The on-demand security sector is becoming increasingly crowded, so be prepared for the next step: consolidation. On Tuesday Goldman Sachs Group Inc.’s private equity arm invested $50 million in Perimeter eSecurity Inc., a provider of online software used to protect corporate computer networks. The company has been profitable since late 2001, and it has made nine acquisitions thus far, with more deals on the horizon, according to company CEO Brad Miller. Of course, Perimeter is a small fish in a big pond. Security giant Symantec Corp. has its own software-as-a-service offering, which it launched in beta form in April, and McAfee Inc. has it's Foundstone On-Demand Service, which was developed out of its 2004 acquisition of Foundstone Inc. What's more, on Monday Trend Micro Inc. launched its SecureCloud software-as-a-service security platform for partners. Another on-demand security software startup, Symantec spinoff Veracode Inc., raised $19.5 million in venture capital funding in January from Atlas Venture, Polaris Venture Partners and Boston's .406 Ventures. That company develops an automated, on-demand security technology that analyzes software using binary code to find vulnerabilities in applications before hackers can exploit them. Consolidation is bound to occur as demand for Web-based security technology continues to grow. Not surprisingly, Google Inc. is one of the consolidators: It announced July 9 that it would acquire Postini Inc., which also specializes in on-demand security products, for $625 million. —Cheryl Meyer

See July 31 news release from Perimeter eSecurity
See April 17 news release from Symantec Corp.
See Aug. 16, 2004, story from TheDeal.com
See July 30 story from CRN.com
See Jan. 22 story from TheDeal.com
See July 10 story from TheDeal.com

Tags: vc, venture+capital