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Microsoft acquires Israel based cloud security firm Aorato for US$200 Million

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Microsoft has officially ended months of speculations and confirmed that it has acquired cloud security startup Aorato (via Techcrunch) for an undisclosed sum. The Wall Street Journal noted back in July that Microsoft was in talks to buy Aorato, and estimated the possible purchase price at $200 million.

This acquisition is the first deal Microsoft has done in Israel since it bought gesture-recognition start-up 3DV Systems Ltd. in 2009. The Israel-based maker of security solutions co-founded by veterans of the Israeli defense forces, develops and sells software that monitors access to central communication components in enterprise IT systems.

Aorato’s software builds a normal profile of various authorized users in the company, and uses this to flag external penetration attempts, as well as unauthorized activities by employees.The company recently closed a funding round of $11 million, led by Accel Partners and Innovation Endeavors. Other investors in the company include Israel-based Glilot Capital venture fund, and two of the founders of Trusteer, an Israeli information-security company bough in 2013 by IBM for $650 million.

Takeshi Numoto, Corporate Vice President, Cloud and Enterprise Marketing, Microsoft wrote in a blog post-

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.

With the rise of clouds services, security has become a key area for research and investment, particularly with the number of data breaches recorded in the past few months. The acquisition will see most of Aorato’s team join Microsoft, with the company ceasing to sell its flagship product, Directory Services Application Firewall (DAF). However,  it’s unclear where Aorato’s technology will sit in the Microsoft portfolio.

One of the possibility is that Microsoft might integrate Aorato’s cloud security infrastructure and software wih its OneDrive platform, and provide the combined two, to its enterprise customers. This is a mere guess, as neither Microsoft nor aorato have revealed any details regaring how the former wiill integrate latter into its portfolio.

Microsoft’s interest in Israel’s rapidly growing start-up scenario is interesting. Just months ago, Microsoft had signed a letter of Intent with Israel based text-analysis company, Equivio. Though financials were undisclosed, but various industry analysts pegged the number at US$200 Million, which is coincidently similar to what it offered to Aorato.

Senior Writer

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