Microsoft Acquires CyberX to Boost Azure’s IoT Security

Microsoft (MSFT) is buying Israel-based startup, CyberX, to solidify security for its enterprise-level customers. The amount of the acquisition was not disclosed but was previously reported for $165 million by Globes financial website in May.

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Microsoft’s move is consistent with its strategy of shoring up enterprise-level IT services and cybersecurity for which it has invested up to $5 billion over the past two years. In March of this year, both companies announced that they would be working together to integrate CyberX into the Microsoft Azure cloud platform.

Handling industrial-level cybersecurity, Microsoft intends to leverage CyberX’s capabilities to serve areas on the networks of what is commonly referred to as internet of things (IoT). This will facilitate and work in tandem with Microsoft’s Azure cloud-computing service which grew 59% in Q1.

In a June 22 blog post, Microsoft wrote, “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.” The post continued: “With CyberX, customers can discover their existing IoT assets, and both manage and improve the security posture of those devices.”

According to data compiled by Start-Up Nation Central, CyberX was founded in 2012 by Nir Geller and Omer Schneider. CyberX has raised $47million from investors such as Qualcomm Ventures, Flint Capital, US VC fund and Norwest Venture Partners.

Confirming the deal with Microsoft in a blog post, CyberX co-founder Omer Schneider said, “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.”

Argus Analyst Joseph Bonner noted yesterday that investors may see Microsoft stock as a “haven of stability and growth.” He added that its shift toward high-value commercial and cloud application businesses was “just the right product set” as enterprises rapidly move to the cloud and remote connectivity. Bonner raised the price on EA to $235 from $200 while keeping a Buy rating with an upside potential of 19%.

Goldman Sachs analyst, Heather Bellini also increased the price target on Microsoft to $215 from $198, maintaining a Buy rating price, indicating upside potential of 9%.

Microsoft’s stock is up 25% year-to-date with 23 analysts assigning a Buy rating, 1 Hold, and no Sell ratings which altogether results in a consensus of a Strong Buy on TipRanks. The average analyst price target stands at $209 (6% upside potential). (See Microsoft’s stock analysis on TipRanks)