Dubbed Microsoft Ventures, it will complement the sizable operations that the company already has in Israel.
In further evidence of Israel's power as a high-tech innovator, IBM said it bought the Israeli startup EZScource and Microsoft said it was establishing a new venture capital unit that will initially have offices in the U.S. tech centers of San Francisco, Seattle and New York as well as Tel Aviv.
IBM, which has acquired 13 other Israeli startups since 1998, said Wednesday it expected to complete the acquisition of EZSource in the current quarter subject to completion of governmental review. It did not disclose financial terms.
Noting that building applications for mainframe computers can involve millions of lines of code, whose updating can take weeks, IBM said. EZSource simplifies the process with a visual dashboard that shows developers which applications have to be adjusted or updated.
EZSource, which was founded in 2003 and has offices in Israel, the United States, Europe and Japan, counts ING Life, Maybank and 7-Eleven as clients. IBM's last acquisition in Israel was Trusteer in 2013, for which it paid more than $600 million.Meanwhile, Microsoft said its new venture arm would give it entree to the youngest startups and an insight into the newest industry developments.
"We've done a lot of investing, but not a lot of early-stage. Because we would often invest alongside commercial deals, we were not a part of the early industry conversations on disruptive technology trends. With a formalized venture fund, Microsoft now has a seat at the table," said Nagraj Kashyap, corporate vice president for Microsoft Ventures, in a blog post Monday.
The new venture operation will focus on cloud computing, machine learning and computer security, he said. "In the coming days and weeks ahead and beyond, you will see us showing up as an investor in companies that complement these spaces," added Kashyap.?Another Microsoft division that had previously gone by the name Microsoft Ventures has now been named Microsoft Accelerator, and it too has a Tel Aviv office. Microsoft has a major presence in Israel, which includes research and development centers in Herzliya and Haifa employing a workforce of about 1,000. In March it opened an R&D center in Nazareth.? EZSource, an Israel-based application discovery company, aids developers in modernizing mainframe applications for digital business.