Microsoft announced this morning that it purchased cloud security firm Adallom. According to sources familiar with the matter, the deal cost the Redmond-based software giant $250 million. That dollar amount is below previously reported figures pegging the value of the purchase north of $300 million.
The deal was originally reported in July of this year. Given the time it took for Microsoft to announce the deal, the media appears to have picked up the scent when things remained inchoate. CNBC reported yesterday that the deal was “poised” to wrap.
Microsoft has made a number of successful purchases following its internationally known deal to pick up the majority of Nokia’s hardware assets, the best two examples being the company’s decisions to bring Sunrise and Acompli into its fold for notable sums. The Nokia deal’s internal combustion that spread short-term conflagration across Microsoft’s GAAP earnings is perhaps more a warning to not buy too large, instead of not buying at all.
Adallom raised more than $49 million from investors over its private life. Now, it will presumably have access to larger coffers. The quantity that Adallom raised from private investors is interesting when compared to the sums raised by Acompli and Sunrise, $7.3 million and $8.2 million, respectively. Comparing scale of exit prices to amount raised, it seems that Adallom was less lucrative for investors than other recent Microsoft deals.
Regardless, Microsoft’s cloud push continues. It’s consistently worth keeping close to the front of our craniums that a Cloud Kid runs Microsoft now, and so to see the firm deploy capital in that direction is precisely not surprising.
What I’m taking away from the buy is that the M&A team at Microsoft isn’t gun-shy, and that the company is still willing to pay up for startups. Given recent market turmoil, that must make at least one of your Friendly Neighborhood VCs sleep a bit later. At least until the NASDAQ faceplants again.