Apr 26, 2024 - Technology

Microsoft “doubling down” on cybersecurity

Microsoft CEO Satya Nadella speaks during CES 2024 in Las Vegas.

Microsoft CEO Satya Nadella speaks during CES 2024 in Las Vegas. Photo: Ethan Miller/Getty Images

Microsoft CEO Satya Nadella told analysts on an earnings call Thursday that the company is increasing its focus on cybersecurity.

Why it matters: Government officials and customers have been losing trust in Microsoft following a wave of recent nation-state cyberattacks targeting its products.

What they're saying: "Security underpins every layer of the tech stack and it's our No. 1 priority," Nadella said on a conference call with analysts. "We are doubling down on this very important work, putting security above all else, before all other features and investments."

Driving the news: The U.S. Cyber Safety Review Board released a scathing report this month saying a Chinese espionage campaign targeting Microsoft last summer was "preventable and should never have occurred."

  • The Verge reported Thursday that Microsoft's internal teams have also started prioritizing cybersecurity over new product development following a recent Russian hack of executives' email inboxes.

Zoom out: Continued growth in Microsoft's cloud business — fueled in part by the boom in AI — helped the software giant top sales and earnings expectations for the latest quarter, Axios' Ina Fried writes.

  • Microsoft's quarterly revenue was $61.9 billion, up 17% and ahead of estimates of around $60.8 billion.
  • Per-share earnings were $2.94, up 20% and well ahead of expectations of $2.82.
  • Overall, Microsoft's cloud business brought in $26.7 billion in revenue, up 21%.

Between the lines: Microsoft's competitors have been clamoring to chip away at the company's government contracts and cloud business.

  • Despite recent incidents, Microsoft remains the federal government's top cloud vendor, and the reset of its security culture is part of an effort to regain trust.

Flashback: In 2002, then-CEO Bill Gates embarked on his own initiative to prioritize cybersecurity in the company's products.

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