Microsoft is investing more than $1 billion per year on cybersecurity research and development, and has acquired three cybersecurity firms in Israel.

Microsoft’s interest in cybersecurity actually runs deeper, as the $1 billion annual spend does not include acquisitions it may make in the sector, according to Bharat Shah, Vice President of Security at Microsoft. Greater emphasis on security is a natural extension of the American software giant’s increasing shift to the cloud. Its flagship cloud product Azure competes with Amazon in the space.

“As more and more people use cloud, that spending has to go up”, said Shah. The increase is also spurred by the number of attempted cyberattacks, which has skyrocketed from about 20,000 a week a few years ago to 600,000 - 700,000, according to Microsoft data.

Apart from its investments in internal security, in just over two years Microsoft has acquired three cybersecurity firms in Israel, which is becoming a major cybersecurity hub. As Reuters reports, these include enterprise security start-up Aorato, cloud security firm Adallom, and Secure Islands. The latter’s data and file protection technology has been integrated into Microsoft’s Azure Information Protection service.

“If you are talking about an ecosystem with more than 400 start-ups it’s not really a coincidence. Israel is huge in security”, said Secure Islands founder Yuval Eldar.

Microsoft Ventures, the company’s venture capital arm, has also made several cybersecurity investments in Israel. Amongst these is Tel Aviv-based Illusive Networks, which pioneered deception technology. This type of security deceives cyber attackers by planting false information – what the firm calls an “alternate reality” – then identifies the would-be attacker and triggers an alert. Microsoft has also invested in Team8, which created Illusive Networks.

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