What Does Microsoft's Adallom Buy Bring to its Cloud Security?

Microsoft (MSFT) is putting its money where its mouth is when it comes to cloud services, Israeli security company Adallom for $320 million, according to a published report, to further bolster security on its Azure platform.

Adallom provides security services on the back end to companies running cloud-based services. The company, which based in Palo Alto, California, but has the bulk of its 80-person staff in Israel, offers a service that provides monitoring of both users and events, including suspicious activity, in the cloud. Adallom also offers data-sharing services, and currently works with the channel.

At this point Adallom’s offerings are platform-agnostic, promising to “secure data in any cloud,” according to the company’s website. Adallom currently has security solutions for Microsoft’s Office 365 as well as Amazon Web Services, Dropbox, Google Apps, Ariba, Salesforce and a host of others. It’s not clear if Microsoft will continue to provide support for other services with Adallom post-acquisition or integrate the technology into its own cloud platform.

Other U.S. firms had already taken a financial interest in Adallom’s technology. The company won $50 million in funding from U.S. venture capital firm Sequoia Capital, EMC Corp. (EMC) and Hewlett-Packard (HPQ), as well as overseas firm European Index Ventures.

If Microsoft goes through with the deal as reported, Adallom wouldn’t be the first Israeli cloud security firm the company has purchased. In November Microsoft bought security software company Aorato for a reported $200 million. Other purchases the company has made in Israel recently include text analysis firm Equivio and the technology of digital pen maker N-trig.

The Israel financial newspaper Calcalist reported that Microsoft will make Adallom the center for the software giant’s security business in Israel.