While the major security software stocks have been relatively calm lately, Internet Security Systems ( ISSX) has pitched up and down in a wave of volatility over the past week. Speculation that the company could be a takeover target sent its stock soaring early last week but a Thursday downgrade tempered some of the company's gains. Shares climbed nearly 20% from last Monday through Wednesday, then plunged down about 8% on Thursday. On Friday, the stock closed down 14 cents to $20.95. Of course, consolidation in this sector is nothing new. "We've seen a lot of activity in the security space recently," says Andrew Jaquith, an industry analyst with the Yankee Group. "I guess summer is deal time." In the latest significant transaction, EMC ( EMC) said it would purchase RSA Security ( RSAS) in a $2.1 billion deal . "More and more, you're seeing the major enterprise vendors looking at security pure-play vendors," says Horacio Zambrano, an analyst with Wedbush Morgan. "Security is becoming more important in infrastructure generally." He says Wall Street has speculated that IBM ( IBM) might be interested in purchasing ISS's managed security systems division -- and the scenario makes some sense. "IBM is a close partner of ISS," Zambrano says. "It's one of its top partners in the systems integration area." He could see Big Blue interested in integrating ISS's managed security systems into its IT outsourcing offerings. Zambrano's firm does not have any ownership of ISS shares and does not do banking with the company. "On the managed services side, ISS has done a pretty good job," Jaquith agrees. "It's one of the quieter parts of its business. In the case of IBM, ISS would fit well with its outsourcing work." But a deal for all of ISS could also make sense for some companies, he says, including Microsoft ( MSFT) and CA ( CA).