The Strategist

Microsoft to Invest in Information Security


07/21/2015 - 04:49



American software giant Microsoft is preparing to acquire an Israeli developer of information security Adallom. The deal amounted to $ 320 million.



Ben Franske
Ben Franske
According to anonymous sources familiar with the situation, Microsoft executives have already confirmed their intention to purchase Adallom. In case of successful completion of the transaction, it would be the fourth acquisition of Microsoft since the beginning of 2015.
 
Adallom was founded in 2012. The company develops solutions for protecting data stored in ‘clouds’. Adallom pays special attention to corporate solutions, and working with users of Microsoft Office 365, Google Apps, Salesforce.com and ServiceNow companies. In addition, Adallom has such IT-players like SAP SE, LinkedIn, Netflix as customers too. Adallom’s state totals 90 people. All of them will work in Israel after the deal with Microsoft, helping American corporations build business in the field of cyber security in the country.
 
Previously, Microsoft has acquired several Israeli companies, including software developer Aorato and company Equivio, engaged in textual analysis.
 
Microsoft recently demonstrated new solutions that will build a new ‘smart cloud’ with partners and create personalized techniques for each business. To simplify investments in cloud technology, the company has taken a number of initiatives in the international partnership program aimed at transforming the IT industry.
 
Microsoft is also preparing for new mass layoffs. It will be the second large-scale staff reductions for Microsoft lately. According to insiders, the new cuts are added to the previous round of restructuring, which was completed in June 2015. For the year, Microsoft has laid off 18 thousand people, and it was the largest decline in the history of Windows’ developer.
 
The source did not specify number of new layoffs, but said the cuts mainly aimed at smartphones production (purchased from Nokia in 2014) and hardware design units. By the end of March 2015, global Microsoft’s staff numbered about 118 thousand employees.
 
In III fiscal quarter, Microsoft recorded a decline in profit, while revenue was higher than Wall Street’s  estimate. Net income for the three months ending March 31 fell 12% to $ 4.985 million, or 61 cents per share, compared with $ 5.66 billion, or 68 cents a paper, a year earlier. Earnings per share excluding restructuring costs amounted to $ 0.62 per share versus $ 0.68 in January - March 2014. Analysts, surveyed by Bloomberg, expected that this figure will be about 53 cents. The company's expenses for integration and restructuring totaled $ 190 million.
 
Quarterly revenue rose 6.5% to $ 21.7 billion, higher than the forecast of $ 21.06 billion. Experts' forecast for this indicator was $ 21.1 billion. The improvement in this indicator is linked to the inclusion of mobile business Nokia in the calculation of revenues, the purchase of which the company completed last April.
 
Proceeds from the sale of licenses for the Windows PC to manufacturers decreased by approximately 23% in the III quarter of the 2014-2015 fiscal year. Revenues from license sales for consumer versions of Windows dropped by 26%, in the corporate version - 19%.

source: wsj.com