Last week, Microsoft Israel, the local marketing and sales office of the US software giant, announced the departure of Country General Manager Alon Haimovich after four years in the job. Behind the dry announcement is major controversy.
Haimovich left his position after an investigation by Microsoft's global management into Microsoft Israel's work with the Defense Ministry, amid concerns that the company's code of ethics had been violated. Several managers in Microsoft Israel's governance department have also left their positions.
Microsoft Israel is without a country general manager, and Globes has learned that global management has decided that, for the time being, Microsoft Israel will be managed directly by Microsoft France.
Several weeks ago, an investigation team from Microsoft arrived in Israel to examine the center's activities, particularly the work of the sales department responsible for working with Israel's Defense Ministry, Globes has learned. Haimovich was also summoned to the investigative committee due to a claim that Israel's management did not act with full transparency regarding how the Defense Ministry uses Microsoft's systems.
It is believed that Microsoft was concerned that, under the contract with the Defense Ministry , there were units operating in a non-transparent way that violated its terms of use and exposed it to legal and regulatory risks in Europe. Since Microsoft is not a franchisee in the official government cloud tender "Nimbus", part of its use by the Defense Ministry, according to the Guardian, is performed by servers on European soil.
Microsoft investigates Defense Ministry ties
The dispute with IDF Unit 8200 is only the tip of the iceberg
Unlike the Nimbus franchisees, Google and Amazon, Microsoft has not agreed to the extensive use of its technology by security forces in Israel or other countries, such as gathering data about users and using that information to harm those involved in terrorism.
In September 2025, Microsoft decided to unilaterally terminate the usage agreement with IDF intelligence Unit 8200 after an article published in the UK newspaper The Guardian, which claimed that the unit was collecting information about Palestinians for the purpose of fighting terrorism. However, Unit 8200's work was apparently only the tip of the iceberg, and following the investigation and protests that erupted in its wake, Microsoft's offices in Redmond, Washington, continued to investigate with Haimovich and his team, using additional units
The investigation revealed not only usage patterns that the company claims violate Microsoft's terms, but also conduct that they allege was not transparent towards global management, and damages trust in the Israeli branch's management, and in a way that violated the Defense Ministry 's trust in working with Microsoft, according to a source in the software market familiar with the affair. Microsoft Israel, which until now was subordinate to the regional management in Dubai, has now been transferred to the responsibility of Microsoft France until a permanent country general manager is appointed for Microsoft Israel.
In May 2025, Microsoft's annual developer conference was held in Seattle, where anti- Israel demonstrations caused a stir at the company, when about 15,000 current and former employees protested under the slogan "No Azure (Microsoft's cloud service) for apartheid" to end contracts with Israel's Defense Ministry . Most of the important speeches on the morning of the conference were interrupted by protesters, who waved signs condemning Israel, and called out anti- Israel remarks, even during CEO Satya Nadella's speech.
In August, protesters broke into the office of company president Brad Smith. Two of the employees were fired, but Smith later admitted that an investigation was underway into Israel's use of the company's systems.
"Microsoft is not a government or a state, we are a private company, and like any company, we decide what products and services to offer our customers," Smith wrote last September, shortly after "The Guardian" reported that the company was ending its work with Unit 8200.
"We decided to investigate the Guardian's claims about the IDF's use of Azure to store recordings of phone calls obtained through extensive and mass surveillance in Gaza and the West Bank, based on two principles: protecting privacy and preventing mass surveillance of citizens. We have applied this principle in every country in the world and have insisted on it repeatedly for more than two decades."
Despite the announcement about terminating work with Unit 8200 and the admission that an investigation was underway, pressure on Microsoft increased in the following months: According to US reports, the issue of contracts with Israel's Defense Ministry was also discussed at the annual shareholders' meeting in December 2025 and several pro-Palestinian organizations such as Amnesty International pointed out that some of the units are serviced by computer servers that, according to the Guardian, are in European countries, where privacy laws and surveillance of citizens are particularly strict. This was stressed; it was Microsoft's Achilles heel through which pressure could be exerted on it.
Earlier in December, Norway's sovereign wealth fund announced it would hold a vote on a shareholder proposal requiring Microsoft to publish a report on "the risks of operating in countries where there is a significant concern for human rights violations," without naming Israel.
Haimovich will end his role at a particularly sensitive time
Among the cloud giants, Microsoft is considered the most vulnerable to anti- Israel protests and allegations of the use made by the Defense Ministry on Azure, its cloud platforms, since it is the only company among the three major cloud companies that has not signed a special agreement with the Israeli government and the Defense Ministry.
The industry says that Haimovich, known as a prominent salesman in the government sector, was appointed country general manager, among other things, due to Microsoft's plans to retain and expand business with the government sector, despite not winning the Nimbus tender.
In 2021, Israel awarded Amazon and Google the Nimbus cloud tender, encouraging government bodies and public organizations to migrate to these services at the expense of Microsoft. In return, Amazon and Google pledged to establish service areas within data centers on Israeli soil to avoid exposing security or government data to foreign regulation.
It is also believed that Amazon and Google have signed agreements that allow the government to collect data more freely than the agreements Microsoft signs with its customers, and that include protections that make it difficult for them to unilaterally cancel agreements with the Israeli government and the Defense Ministry.
However, the Defense Ministry dragged its feet, and many agreements remained in place, including licenses for the Office desktop software package and the Windows operating system. Even after pressure from the Ministry of Finance, the Accountant General, and the Digital Division to migrate to Google's desktop software package, Workspace, it seems that the Defense Ministry is interested in maintaining relations with Microsoft, despite its unilateral halt to work with Unit 8200.
The termination of Haimovich and staff at Microsoft Israel comes at a sensitive time. The Defense Ministry is set to renew its contract with the software company at the end of this year, and both parties are reportedly interested in continuing it — albeit on a smaller scale. According to estimates, defense computing units have already transferred a significant part of their cloud infrastructure to Amazon and Google in recent months, leaving Microsoft with mainly simple applications, such as desktop software.
Microsoft has declined to respond to this report, citing its announcement last week that Haimovich will step down from his role at the end of the month after four years as country general manager.