CyberX announced its acquisition by Microsoft on its blog and homepage of the company website.

IoT in Spotlight as Microsoft Invests an Estimated $165M in Security Company

Microsoft announced its acquisition of CyberX to make its IoT products more robust at a time when the company has already invested in beefing up security for its Azure cloud computing product and has developed relationships with an array of security providers. The Waltham, MA company may have been in play since rumors of an acquisition negotiation with Microsoft began in February.

According to a posting on the Microsoft blog, the acquisition will enable the company to add two more levels of functionality to its IoT:

  1. Giving customers visibility into what IoT devices are already connected to their networks
  2. Managing the security on existing IoT devices (referred to as “brownfield devices”) that have been historically difficult due to a myriad of custom protocols.”

The deal is estimated at $165 million, according to a story on by Ingrid Lunden. CyberX focuses on “detecting, stopping, and predicting security breaches on internet of things networks and the networks of large industrial organizations.” Those organizations include major corporations and manufacturers.

“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 utilize a lot of ‘unmanned’ machines managed across sprawling networks for essential services: it applies behavioral analytics and other AI-based techniques to continuously monitor network activity and detect anomalies that could indicate breaches,” Lunden writes.

A story on explains that the connected control systems of everything from fleets of robots to electric substations are largely unmonitored. It quotes a survey by Kapersky that only 23% of companies say their IoT is compliant with regulations. Another 29% reported an increase in industrial control system vulnerabilities in 2017.

Two years ago, Microsoft invested $5 billion in IoT to create a “trusted, easy-to-use platform for our customers and partners to build connected solutions…” Since then, it continued seeking better solutions for proprietary enterprise systems, in particular.

“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. He further added: “By joining forces with Microsoft, we will rapidly scale our business and technology to securely enable digital transformation for many more organizations. 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.”

The founders of the company, Schneider and Nir Giller, are both veterans of the Israeli Defense Forces elite cyber unit and also graduates of UpWest Labs.