Microsoft Reportedly Buys Israeli Cloud Security Firm for $320M
An Israeli startup focused on cloud application security is reportedly the next addition to Microsoft ever-expanding stable of acquisitions. Adallom, which is headquartered in Palo Alto and has a research-and-development facility based in Tel Aviv, has been acquired by Microsoft for $320 million in cash, according to news reports.
If confirmed, the acquisition -- reported by Israeli financial publications Globes and The Calcalist -- would be Microsoft's largest to date in Israel. However, it's hardly the first: in just the past nine months Redmond has purchased three other Israeli tech firms.
Founded in 2012 with $4.5 million in Series A funding led by Sequoia Capital, Adallom is led by three veterans of the Israeli Intelligence Corps: co-founders Assaf Rappaport (pictured above), who is CEO; Ami Luttwak, CTO; and Roy Reznik, vice president of research and development. The company's technology provides security for enterprises that use cloud-based, software-as-a-service (SaaS) applications for CRM, ERP, collaboration, storage and other tasks.
A 'Cloud Access Security Broker'
We reached out to Microsoft and Adallom for confirmation of the pending acquisition. We did not receive a response from Adallom, and a Microsoft spokesperson declined comment.
Adallom has said its solutions are designed to help enterprises "secure data in any cloud." The company has described itself as a "cloud access security broker" for businesses using services from Salesforce, Dropbox, Box, Office 365 and other SaaS and IaaS (infrastructure-as-a-service) application providers.
In December 2013, the company revealed it had discovered a severe vulnerability in Microsoft Office 365 that posed a risk for users of Office 2013 Desktop. First observed in April of that year, the vulnerability was described by Adallom chief software architect Noam Liran as "a bona fide perfect crime; a crime where the victim doesn't know that he’s been hit; a crime where there's no proof of any foul play anywhere; a crime where protecting yourself against it without being familiar with its modus operandi is next to impossible."
After discovering the vulnerability, Adallom notified the Microsoft Security Response Center and worked with the company to find ways to eliminate the problem. Microsoft later released a patch that resolved the issue.
Other Acquisitions for Digital Ink, Security
Since November, Microsoft has acquired three other Israel-based tech firms. They include Aorato, purchased in November; Equivio, acquired in January; and N-trig, bought in February. Purchase prices for the acquisitions haven't been confirmed, although reports indicate that N-trig was purchased for somewhere between $30 million and $200 million.
N-trig developed the Surface Pen stylus technology used with Microsoft's Surface Pro devices. The technology is expected to see even wider use with the coming release of Edge, Microsoft's successor to the Internet Explorer browser, which adds new capabilities for "digital ink" applications.
Equivio, which specializes in machine learning technologies, was acquired to enable Microsoft to "help our customers tackle the legal and compliance challenges inherent in managing large quantities of e-mail and documents," according to company blog post in January. The addition of Aorato was aimed at helping Microsoft provide customers with identity and access security solutions that work across both on-premises and cloud-based applications.