Microsoft confirms deal to buy Israeli cyber security company Hexadite

Microsoft deal for Hexadite believed to be around $100m

Microsoft has confirmed that it has agreed a deal to acquire cyber security company Hexadite for $100m, a move by Microsoft that was first outed just over two weeks ago by Israeli financial news website Calcalist.

Hexadite developed a product called AIRS (Automated Incident Response Solution) that connects to other security detection systems and uses artificial intelligence to investigate and mitigate threats.

Its customers include Internet of Things specialist company Telit and AI communications company Nuance as well as at least ten other companies.

It claims that its software can reduce the time it takes to respond to a security threat by 95 per cent.

However, the deal has not closed - Microsoft and Hexadite have signed an agreement, and the deal will also require regulatory approval.

Hexadite is headquartered in Boston, Massachusetts, with a research and developmental arm in Israel, and has raised $10.5m in two rounds of equity funding from four investors: YL Ventures, TenEleven Ventures, Mosche Lichtman, and Hewlett Packard Ventures.

The team is led by its three founders: Eran Barak, who is CEO, Barak Klinghofer who is chief product officer, and Idan Levin, the company's chief technology officer.

Barak told TechCrunch last year that the company wanted to use the funding from the likes of Hewlett Packard Ventures to increase its overall employee base of 20.

This would include doubling its sales team in the US from five to 10, and adding more engineering expertise to the R&D team in Israel. He also suggested the company would open up a UK sales office.

After the latest round of funding of $8m, Barak suggested the funding should carry him for 18 months to two years before he would need more.

Microsoft's acquisition of Hexadite comes following a string of bad news for the company in terms of security. It's operating system software has been found to have been exploited by the US National Security Agency, and has been at the centre of a global ransomware scare.

It's latest Windows 10 Enterprise operating system, meanwhile, has been accused of ignored group policy privacy settings, making it unsuitable for many security-focused applications.

And users have continued to complain about the company's policy of rolling up all security patches into one mega-patch, making it more difficult for organisations to test and deploy patches, which it has extended to Windows 7.