The Israeli security vendor should help Microsoft lock down data in applications running outside a company's perimeter.
Terms were not disclosed and are in dispute. One source close to the deal said that the price, initially reported to be $320 million cash, is actually $250 million, but could grow to $320 million if prescribed targets are hit. Microsoft, the source said, wants to be assured that Adallom can be a $10-million-a-year business. That characterization, however, was countered by another source, who said $250 million is the purchase price all-in.
A Microsoft spokesperson would not comment on terms of the acquisition.
Adallom, according to a blog post announcing the purchase, “delivers a cloud security broker to give customers visibility and control over application access as well as their critical company data stored across cloud services.”
Three-year-old Adallom says it protects not just data sitting inside a company’s own server rooms, but also data that is created and resides in outside third-party software services, the so-called software-as-service vendors like Salesforce CRM and Box BOX .
The company’s technology will be applied across various Microsoft properties MSFT including Microsoft Retail Management System, Azure Active Directory, and Azure itself, Microsoft said in a blog post. Adallom said it will continue to support non-Microsoft applications as well.
Cloud security will be a burgeoning market as more businesses turn to outside software-as-a-service vendors for key applications for everything from word processing and email to human resources and expense report management. Forrester Research FORR estimates that companies are now spending $282 million on cloud security services annually, but expects that amount to skyrocket to $2 billion by 2020.
That’s why it’s been boom times for mergers and acquisitions in this market with Cisco CSCO acquiring OpenDNS for $635 million in cash, Hewlett-Packard HPQ ponying up for Voltage Security, and other deals earlier this year.
Note: This story was updated at 10:00 a.m. EST with additional information on how the deal was structured and again at 1:37 p.m. EST with details on the disputed deal price.
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