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The company’s cybersecurity business is growing, but CEO Satya Nadella warned that customers, in an uncertain economy, are exercising caution.
Microsoft surpassed $20 billion in revenue from its cybersecurity business over the past 12 months, double the total reached just two years ago.
CEO Satya Nadella shared the revenue milestone during the company’s fiscal second quarter earnings call last week.
After acquiring a number of niche security vendors, Microsoft has positioned itself as one of a handful of security companies that can claim an end-to-end platform for the enterprise customer.
“Customers are consolidating on our security stack, in order to reduce risk, complexity and cost,” Nadella told Wall Street analysts during the call.
Nadella claims Microsoft is the only company with integrated tools spanning identity, security, compliance, device management and privacy. He told analysts the company is taking market share across all the major categories and said the number of organizations with four or more workloads has increased 40% year-over-year.
U.K. sports and lifestyle retailer Frasers Group consolidated its security business under Microsoft after working with multiple vendors, according to Microsoft.
The company, which has expanded over the years through numerous acquisitions, unified its IT security with Microsoft over security rivals like CrowdStrike and SentinelOne.
He also cited firms like Astellas Pharma, Ferrovial and University of Toronto moving to Microsoft Sentinel for the company’s integrated extended detection and response and security information and event management capabilities.
In 2022, rival security firms like Palo Alto Networks and CrowdStrike noted that enterprise customers were looking to consolidate security vendors in order to decrease complexity. Macroeconomic concerns were starting to impact customer decision making, they said.
During the call, Nadella warned that customers overall are exercising caution because of macroeconomic conditions.
The company earlier this month announced plans to cut 10,000 jobs companywide, representing about 5% of its overall workforce. It was not immediately disclosed how those job cuts would break down across various units of the company.
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CISOs are up against talent shortages and retention concerns amid an increasingly sophisticated threat landscape.
Enterprise cybersecurity is navigating market turmoil and vendor consolidation. Here’s what experts expect to happen to the industry in 2023.
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