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Microsoft Security: 5 Big Statements From Satya Nadella

Nadella touted Microsoft’s latest momentum in its cybersecurity business during the company’s fiscal fourth-quarter earnings call.

Microsoft is seeing “accelerated demand” for its “end-to-end” cybersecurity solutions, which have gained recognition from analysts in more categories than any other vendor, CEO Satya Nadella said Tuesday during the company’s quarterly call with analysts.

Nadella’s comments during the call were another indicator of the increased focus Microsoft is bringing to cybersecurity at the moment, with customer demand rising rapidly for security solutions and Microsoft itself ensnared in high-profile hacks such as the SolarWinds breach and an attack on IT distributor Synnex this month.

[Related: Microsoft: Our ‘Holistic’ Approach To Security Is Superior]

Nadella used his keynote at the Inspire 2021 partner conference this month to make the case that Microsoft is the one and only vendor that offers such a comprehensive approach to security—and that trying to integrate different point solutions is outdated and insufficient.

Nadella echoed those sentiments on Tuesday when he discussed Microsoft’s results from the fourth quarter of its fiscal 2021, ended June 30.

What follows are the five biggest statements from Nadella on Microsoft’s security business during the company’s Q4 call.

“Accelerated Demand”

During the call, Nadella touted the benefits of a zero trust security approach, based around the principle that no user should be trusted by default since they could be compromised.

“With the cybersecurity landscape more complex than ever, it’s never been clearer that every organization will need to deploy and maintain a Zero Trust security architecture,” Nadella said during the call, according to a transcript posted on Microsoft’s website.

“This is driving accelerated demand for our integrated, end-to-end solutions spanning identity, security, compliance, and device management, across all clouds and all platforms,” Nadella said.

Underpinning Microsoft’s security approach are solutions such as Azure Active Directory identity authentication, which runs across the Microsoft cloud platforms including Microsoft 365, Azure, Dynamics 365 and soon Windows 365.

Key capabilities include Microsoft 365 Defender endpoint protection, the Microsoft Defender for Identity cloud security solution and the Azure Sentinel SIEM offering.

Nadella said that one indicator of Microsoft’s security strength is the recognition the company has received from analysts.

“No other vendor is recognized by analysts as the leader in as many categories,” he said.

Customer Growth

The growing strength of Microsoft’s security business has led to increased adoption among customers, Nadella said on Tuesday.

“This is reflected in our share gains – with nearly 600,000 organizations, including FedEx, Nestle, NTT, and Volkswagen – using our security offerings across Azure and Microsoft 365,” he said. “We saw a 70 percent increase in the number of small and medium business customers.”

Microsoft’s momentum around security is also “reflected in our sales growth – with annual revenue continuing to increase 40 percent year over year,” Nadella said.

Acquisition Spree

Microsoft has also acquired three cybersecurity companies in 2021 so far, most recently with the acquisition this month of privileged access startup CloudKnox Security.

Microsoft said that CloudKnox will help provide customers with visibility into privileged access, right-size permissions and consistently enforce least-privilege principles with the aim of reducing risk.

This month, Microsoft also announced a deal to acquire attack surface management firm RiskIQ, reportedly for $500 million, while the company acquired IoT security vendor ReFirm Labs in June.

“We are going further to protect organizations, and our recent acquisitions of CloudKnox, ReFirm Labs, and RiskIQ bolster our security capabilities in key areas, including identity management, IoT, and threat intelligence,” Nadella said during the quarterly call on Tuesday.

‘New Franchise’

During the call with analysts, Nadella also pointed to security as one of the “new franchises” that is driving growth in its business, even as its core cloud businesses such as Azure and Office 365 continue to surge.

“We continue to grow new franchises for Microsoft in large and growing markets,” Nadella said. “In the past three years alone, gaming, security and now LinkedIn have all surpassed $10 billion in annual revenue.”

During Microsoft’s fiscal Q4, revenue climbed 21 percent year-over-year to reach $46.15 billion.

More Security Wins

Nadella and Microsoft CFO Amy Hood mentioned several other wins in the Microsoft security business during the quarterly call Tuesday:

- “Across Microsoft 365, we’re seeing double digit year-over-year seat growth in every segment – from frontline and small business, to enterprise. Leading companies like Bayer, Siemens, and Vodafone all chose our premium E5 offerings for advanced security, compliance, voice, and analytics,” Nadella said.

- “Demand for Microsoft 365, particularly for security, compliance, and voice, drove strong E5 momentum again this quarter,” Hood said.

- “In our per-user business, the enterprise mobility and security installed base increased 29 percent to over 190 million seat,” she said.

- “Epic Games, Motorola Solutions, and Volkswagen’s software group all chose GitHub Advanced Security this quarter to help secure their code,” Nadella said.

Looking ahead, for Microsoft’s Windows commercial products and cloud services business, “continued demand for Microsoft 365 and our advanced security solutions should drive healthy double-digit growth,” Hood said.

Central to Nadella’s argument about Microsoft’s security approach is that because Microsoft offers an integrated and “end-to-end” solution for security, that dramatically reduces complexity from the need to tie together disparate security products.

At Inspire, Nadella took direct aim at the approach of trying to integrate security solutions from multiple vendors as a way to protect customers.

“Our ambition is to help every organization adopt a zero trust architecture, while also reducing the complexity, cost and risk created by stitching together point solutions,” Nadella said during his Inspire keynote.

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