from the January 2015 issue

Microsoft is to buy to buy Aorato start-up at estimated for about $200 million

Microsoft Corp. (Nasdaq: MSFT) has confirmed that it is buying Israeli cyber security start-up Aorato Ltd. Financial details were not disclosed, but two people familiar with the matter told the "Wall Street Journal" that the acquisition price was around $200 million. "Globes" reported talks between the two companies in July

Microsoft Corporate Vice President Cloud and Enterprise Marketing Takeshi Numoto said on his blog today, "I'm pleased to announce today that Microsoft has acquired Aorato, an innovator in enterprise security. We are making this acquisition to give customers a new level of protection against threats through better visibility into their identity infrastructure. 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.

"We all know corporate security is more important than ever. Nearly every day there are more headlines about breaches, fraud and data loss. Unfortunately, compromised passwords, stolen identities and network intrusion are a fact of life. Companies need new, intelligent solutions to help them adapt and defend themselves inside the network, not just at its edge.

"Aorato's sophisticated technology uses machine learning to detect suspicious activity on a company's network. 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. Key to Aorato's approach is the Organizational Security Graph, a living, continuously-updated view of all of the people and machines accessing an organization's Windows Server Active Directory (AD). AD is used by most enterprises to store user identities and administer access to critical business applications and systems. Therefore, most of our enterprise customers should be able to easily take advantage of Aorato's technology. This will complement similar capabilities that we have developed for Azure Active Directory, our cloud-based identity and access management solution.

"We are excited about the technology that Aorato has built and, especially, the people joining the Microsoft team through this acquisition. In the mobile first, cloud first era, Microsoft is committed to moving nimbly and aggressively to provide customers with solutions to their top challenges."

Aorato raised $10 million in January from Accel Partners Eric Schmidt's Innovation Endeavors and Glilot Capital Partners, and private investors Mickey Boodaei, a co-founder of Imperva Inc. and Trusteer. Last year Boodaei earned $151 million from the sale of Trusteer to IBM.

Aorato was founded in 2012 by CEO Idan Plotnik, VP R&D Michael Dolinsky, and VP professional services Ohad Plotnik. The company is based in Herzliya and has 10 employees and has raised $11 million to date.

All the founders served in the IDF cyber security unit, and have a decade of experience in the field. The company says that its product is "the first context-aware, behavior-based Directory Services Application Firewall (DAF). The company's solution profiles, then not only learns, but also predicts entities' behaviors enabling context aware real-time decision making."

The Plotnik brothers previously founded Foreity which was acquired by Aman Group in 2012.

Recent acquisitions in Israel by Microsoft include video search company VideoSurf in 2011 and 3DV ventures and gesture recognition company 3DV Systems in 2009.

Reprinted from the Israel High-Tech & Investment Report January 2015

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