While we wait to get more news on Microsoft closing a reported acquisition of Cloudyn, another report has emerged of one more enterprise startup that the software giant is buying in Israel. Calacalist reported earlier today that Microsoft is paying $100 million to acquire Hexadite, a cybersecurity company that uses AI to sort through and address smaller network attacks — which can run up to 10,000 a month for a larger organization — while identifying larger problems for security specialists to tackle.
The news comes about a month after reports that Microsoft would be paying between $50 million and $70 million to acquire Cloudyn, a company that monitors and optimises a company’s operations across multi-vendor cloud architectures.
Contacted for a response, Microsoft declined to comment on the latest report earlier today. And Hexadite and its co-founders Idan Levin, Barak Klinghofer, Eran Barak, did not respond to our questions.
For what it’s worth, a single source tells us that both the Hexadite and Cloudyn acquisitions are in progress, and the Hexadite acquisition will likely be announced in a couple of weeks, which is why we chose to re-report the latest rumor, and resuscitate the previous one.
Hexadite has to date raised $10.5 million in funding, according to Crunchbase, with investors including HP Ventures, YL Ventures, TenEleven Ventures and Moshe Lichtman of Israel Venture Partners. Notably, Lichtman is a ten-year veteran of Microsoft, which could point to one connection between the startup and its alleged acquirer. Its last round, of $8 million, was raised last year.
If accurate, the Hexadite acquisition would be one of a series of security acquisitions that Microsoft has made in Israel. Past deals include Aorato, Adallom and Secure Islands.
Microsoft’s interest in Hexadite — whose customers include Nuance, Telit and IDT — points to how security remains a hot area in the world of technology and specifically enterprise IT. The rapid growth of connected services and devices has gone hand-in-hand with a rapid rise in cybercrime, with malicious hackers becoming increasingly rampant and sophisticated in their attacks on networks and the hardware and apps that run on them, with breaches leading to millions of dollars in costs and lots of stress.
This has led to an increasingly sophisticated landscape for security services, with companies covering every aspect of how we conduct business today and a huge amount of spending by organizations to try to prevent, stop, fix or mitigate damage. IDC estimates that enterprises will spend nearly $82 billion on security software this year.
Hexadite is part of what you might call the new guard of security companies, building solutions based on machine learning and AI modelled on “top cyber analysts” to try to tackle threats more like the smartest humans would.
Essentially what it does is provide a security remediation system: it identifies and stops smaller issues itself, and at the same time it weeds out bigger problems that need to be addressed by in-person security teams. By doing this, it prevents those teams from being overwhelmed by the smaller items. It claims to reduce the time it takes to deal with security issues, as a result, by 95 percent.
If you look at what Hexadite does, there is a connect between it and what Cloudyn is doing on the cloud management and optimisation front.
In both cases, the idea is to bring more automation to some of the more regular and recurring tasks of running a connected, cloud-based business. As Microsoft continues to hone its focus in the enterprise market, and on cloud services specifically, it is looking for more products and services to help differentiate itself from others in the field.
As more businesses are looking for ways to reduce mundane tasks and grapple with the sheer weight of network traffic and data that they face today, they’ll be looking for more solutions like these.
We’ll update this post as we learn more.
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