The tech giant has committed $1 billion to cybersecurity R&D.
Financial terms were not disclosed.
In May, Israeli financial news website Calcalist said Microsoft would pay $100 million for Hexadite, which is headquartered in Boston with its research and development centre in Israel.
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Hexadite says its technology increases productivity and reduces costs for businesses.
Terry Myerson, executive vice president of Windows and Devices Group at Microsoft, said Hexadite will enable the company to add new tools and services to Microsoft’s enterprise security offerings.
Investors in Hexadite include Hewlett Packard Ventures, and venture capital firms TenEleven and YL Ventures.
Microsoft said in January it plans to continue to invest more than $1 billion annually on cyber security research and development in the coming years. Israel has already benefited from that investment.