Why Microsoft Is Buying Up Israeli Security Companies


If you’ve been following tech news recently, you may be seen that Microsoft just acquired its third Israeli security company. With the sort of technology Microsoft makes, getting involved in security isn’t a surprise, but with such quick accession and focus on one area, their new model is worth looking at a bit closer.

The Companies

This is all a recent ordeal for Microsoft. They started the process in late 2014, with the acquisition of Aorato and later Adallom. The third company, Secure Islands, was picked up late in 2015.

The first acquisition, Aorato, is a cloud security vendor founded by Israeli Defense Forces veterans. Their flagship product was software that monitors access to enterprise IT systems, using machine learning to detect suspicious activity on a company’s network.

Adallom, also founded by Israeli Defense Forces veterans, monitors the use of software-as-a-service applications from Salesforce, Google, Amazon, Dropbox, and Microsoft. Already monitoring Microsoft’s Office 365 cloud service, the purchase didn’t come as much of a surprise when announced.

The third company to be scooped up was Secure Islands Technologies. Secure Islands is the company behind IQProtector, a software that “captures and classified undestructed data at the point of creation. Microsoft representatives state that the company plans to integrate Secure Islands technologies into their existing Azure Rights Management Service.

Why Israeli Companies

There have been a lot of high profile security breaches recently. Micorsoft’s rapid acquisitions simply means that they’ve taken notice. They’re buying up some of the best names in the bid to the tune of hundreds of millions of dollars apiece, and that’s because these are companies worth buying.

The selling point with these firms isn’t that they’re Israeli, specifically, it’s that they’re the top in the cyber security game. The fact that they all three happen to be Israeli, though, isn’t much of a shock.

Israel knows what they’re doing when it comes to cyber security. The tiny nation is surrounded by less than friendly and often hostile neighbors, and has no shortage of conflict within its own borders. Subsequently, they’ve evolved to be self-reliant and vigilant.

As technology has become ever more integrated into the defense game, it’s no surprise that a nation capable of mobilizing its entire army in less than 24 hours also has major internet security protocol for both its forces and its citizens.

In fact, the country is second only to the US in terms of export of cyber security services, an industry worth over $3 billion annually for the country. It’s an industry that’s become as synonymous with the country as banking in Switzerland.

Add onto that the fact that Microsoft already has standing business relationship or former employees working for many of these companies, and Microsoft’s actions start to seem like a shrewd business move, especially as more and more services, software, and information moves to cloud based systems.

As long as the tech giant works on proactively integrating and developing the security contractors’ technology, rather than just acquiring the rights to it, these major investments could pay off bigtime later down the road.