- Microsoft is beefing up its security services offerings to go along with its technology products.
- Security is the fastest-growing broad product category for Microsoft.
Microsoft's security business is growing faster than any of its main products, and now the company is adding heft to its offerings with three new services designed to help organizations spot and respond to cybersecurity incidents.
Microsoft is among the leaders in cloud software and infrastructure, which means its technology is already the backbone for many businesses of all sizes. That puts the company in position to not only make security software available to its client base, but also offer consulting-oriented services in a market where demand far exceeds supply.
The investment comes as organizations ramp up their security spending to manage the increased threats of ransomware attacks and network hacks. Last year, Microsoft and other technology companies pledged to help fill about 500,000 cybersecurity jobs in the U.S., and Microsoft CEO Satya Nadella said annual research and development spending in cybersecurity would jump to $4 billion from $1 billion.
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Security already represents a $15 billion annual business for Microsoft, and in 2021 it increased faster than any other significant product or service the company sold.
Vasu Jakkal, a Microsoft corporate vice president focused on security, told CNBC that a big part of Microsoft's added spending is on people.
"We're just expanding the scale because of the demands we are seeing," Jakkal said.
Among the new products being launched is Microsoft Defender Experts for Hunting. It will involve Microsoft engineers flagging issues they find in clients' devices, Office 365 productivity software installations, cloud applications and identity programs, for $3 per person per month. The launch will put Microsoft in more direct competition with pure-play security software companies like CrowdStrike.
There's also Microsoft Defender Experts for XDR, which costs $14 per person per month. It's a labor-heavy service that tasks Microsoft employees with helping companies take action on threats. That type of work is done by a variety of companies today, including the big four accounting firms.
The third new offering is Microsoft Security Services for Enterprise, which includes an even broader set of people-driven services.
Craig Robinson, an analyst specializing in security at IDC, said Microsoft is poised to gain market share in managed security services.
"This whole area is growing in double digits," Robinson said, citing the talent shortage.
One of Microsoft's top cloud competitors, Google, is also looking to grow in the space. In March, Google announced its intent to acquire Mandiant for $5.4 billion. Bloomberg reported in February that Microsoft had been in talks to buy Mandiant, which for years has assisted government agencies and companies with breaches.
With its new services, Microsoft now has to scale up to meet demand.
"I'm sure there's 1,000 openings at Microsoft right now, at least in security," Robinson said.