Microsoft has made a small but valuable acquisition in the cybersecurity space with the purchase of 50-person company PhoneFactor, who is an existing partner. PhoneFactor is in the business of phone-based multi factor authentication - basically its solution converts a mobile phone into a password verification device for access to enterprise applications. With ever more use of cloud and mobile devices, security issues are commanding more attention – systems and data are only as secure as the end points.
Given all the chatter leading up to the Windows Phone 8 launch at the end of the month (the launch of the Surface tablet will also be wrapped into the event), this looks like it should be a tuck in acquisition for the Windows Phone operation but it is the Server and Tools division that is making the purchase. The plan is to integrate the PhoneFactor technology into Windows Azure, Azure Active Directory and the online Office 365 suite. It can also be used to secure on premise applications so it is being set up to become part of the software infrastructure stack and provide consistency across on and off premise environments. It brings another capability to the Microsoft stack and an opportunity for add-on sales – it will be available for wrapping into Microsoft Volume Licensing contracts at some unspecified time, meanwhile Microsoft will continue to sell it as a standalone product. PhoneFactor’s solutions also support software from other vendors e.g. IBM Tivoli, Citrix, VMWare. These will continue to be sold but as always with this type of acquisition there will be questions over their longevity - verification providers should preparing for a fresh marketing push.