Microsoft has announced that it would be acquiring CyberX, a security startup that focuses specifically on detecting, stopping, and predicting security breaches on Internet of Things networks and the networks of large industrial organizations. Terms of the deal are not being disclosed, but sources say that it’s in the region of $165 million.
“CyberX will complement the existing Azure IoT security capabilities, and extends to existing devices including those used in industrial IoT, Operational Technology and infrastructure scenarios” said Michal Braverman-Blumenstyk, CVP, CTO, Cloud + AI Security, and Sam George, CVP, Cloud + AI Azure IoT in a blog post. “With CyberX, customers can discover their existing IoT assets, and both manage and improve the security posture of those devices.”
The deal caps off months of speculation that Microsoft would acquire the company. The reports started back in February, then went quiet, and then started to reappear again in May. Between then and now, the rumoured price also went up to $165 million from $150 million, which may have meant that the delay in closing the deal hinged on the valuation (or simply went up as others started to look at the company).
Microsoft’s interest in the company touches on two key areas that the company has been working on building up over the last several years: IT services for large enterprises, and cybersecurity — specifically cybersecurity leveraging AI to identify and tackle next-generation challenges.
The two have a large overlap in the form of CyberX, which works with major energy utilities, telecoms carriers, chemical producers and other industrial companies that utilise a lot of “unmanned” machines managed across sprawling networks for essential services: it applies behavioural analytics and other AI-based techniques to continuously monitor network activity and detect anomalies that could indicate breaches.
It looks like the whole company, including the founders, will be joining Microsoft with this deal. “Nir and I founded CyberX with the goal of delivering a scalable solution that would be easy to deploy and reduce risk for enterprises worldwide,” said Omer Schneider, co-founder and CEO of CyberX, in a blog post announcing the deal. “We’re thankful to our loyal customers and partners as well as to our dedicated employees whose innovation and hard work made it possible for us to reach this important milestone, and also to our investors for their ongoing support.”
“By joining forces with Microsoft, we will rapidly scale our business and technology to securely enable digital transformation for many more organizations,” add Nir Giller, co-founder, GM International, and CTO of CyberX. “Together, CyberX and Microsoft provide an unbeatable solution for gaining visibility and a holistic understanding of risk for all IoT and OT devices in your enterprise.” CyberX offers various tools to customers to help better manage the IoT networks (and specifically industrial IoT networks) they have in place, in particular around the concept of “digital transformation” and customers not just upgrading systems but getting a better grip on what they already have.
