Microsoft Corporation (MSFT) Buys Adallom To Make Cloud Security Work

Microsoft Corporation acquired Israel-based cloud security firm Adallom for around $320m. If the deal, as well as the price point holds true, then it will be the largest buy from the US firm in Israel till date, says a report from Globes.


Cyber security center in Israel

With Adallom, Microsoft is looking to find a solution for the security problem, which is a concern for many firms in the wake of rising use of phones, tablets and laptops. The tech firm is expected to open a full-fledged cyber security center in Israel after the acquisition of Adallom, says the report.


Adallom was set up in 2012 by CEO Adam Rappaport, Ami Luttwak and Roy Reznik. The firm raised $49.5m in capital till date, and got funding from the investors such as Rembrandt Fund, Sequoia Capital and Index Ventures.

Three months ago, the firm raised $30m including an investment by HP, making it its first ever investment in an Israel-based start-up. Adallom has set its headquarter California with its Israel development center in Tel Aviv’s Ramat Hahayal.

Rappaport, in a past interview, said that the protection layer for the enterprise information is not safe as it can be accessed by users in remote server farmers. In order to address this concern, Adallom came up with a solution that offers a layer securing the application and the info stored in the remote server.

An alert is sent in case of a security breach or when an inconsistent use is identified. Back in December 2013, Adallom gained popularity after it exposed the loophole in the security server of Microsoft 365. The firm has a headcount of 80 with 50 at its development center in Ramat.

Microsoft fond of Israeli Start-ups

Microsoft has been buying up many firms in the cloud tech world in recent months in order to bolster a business it it currently in second in. Amazon.com Inc. is the clear leader in the cloud space and Microsoft is trying to bolster its patent and tech portfolio as it fights with that firm for business.

Microsoft announced that it bought FieldOne last week. The firm makes software that allows organizations to securely and easily send the right info to those working in the field.

Microsoft’s constant spending in the world of enterprise software and the cloud exist in grave contrast to recent moves in the firm’s hardware business. The firm has begun laying off most of the remaining staff it took on with its buyout of Nokia.

In its earnings report, which is due after the market closes on Tuesday, the firm will record a $7.6bn loss on the write-down of that business after a failure to pick up new business drove the value of the segment below zero.

On Friday, Microsoft shares closed down 0.13% at $46.62, and year to date the stock is down just 1% while in the last one year, it is up over 4%. The stock has a 52-week low of $40.12 and a 52-week high of $50.04.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.


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