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Microsoft rumored to be buying Adallom for cloud security

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The Israeli start-up develops a security platform that can be deployed in 8 minutes

Microsoft is reportedly planning to pay around $320 million for Israeli security start-up Adallom. The company develops visibility, governance and protection tools for cloud applications.

The deal was reported by several regional publications, including Calcalist and business daily Globes.

Microsoft has a large presence in Israel and runs a start-up incubator in Tel Aviv, but if the deal comes to pass, it would become the most expensive acquisition it has ever made in the country.

Update: On Setember 8, Microsoft officially anounced it is acquiring Adallom for an undisclosed amount.

Adallom logo

Ad Halom

Adallom – a variation on “Ad Halom” meaning “the last line of defence” in Hebrew – was founded in 2012, with headquarters in Palo Alto and a development center in Tel Aviv.

The start-up offers a security platform available either on-premise or as a service, that can be deployed in as little as eight minutes. Adallom says it can protect business-critical data from the endpoint device all the way to the cloud.

It also runs a security research facility called Adallom Labs. Among other things, this part of the business was responsible for discovering a token disclosure vulnerability in Office365 in December 2013 which was “totally invisible to existing perimeter and endpoint protection defenses.”

Adallom has raised $49.5 million to date including $30 million in the latest financing round in April, from investors including Sequoia Capital, Index Ventures, EMC and Hewlett-Packard.

Globes speculates that the company could serve as the foundation for Microsoft’s new cyber security center in Israel.

Israel and Tel Aviv in particular are well known for the bustling start-up scene that has its roots in the universal conscription service – all three co-founders of Adallom were serving in elite IDF technology units.

Over the past few years, Microsoft has made repeated investments in this market, picking up security vendor Aorato for $200 million, text analysis specialist Equivio for another $200 million and digital developer N-trig for an unspecified amount, believed to be in tens of millions of dollars.

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