Microsoft buys Unit 8200 AI Boutique for Cloud App Security and to Build Up Israel

A few things we discussed this month are mixing together. Israel’s Innovation Authority released its from start-up to smart-up nation report on technology and AI, including challenges.

And Microsoft, since engineer Satya Nadella became CEO, has shifted towards the cloud, AI and new industries/technologies – Azure is a big driver of the business and initiatives such as the partnership with Blackrock around retirement are opening doors to new industries.

Lastly, we discussed how Israel’s famous Unit 8200 has been responsible for a number of the most innovative and advanced startups for AI and technology, with high profile examples like NSO making front page news.

Let’s combine them all. Back in 2002, Microsoft hired Shelly Landsmann as Defense Sector Manager for Microsoft in Israel when she graduated Bar-Ilan University/Technion. Fast forward a decade plus and she becomes General Manager for Microsoft in Israel after acquiring startup Adallom.

Adallom was founded by three young intelligence officers within the Israeli Intelligence Corp/Unit 8200 after their Technion studies. They started the company out of the military in 2012 and sold it for around $320 million in the summer of 2015. Assaf Rappaport is now the GM for Microsoft R&D, and Ami Luttwak is the CTO for the unit.

Great coup for these young engineers, including access to Azure’s and Microsoft’s resources, and part of Microsoft’s strategy to buy cybersecurity companies to create their own security tools. In 2016 they renamed the company Microsoft App Cloud Security.

In more than one ways this is a blueprint: for young startups to get a big check and plug into larger organizations resources; for large firms to acquire unique tech and talent; and for industries to transcend their old ways.

Microsoft CEO Nadella has been betting the company on AI, as have Amazon, Google, Facebook, AQR, JP Morgan, RenTech, IBM, and others.