Microsoft Acquires Multifactor Authentication Firm PhoneFactor

Microsoft today said that it has acquired PhoneFactor, a provider of phone-based multi-factor authentication (MFA) technology.

Founded in 2001, Overland Park, Kansas-based PhoneFactor counts hundreds of customers that use its technology which enables customers to deploy multi-factor authentication across a wide range of platforms and applications.

Multi-Factor Authentication, also referred to as “Out of Band Authentication,” is growing anti-fraud measure financial institutions are implementing in their online banking services to help protect customers. With the technology, at the time a customer attempts a transaction, a text message or phone call is sent to the mobile phone number the bank has on file. The customer is given through the phone a “TAN” or one-time password that must be provided on the website in order to complete the transaction.

“The acquisition of PhoneFactor will help Microsoft bring effective and easy-to-use multifactor authentication to our cloud services and on-premises applications,” Bharat Shah, corporate vice president, Server and Tools Division for Microsoft, said in a statement. “In addition, PhoneFactor’s solutions will help Microsoft customers, partners and developers enhance the security of almost any authentication scenario.”

PhoneFactor’s solutions are already compatible with many Microsoft products and services, including Outlook Web Access and Internet Information Services, and interoperates with Active Directory.

“We are thrilled to join Microsoft and look forward to bringing our secure, cost- effective and convenient authentication solutions to the millions of Microsoft customers, partners and developers around the world,” said Timothy Sutton, CEO and co-founder of PhoneFactor.

The terms of the deal were not disclosed.

PhoneFactor said it would continue to work on further integration with key Microsoft technologies such as Active Directory, Windows Azure Active Directory and Office 365, helping customers to protect both on-premises and cloud assets.

For the time being, PhoneFactor will continue to support its products and services directly through its existing support channels until further notice, adding that Microsoft partners won’t be able to resell PhoneFactor solutions until it is worked into Microsoft’s Volume Licensing programs.

Related Reading: PhoneFactor Adds Multi-Factor Authentication for Credit and Debit Card Transactions