Microsoft Buys Adellon To Boost Cloud Security

  • Microsoft has acquired Israeli cloud security company company Adallom for $250 million.
  • In November, Microsoft acquired Aorato, another Israel-based cyber-security company, for $200 million.
  • Microsoft is betting big on cloud computing for the enterprise and wants to offer world-class security to large business clients.
  • It seems likely that Microsoft's initiative to persuade late adopters to migrate to the cloud will be successful, and Microsoft's stock will soar as a result.

Microsoft (NASDAQ:MSFT) has acquired Israeli cloud security company Adallom. Bloomberg Business reports that Microsoft paid $250 million, according to a person familiar with the agreement who asked not to be named because the acquisition price hasn't been disclosed officially. The Wall Street Journal reported in July that the purchase price would be about $320 million.

"I’m pleased to announce today that Microsoft has acquired Adallom, an innovator in cloud security and a leader in helping customers protect their critical assets across cloud applications," said Takeshi Numoto, Microsoft corporate Vice President for Cloud and Enterprise Marketing. "This acquisition is the latest example of Microsoft’s commitment to delivering innovative identity and security capabilities to our customers, across both on-premises and multiple clouds."

Microsoft is betting big on cloud computing and cloud services for the enterprise. "We're creating technology that becomes essential but invisible, to help you build something amazing - whether you need on-demand scalability, technology to connect your people, or real-time data insights," states the Microsoft Cloud website. "The Microsoft Cloud is designed to empower your business, so you can do more and achieve more."

Cloud computing frees enterprises from having to maintain in-house data centers with large processing facilities and staff, and provides them with redundancy, backups and scalability on demand, but security is often considered as a concern. With the acquisition of Adallom, Microsoft wants to boost the security of its cloud and ensure large business customers that their data and processes in the cloud will be protected by a world-class IT security team and infrastructure.

Adallom, headquartered in Palo Alto with R&D facilities in Tel Aviv, is focused on enhancing data security as enterprise data and processes migrate to the cloud. The company raised $50 million in funding from Sequoia Capital, Index Ventures, EMC, and Hewlett-Packard, and employs about 90 persons worldwide. "We can help you prevent modern attacks, comply with government and industry regulations, as well as monitor, and verify the endless human interactions with SaaS applications," states the company's website, claiming that Adallom's solutions make SaaS (Software as a Service) applications as secure as on-premise applications.

"When we launched Adallom, we had a vision to make it easy to keep your data safe in the cloud. We have delivered on that vision with visibility, governance and protection for the most popular cloud applications used by businesses worldwide and now, by joining Microsoft, we will have the opportunity to help many more customers take advantage of cloud applications without compromising security," reads the announcement on the Adallom website.

In November, Microsoft bought another Israel-based cyber-security company, Aorato, which developed software to monitors access to central communication components in enterprise IT systems. The Wall Street Journal reported that Microsoft paid about $200 million for Aorato.

"We are making this acquisition to give customers a new level of protection against threats through better visibility into their identity infrastructure," said Numoto. "With Aorato we will accelerate our ability to give customers powerful identity and access solutions that span on-premises and the cloud, which is central to our overall hybrid cloud strategy." The aorato.com website now redirects to Microsoft's "Advanced Threat Analytics" product page.

The perceived lack of security is one of the last remaining barriers to widespread adoption of cloud computing in the enterprise, especially for large corporations. With this and other recent moves to boost cloud security, Microsoft wants to persuade late adopters to migrate to the cloud. Apart from these recent acquisitions, Microsoft also stuck a deal with Rackspace earlier this year. It seems likely that Microsoft's cloud initiative will be successful, and Microsoft's stock will soar as a result.

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Comments on this article and MSFT stock

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GrowthInvestor
bullish
What is microsoft cloud's market share? what is the revenue from cloud? And what is your price estimation? should i buy microsoft stock?
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giulio
bullish
Hi, thanks for writing. See some MSFT info and charte here:
http://amigobulls.com/stocks/MSFT/analys...
The migration to the cloud is a general trend in the IT industry. Microsoft is following this trend and trying to persuade its big clients to migrate to the cloud, which explains the emphasis on cloud security.
Do share this awesome post