There is ‘a big crisis right now’ for cybersecurity

Microsoft (MSFT) is officially a cybersecurity giant. For the first time on Tuesday, Microsoft disclosed revenue from its various security offerings as part of its quarterly results – $ 10 billion over the past 12 months.

This equates to a 40% year-over-year jump in the growing security business, accounting for around 7% of the company’s total revenue for the previous year.

“We waited in a certain way [until] this step to show the depth, breadth and scope of what we do, ”Microsoft CEO Satya Nadella told Yahoo Finance in an interview on Wednesday, a day after the release of its quarterly earnings report.

“And you know, [there’s] a lot of work to do, but we are investing very heavily because guess what? You know, in 10 years we’ll be talking about it again as the technology becomes uniform [a deeper part] of our lives in our society in all critical industries.

The $ 10 billion figure comes from security-related revenue generated by services such as Microsoft Azure Active Directory, Intune, Microsoft Defender for Endpoint, Office 365, Microsoft Cloud App Security, Microsoft Information and Governance, Azure Sentinel, Azure Monitoring and Azure Information Protection.

Each of these make up what Microsoft calls its Intelligent Cloud and Productivity and Business Processes segments. These global segments generated $ 14.6 billion and $ 13.4 billion in revenue, respectively, in the company’s second quarter of fiscal 2021.

“What we have built is very useful in times of crisis and there is a big crisis right now,” Nadella said. “But you kind of have to build it all over a period of years, if not decades, and then keep it going not just through product innovation but also, I would say, practicing every day.

The announcement follows Microsoft’s involvement in uncovering the scale of the massive SolarWinds cyberattack in December, which hit private companies like cybersecurity firm FireEye (FEYE) and government agencies, including government departments. Department of Treasury, Commerce and State, as well as the National Nuclear Security Administration. and the Department of Homeland Security.

The story continues

Microsoft itself was also hacked, although no customer data was breached. A Reuters report said that as part of the National Telecommunications and Information Agency’s hack, Microsoft’s Office 365 software was attacked, allowing intruders to monitor agency emails for months. . Microsoft, however, said at the time that it had not identified any vulnerability in its cloud or in its Office software.

While affected by the attack, Microsoft also worked with the government and customers to help determine the extent of the hack.

“I was very proud that we became the first responders to this attack,” Vasu Jakkal, Microsoft vice president of security, compliance and identity marketing, told Yahoo Finance.

“We were the defenders that other defenders looked to. We were working with FireEye and across the public and private sectors, we were like, “What do we do and how do we protect our world from this? ” she says.

Part of Microsoft’s ability to respond to hacking is tied to what’s called the “zero trust” architecture, Nadella explained. Essentially, this means that a company’s cybersecurity capabilities always function as if there has been some breach of some sort. It’s a defense against being left flat when a new hack arises that you can’t protect yourself against.

“One aspect of Microsoft’s investment isn’t just the investment in security – which is substantial when you look at Defender or Sentinel or Azure Active Directory and the list goes on – but it’s that capability. to take all of our investments in AI. and data and infrastructure and implement them for security, ”Nadella said. “And I think that’s what makes us quite unique.”

Working from home adds to business security needs

The SolarWinds hack came as the coronavirus pandemic prompted many companies to allow their employees to work from home, which introduced a new attack vector for hackers. When working from your desk, you are hopefully connected to a secure connection that can monitor things like malware or other weird network activity.

At home, however, you use your own network, which adds a wrinkle to your employer’s ability to protect himself. It wouldn’t take much for you to download malware to your home computer and then accidentally send that software to your company systems when you connect to its network to update a spreadsheet or download a report.

“Safety has to be built in at every point,” Jakkal said. “It can’t be an afterthought,”

Microsoft says it currently protects more than 400,000 customers in 120 countries, including 90 Fortune 100 companies. The tech giant divides its security offerings into four categories: security, compliance, identity and management.

Part of this includes security not only for devices powered by Microsoft, but also for those running Apple (AAPL) iOS and macOS and Google (GOOG, GOOGL) Android, as well as for products running on competing cloud platforms. like Amazon (AMZN) Amazon Web Services. and Google’s Google Cloud Platform.

“There has to be a really different approach to creating a cybersecurity solution for customers,” Nadella said.

“In what is an interconnected world, it is not a question of a one-off solution, it is about having, I would say, an architectural approach, which must then be reinforced every day.

As cloud services continue to grow and Microsoft’s involvement in the industry grows alongside, protecting the customers who use these services will become increasingly important.

“It’s not just a transformation to keep you in business. You need to have this digital control plane, not just for your employees so they can log into their PCs from their homes and be on Teams calls, ”Nadella said.

“Your manufacturing plant must continue where engineers, operational data all have to be reasoned. This is the transformation that I think we are seeing accelerating. “

Of course, hackers and cybercriminals will continue to hit businesses, no matter what company they have to protect them. But with the continued growth of cloud computing and an expanded home work environment, Microsoft has everything to gain as a player in the cybersecurity industry.

Subscribe to the Yahoo Finance Tech newsletter

Do you have any advice? Email Daniel Howley at [email protected] over via encrypted mail to [email protected]and follow him on Twitter at @DanielHowley.

More from Dan:

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, Youtube, and reddit.