by Jared Weiner | 06/24/2020
Following months of speculation, Microsoft, announced on Monday its acquisition of CyberX, a cybersecurity startup that provides a continuous monitoring and vulnerability management platform built for OT networks. Terms of the deal were not officially disclosed, though several media outlets, including TechCrunch, reported the acquisition will cost Microsoft approximately $165 million.
Microsoft made waves in early 2018 when it announced its intention to invest $5B to reinvigorate its IoT and intelligent edge strategy, pledging to expand its partner ecosystem and develop a wide range of new IoT tools, solutions, and services. The acquisition of CyberX underscores Microsoft’s commitment to this strategy and bolsters the exisiting cybersecurity capabilities Microsoft offers under the Azure IoT umbrella.
Though industrial implementations make up only a small portion of Microsoft’s broader IoT strategy, the company was still among the leading suppliers of software platforms for the industrial IoT, as noted in VDC’s recently-published study The Global Market for Industrial IoT Platforms. By integrating CyberX’s OT cybersecurity technology within Azure IoT, Microsoft can significantly boost the viability of its IoT platform in manufacturing and other industrial environments. The addition of the CyberX team itself further strengthens the in-house expertise Microsoft can provide to its customers and ecosystem partners.
Of course, this acquisition will also have a considerable impact on the market for industrial cybersecurity solutions, a particularly dynamic space that has been shaped by a number of acquisitions and high-profile partnerships in recent years. Of note:
In announcing this acquisition, Microsoft emphasized its focus on integrating CyberX’s technology within its broader suite of IoT and cybersecurity solutions. The company’s long-term intentions for CyberX as a standalone offering, however, are less clear. As such, the implications of this acquisition within the market for industrial cybersecurity solutions will manifest as Microsoft’s long-term strategy for the CyberX brand unfolds.
Cybersecurity has become a particularly critical element of industrial organizations’ Industry 4.0 journey. As high-profile breaches make headlines and raise awareness across all areas of industry, manufacturers and other operators have become increasingly proactive in addressing the security of their OT systems. Consequently, ICS-focused cybersecurity startups will remain attractive acquisition targets for larger players in a number of adjacent technology markets.
VDC explored these topics and more in our recently published reports, The Global Market for Industrial Cybersecurity Software & Services and The Global Market for Industrial IoT Platforms. Please visit our website or contact us for more details!