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July/August 2011

Information security market consolidation: A mixed bag

In the middle of the last decade, SPI Dynamics was among the darlings of the security startup world. They had cool technology in a burgeoning segment of the security industry. The company’s profile was growing from modest beginnings (16 people, including three co-founders and a handful of engineers in an office behind a strip club near Georgia Tech University) to eventually to more than 150. Investors loved the little Web app security company that could. Four rounds of funding helped the company’s engineers develop products such as Web app pen-testing tool WebInspect, which were solving real-world security dilemmas. Revenue was doubling, literally, every quarter. The good times were rolling; the company still maintained that informal, startup feel  too, and innovation was still the priority despite the increasing focus on business and shareholder satisfaction. “We were going through growing pains adjusting to being a bigger company and culture; it was crazy during our peak,” says Caleb Sima, one of the co-founders. Sima saw the ...

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