The fish are jumping in the IT security industry. In recent months, the sector has seen several billion-dollar buyout deals. That has created a feeding frenzy among would-be acquisition targets, roiling the industry’s waters. In June, storage giant EMC announced a $2.1 billion megamerger with RSA Security. “Security has gone from a ‘nice to have’ to a ‘must have,’ and corporate board rooms across America are spending millions to solve the problem,” said Peter Kuper, an analyst at Morgan Stanley. Driving the changes, in part, are new regulatory compliance issues and a desire by customers to deal with fewer vendors, investment bankers and analysts say. In addition, system management and networking companies are active buyers of this technology, as they seek to embed security into their systems or applications. “The consolidation is happening now, but security will remain in silos until there is full integration of products, and that will take some time,” said Ranjini Chandirakanthan, an analyst at ThinkEquity Partners. Hot sectors Security sectors that have particularly caught buyers’ eyes include companies that prevent data leakage, as well as those that tackle identity theft, Chandirakanthan noted. Encryption technology, intrusion prevention systems, electronic data security and compliance driven applications are also gaining attention from prospective buyers, said Ian MacLeod, managing director of investment banking for Goldman Sachs.