Microsoft’s CEO, Satya Nadela, is due to make a return trip to Israel in February 2016. Why does this corporate giant need to be located in the Holy Land?

Israel is now home to hundreds of multinationals, many with incubators and / or manufacturing facilities. Intel led the way initially and now has three separate operations in the country.  This week, we learnt that Bosch will be joining the pack and setting up their own development centre.

However, Microsoft is clearly taking its Israel capabilities to another level. As a contributor to Forbes magazine observed:

Microsoft appears to have locked on an excellent strategy for building up a cybersecurity business. They’ve gone fishing for acquisitions in Israel, a nation who is second only to the United States as the largest exporter of cyber products.

Over the past year or so, Microsoft has spent over US$700 million acquiring five Israeli companies, mainly in the cyber arena. Arguably, the two key purchases featured Aorato and Secure Islands.

However, purchasing technology is not the only way that Microsoft benefits from the Israeli market. Zack Weisfeld, head of Microsoft Venture Accelerators remarked that their Israeli incubator is only one of seven globally. Graduates include RideOn, which developed ski goggles, and ThirdEye, which helps drones to navigate. More importantly, these technologies now permeate into other applications of Microsoft.

On a note of irony, the financial paper “Calcalist” pointed out that Nadela is by no means that first Microsoft chief to visit Israel. Bill Gates, Ray Ozzie and Steve Ballmer made the journey in the past. However, all of them left their position within another 18 months. Must be something to do with the country’s holy atmosphere!

Nevertheless, the bottom line is that Israeli technology via Microsoft reaches the homes and workplaces of billions of people every day. That is a stunning achievement (for a desert country of barely 8 million people), and obviously good business for the commercial giant.