Verisign Inc.'s acquisition of Guardent Inc. last week not only brought together the two strongest managed security services providers, but it may also spark a new wave of consolidation and innovation in the MSSP sector as the remaining players scramble to hold customers.

In the wake of the $140 million VeriSign deal, companies such as Counterpane Internet Security Inc., RedSiren Inc., NetSec Inc. and TruSecure Corp. are looking for ways to remain competitive, even as they consider whether the time is right for a merger of their own.

"I think there will definitely be more consolidation as time goes by. It's a good indication of the interest in and value of this space," said Glen Hazard, CEO and chairman of NetSec, based in Herndon, Va. "There aren't that many sizable players left in this space, but the companies that are left have held their value because their investors have invested for the long haul and didn't panic."

Hazard said he is not actively looking for a buyer for NetSec and, in fact, may be in the market for acquisitions in the coming year. The company is also planning to add several new capabilities to its services portfolio in February and will launch a new product later in the year.

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• News: VeriSign acquires security service provider (18 December 2003)