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Microsoft Bets Big On Cybercrime

Microsoft is ramping up its muscle power to monetize the fast-growing cybersecurity industry, which is expected to grow by over $90 billion to reach a market size of $170 billion by 2020.

After losing out on several growth opportunities in the mobile and cloud sector, the Redmond, WA-based company is on a spending spree to get ahead of its competitors, including Cisco, Dell and IBM. The company recently announced its plans to acquire Israeli cybersecurity firm Secure Islands in a deal, which is estimated to be between $100 million and $150 million, Forbes reported.

Secure Island’s acquisition is part of Microsoft’s increasing investment in Israel, which is the second-largest exporter of cybersecurity products in the world after the U.S. Over the last year, Microsoft has reportedly invested about $650 million in acquiring Aorato ($200 million) and Adallom ($320 million), in addition to Secure Islands.

Microsoft’s increased interest in Israel is being led by its nine-year-old cybersecurity R&D center in the country, which has been getting Microsoft the most promising M&A deals, according to Forbes.

“The increased activity in the M&A of Israeli cybersecurity companies has shown the technological competitiveness of Israel in the hypergrowth security market. We believe this is only the beginning, and we will see large substantial cybersecurity companies emerge out of Israel,” said Ronen Nir, general partner at Carmel Ventures, in a statement.

With the acquisitions in Israel, Microsoft is ultimately building a stronger hold over the U.S. cybersecurity market, as for most of the 200 Israeli cybersecurity firms, their clients mostly consist of American finance, military and tech companies, according to the Israel Export and International Cooperation Institute.

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