Microsoft Said To Buy Cyberecurity Firm Hexadite for $100 Million

Redmond may not be saying anything, but reports indicate that Microsoft has agreed to buy Israeli cybersecurity company Hexadite for around $100 million. Hexadite uses artificial intelligence (AI) to analyze and address small-scale network attacks, a frequent problem for many large enterprises.

Although nothing is official yet, the deal could be announced within the next couple weeks, according to reports. Assuming the acquisition goes through without a hitch, the agreement would represent yet another example of Microsoft’s recently announced plans to invest more than $1 billion on network security every year for the near future.

Automating Responses to Smaller Threats

Hexadite, which was founded in Israel but is currently headquartered in Boston, is one of several new companies that is tackling the problem of network security by using machine learning and AI to handle smaller network breaches, while flagging more significant attacks for a company’s security team to address themselves.

By automating the work of dealing with less serious attacks, Hexadite aims to free up resources to focus on larger and potentially more dangerous threats. The company said it can reduce the time needed to address security problems by up to 95 percent.

Reports of a deal between the two companies appears to make sense, given what Hexadite does and where Microsoft has said it wants to focus its energies. The acquisition would fit neatly into Redmond’s strategy of expanding its offerings for enterprise customers, particularly those already using cloud-based products and services.

In fact, Hexadite may not be the only such deal Microsoft is negotiating at the moment. Just last month, the company was also reported to be in talks to acquire Cloudyn for $50 million to $70 million, Cloudyn, another startup focused on monitoring and optimizing enterprise operations across multi-vendor cloud deployments, is also an Israeli tech company.

Growing Security Problems

Although Hexadite is small, with only around 35 employees, the acquisition would nonetheless bring Microsoft some marquee security clients, including Nuance, Telit, and IDT.

Microsoft could probably use some good headlines on the security front right about now. The company has taken a hit thanks to the WannaCry ransomware attack earlier this month that struck computers across the globe running various versions of the Windows operating system. Although Microsoft had already discovered the vulnerability that the attack exploited and released a patch prior to the attack, millions of computers worldwide had not yet upgraded their systems in time to stop the attack.

As WannaCry so dramatically demonstrated, such cyberattacks are becoming increasingly problematic for enterprise customers, as a result of the explosion of networked devices as well as the recent professionalization and monetization of network attacks. As a result, enterprises are expected to invest as much as $82 billion in security software this year, according to some estimates.