Credit: Shutterstock photoEnding months of speculations, Microsoft Corporation ( MSFT ) announced that it has acquired an Israel-based security software company Aorato for an undisclosed amount to beef up its Azure Active Directory security options, especially for enterprises.
The talks of acquisition were first reported by The Wall Street Journal in July. WSJ also cited that $200 million is the possible acquisition price. Microsoft, however, did not disclose the terms of the deal. Following the announcement, Microsoft shares were up 1.70% and closed at $49.61.
Aorato, founded in 2011 by Israel Defense Forces veterans, develops software that monitors user behavior and detects suspicious activity using machine learning algorithms on enterprise networks. It specializes in enterprise security and traces suspicious usage of employee credentials, such as numerous guesses at a password. Therefore, it enables users to take appropriate steps to protect their systems when anomalies are detected.
Following the acquisition, Aorato will join Microsoft's Identity and Security Services Division and discontinuethe sale of its Directory Services Application Firewall ("DAF") product.
Aorato's technology will complement Microsoft's Azure Active Directory, its cloud-based identity and access management solution by helping it to offer customers better identity and access solutions both on-premises and in the cloud.
Cyber security is an area of concern and investment today, given the increasing number of cyber-attacks. Cloud technology is being increasingly adopted by businesses to innovate and drive growth. However, this makes them vulnerable to cyber-attacks, which can cost them millions of dollars. Microsoft initiatives to improve protection to enterprise swill make its Azure Active Directory system more appealing to them. It will broaden its corporate customer base and boost its top- and bottom-line performances.
Microsoft shares carry a Zacks Rank #3 (Hold). Better-ranked technology stocks to consider at this time include Adobe Systems ( ADBE ), Aspen Technology, Inc. ( AZPN ) and Intuit Inc. ( INTU ), all of which hold a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
