Microsoft Inc. (Nasdaq: MSFT) has reportedly decided to acquire Israeli cloud security company Adallom for a price believed to be in the region of $320 million. If the deal is completed at that price, then this will be Microsoft's largest-ever acquisition in Israel. Microsoft declined to comment on the report.
Adallom was founded in 2012 by CEO Adam Rappaport, Ami Luttwak, and Roy Reznik, all graduates of elite IDF technology units. The company has raised $49.5 million to date and investors include Rembrandt Fund, Sequoia Capital and Index Ventures. In April, just three months ago, Adallom raised $30 million including an investment by HP, that company's first-ever investment in an Israeli start-up.
Adallom is headquartered in Palo Alto, California with its Israel development center in Tel Aviv's Ramat Hahayal.
Adallom is striving to achieve a solution for a security problem which bothers many organizations on the seam of mobile computers such as smartphones, tablets and laptops, with apps outside the organization. In an interview with "Globes" Rappaport once said, "The protection layers for enterprise information are not relevant in a world that is becoming more and more accessible for an organization's users in remote server farmers."
To solve this, Adallom has developed a technology that provides a layer that envelopes the application and the organizational information that sits in the remote server farm, so that access to it passes via Adallom's command and control mechanism. This mechanism sends an alert in the event that anomalous use is identified that indicates the possibility that privileged use has been stolen or broken into.
The sale of Adallom to Microsoft brings it full circle because it was the Israeli company back in December 2013 that won enormous publicity when it was the first to expose the break into the security server of Microsoft Office365.
It is quite likely that Microsoft will use the acquisition to fulfill its goal of opening a cyber security center in Israel.
Over the past year Microsoft has acquired Israeli company's Aorato (also cyber security) for $200 million, Equivio (text analysis) for $200 million, and N-trig (digital pen) for several tens of millions of dollars. Its previous acquisition in Israel was 3DV Systems in 2009 for $35 million.
Over the weekend, Microsoft acquired FieldOne Systems for a reported $39 million. Based in New Jersey, the software management company was founded by Israelis Shloma Baum and Ilan Slasky.
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2015
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