Apple, Google, AT&T and IBM, among others, posted better-than-expected, and in some cases record, first-quarter earnings.

Meanwhile, acquisitions can be an efficient way for a vendor to quickly get up to speed in new technology, or expand market reach.

For example, BMC is plugging a gap in its portfolio with its acquisition of ITM Software. ITM's suite of products includes applications that focus on business-related aspects of IT operations, including financial resource management, vendor relationship management and staffing. These relate to the "soft skills" that are much sought-after in the higher echelons of IT management.

SAP's announcement that it would buy Visiprise, a vendor of software managing manufacturing-plant operations, is seen as an attempt to extend its business intelligence and planning products for manufacturers.

Fortinet's acquisition of IPLocks, signed last week but announced this week, gives Fortinet a portfolio of database security and auditing applications. Fortinet already offers database protection tools, but the IPLocks products offer a chance to fine-tune application database security management.

The IDG News Service is a Network World affiliate.