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Report: Microsoft To Buy Security Analytics Company Hexadite For $100M

Microsoft is said to be buying Hexadite, a venture-backed firm that offers a security orchestration and automation platform that uses artificial intelligence to investigate and respond to alerts.

Microsoft is reportedly looking to deepen its security capabilities as the software giant has agreed to acquire Hexadite for $100 million, according to a report Wednesday on the Israeli financial news website Calcalist.

Hexadite offers a security orchestration and automation platform that uses artificial intelligence to investigate and respond to alerts. The company is backed by HPE, as well as venture capital firms TenEleven and YL Ventures. It most recently raised $8 million in Series A funding in February 2016.

Hexadite did not respond to CRN requests for comment on the acquisition reports. A Microsoft spokesperson said in an email that the company had "nothing to share at this time."

[Related: CRN Exclusive: Hexadite Launches Partner Program, Names Former Carbonite Exec Couto As Channel Chief]

The report comes as Microsoft continues to make significant investments around security, an issue CEO Satya Nadella has called the "most pressing issue of our time." Nadella has said Microsoft plans to build around the pillars of privacy to ensure data is private and under control; compliance to make sure data is in agreement with the law; transparency around data collection and usage; and data security. The goal, he said, is to help companies improve their "operational security posture."

To further its commitment to security, Microsoft announced plans to funnel $1 billion into security research and development. That strategy has included multiple security acquisitions, including that of data protection company Secure Islands and cloud security company Adallom in 2015.

The purchase of Hexadite would expand Microsoft's capabilities around security automation and orchestration, a market that is gaining increasing traction and importance in the security space as companies face an overabundance of alerts and a shortage of security talent. The company also has a growing channel presence, announcing the launch of its first partner program and appointment of channel veteran Jessica Couto in April of this year.

Hexadite partners were wary of what a Microsoft acquisition might mean for the company, especially in the crowded and competitive security automation and orchestration market. One Hexadite partner, who did not want to be named, said a Microsoft acquisition, if the reports prove correct, would "take it out of being a product that we would want to focus on."

"We don't sell any Microsoft products currently. We are a hardcore security-focused company, and we would not consider Microsoft a top security player," the executive said. "This would be a first for us to pick up a Microsoft product."

The partner executive worried that a Microsoft acquisition would slow investment in Hexadite, something they said is necessary for the "super crowded" market for security automation and orchestration. They said that could be a factor in if they want to continue partnering with the vendor going forward.

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