Microsoft Acquires Adallom to Boost Cloud Data Security

In July, news began circulating that Microsoft had acquired cloud security specialist Adallom for approximately $320 million. At the time, Microsoft stuck to its longstanding policy regarding prematurely publicized business deals by declining to comment on the matter.

Now, Microsoft is making it official.

“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, corporate vice president of Cloud and Enterprise Marketing at Microsoft, in a Sept. 8 announcement. “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.”

In a brief statement posted to the Adallom home page, the company said that by joining Microsoft, it “will have the opportunity to help many more customers take advantage of cloud applications without compromising security.” In the interim, it’s business as usual for the newly acquired, 2.5-year-old firm. “We will continue to sell the Adallom solution and support our customers while we complete the integration into Microsoft.”

Adallom’s platform provides identity-based, security-as-a-service protection for enterprise application data and content stored on third-party clouds. The company’s client roster includes Hewlett-Packard (HP), LinkedIn, Netflix and SAP.

Last year, Adallom helped organizations thwart a variant of the Zeus malware that targeted Salesforce users. In 2013, security researchers at the company discovered an Office 365 token vulnerability that could be potentially used to compromise an enterprise’s SharePoint site.

Microsoft has not officially disclosed financial terms concerning the buy. A brief blog post by Adallom founder and CEO Assaf Rappaport hints that the Redmond, Wash., software giant wrote a hefty check for his firm. He said the deal “represents a major investment in cloud and Software as a Service (SaaS) application security for the Microsoft team.”

Incorporating Adallom’s tech will bolster Microsoft’s identity-centric security capabilities, said Numoto. “Adallom expands on Microsoft’s existing identity assets, and delivers a cloud access security broker, to give customers visibility and control over application access as well as their critical company data stored across cloud services. Adallom works with popular cloud applications including Salesforce, Box, Dropbox, ServiceNow, Ariba, and of course Office 365,” said Numoto.

While listing a Palo Alto, Calif., address as its headquarters, the bulk of Adallom’s research and development activities are based in Tel Aviv, Israel.

It’s not the first time Microsoft has looked to Israel to beef up cloud security. In late 2013, Microsoft acquired Aorato, a hybrid-cloud security specialist based in Israel, to help enterprises beef up their Active Directory security. “Aorato’s sophisticated technology uses machine learning to detect suspicious activity on a company’s network,” explained Numoto in a statement. “It understands what normal behavior is and then identifies anomalies, so a company can quickly see suspicious behavior and take appropriate measures to help protect itself.”