The deal, the terms of which remain undisclosed, fused two minor rivals into a competitor in a market expected to grow to some $2.6 billion by 2006, according to market researcher IDC.
"There is a consolidation happening in the marketplace right now," IDC analyst Allan Carey said, pointing out that this is RedSiren's fourth acquisition in the past year. Other purchases include SRI's network-services think tank, AtomicTangerine, and Kansas-based network management company Secure Network Group.
The latest deal adds another serious competitor to a list that already includes boutique firms such as Counterpane Internet Security and Ubizen, which have around 100 employees each, and giants such as IBM and EDS, which also offer security services.
"I think there is (room) for both sides to play in the marketing place," Carey said. "Right now there is enough demand to support the specialized expertise of the smaller security firms and the generalized expertise of the larger firms."
RedSiren's vice president of sales and marketing, Al Leary, said the deal adds better coverage for the business in North America, expands the company's client base, adds skilled professionals and even garners some key technology for the Pittsburgh-based company.
"From time to time we do compete with the IBMs and the EDSes," Leary said. "But our focus is being a security company, so our knowledge is very deep."
Although the deal has quickly put the company in the same pond as the big fish, RedSiren will have to get its new businesses working together to actually be able to compete, said John O'Keefe, an analyst for Sterling, Va.-based research firm Current Analysis.
"They have several integration issues to work with," O'Keefe said. "They can't suffer from the field of dreams mentality (and) expect that people will come just because they have built their services."