Microsoft has placed its Israel operations under the management of Microsoft France after the departure of Israel general manager Alon Haimovich, in the wake of an internal investigation that found the subsidiary had used Azure cloud services in ways that violated the company’s code of ethics.
Leadership Exit After Internal Probe
Haimovich has left the company following the investigation, and several other senior managers in Microsoft Israel’s governance department have also stepped down. In his absence, Microsoft’s global leadership has handed temporary oversight of the Israeli office to Microsoft France, a move described in the report as an unusual arrangement.
The departures followed a probe triggered by pressure from both inside and outside the company over Microsoft’s cloud contracts with Israel’s Ministry of Defense. Israeli business newspaper Globes, which first reported the developments, said investigators flew into Israel weeks earlier to examine the sales department’s dealings with the ministry.
The investigation found usage patterns that violated Microsoft’s terms of service, along with conduct that sources described as lacking full transparency toward global management.
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Unit 8200 Report Put Contracts Under Scrutiny
The controversy is traced to reporting published in August 2025 by The Guardian and +972 Magazine, which said that Unit 8200, described there as Israel’s elite military intelligence agency, had used Microsoft’s Azure platform to store millions of intercepted Palestinian phone calls from Gaza and the West Bank.
The data was stored primarily on servers in the Netherlands, allowing intelligence officers to replay civilian calls at scale. Microsoft vice president Brad Smith is quoted as saying, “We do not provide technology to facilitate mass surveillance of civilians.” The company subsequently terminated Unit 8200’s cloud access in September 2025.
However, according to Globes as cited in the screenshots, Unit 8200 was not the only concern. The investigation reportedly found that other Israeli Ministry of Defense units had also been using Azure in ways that crossed Microsoft’s internal limits, and that some of this activity had been routed through European servers, exposing the company to possible scrutiny from European Union regulators and GDPR related legal risk.
Israel Position Seen as Especially Sensitive
Microsoft’s position in Israel is more complicated than that of Amazon and Google because when Israel awarded its Nimbus government cloud contract in 2021, Microsoft was left out. Amazon and Google won the deal and agreed to build data centres in Israel, meaning defense related data would remain inside the country and largely outside the reach of European regulators.
Microsoft, by contrast, had no such arrangement, and any ministry data flowing through Azure was landing on servers in Europe. This made the company more vulnerable to regulatory pressure. Haimovich, who joined Microsoft in 2019 and was credited with building the Israeli business into one of the company’s fastest growing global markets, was reportedly summoned by the investigation team after it visited the company’s offices near Tel Aviv.
The timing is described as sensitive because Microsoft and Israel’s Ministry of Defense are due to renew their contract later this year. According to Globes, both sides remain interested in continuing the relationship, though on a smaller scale, while much of the defense computing workload has already shifted to Amazon and Google’s Israeli infrastructure.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
