Security Software IPOs: Where'd They Go?

"It's kind of hard for a smaller guy to build up and compete against these broadly diversified companies," Allen says.

In addition, smaller security software makers considering an IPO also face the uphill battle of building a significant brand name. "Over time, it's hard to get the market share required to be successful," Salem says. "While we had a good brand, it doesn't compare to the big security companies."

Meanwhile, the market of publicly-owned security is consolidating, a trend that observers expect to continue. It mirrors a similar development with its enterprise customers, who are consolidating the number of vendors they work with to manage security.

Security is now receiving a larger chunk of technology budgets and receiving more scrutiny from management, IRG's Christy says. Executives want to improve cost efficiency and are choosing a smaller number of vendors over time.

That's a change from several years ago, when it was common for companies to use one antivirus vendor for desktops and a different one for servers, for instance. Christy says firms are finding that "maybe the differentiation we get is not as great as we hoped for (and) the cost of multiple vendors is not justified."

Still, some have taken those IPO-free years building more mature companies that will perhaps take the path of a public bid.

Companies in the messaging, intrusion prevention and unified threat-management space are areas where companies are approaching more than $100 million in sales, according to Asheem Chandna, a principal at Greylock Partners.

"It's a high-risk environment and you have to be a broader-focused [company]. You can't go out as a one-trick pony," says Craig Collins, chief financial officer with IronPort Systems, a private company that "definitely" plans to go public. "We're building a quality company, and we're going to have a quality infrastructure before we're in a position where we're going to file."