REDMOND, Wash., and OVERLAND PARK, Kan. — Oct. 4, 2012 — Microsoft Corp. and PhoneFactor Inc. today announced that Microsoft has acquired PhoneFactor, a recognized leader in multifactor authentication (MFA) solutions.

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

Founded in 2001, PhoneFactor is trusted by hundreds of leading organizations to help secure millions of logins and transactions each year. By leveraging a device nearly every user already has — a phone — PhoneFactor enables rapid deployment of MFA across a wide range of applications. It already works 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.

Terms of the deal were not disclosed.

About PhoneFactor

PhoneFactor offers the most comprehensive phone-based authentication platform in the marketplace. In addition to its flagship out-of-band phone call and text message methods and mobile authentication options, PhoneFactor offers a robust authentication platform featuring built-in support for leading on-premises and cloud applications, centralized user management, automated enrollment, user self-service, and extensive reporting capabilities.

For more information, visit www.PhoneFactor.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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