Nearly lost in what I recently called the greatest quarter the tech industry’s ever seen was Satya Nadella’s fairly casual mention that Microsoft’s security business did more than $10 billion in revenue in 2020.
No doubt there was intense competition within Microsoft for air time during the Jan. 27 earnings call as the company delivered a phenomenal quarter with commercial-cloud revenue up 32% to $16.7 billion, Azure revenue growth of 48% and Dynamics 365 growth of 39%.
To put those big numbers in context, consider this: Microsoft Wallops Amazon in 2020 Cloud Revenue; Bigger than AWS and Google Cloud Combined.
But even amid the slew of eye-popping numbers for Microsoft’s fiscal Q2, $10 billion is still a very large number. And while it’s certainly possible that Microsoft has in the past disclosed revenue figures for its security business, this is the very first time that I’ve noticed such a reference.
I don’t believe this $10-billion figure is 100% cloud, but Nadella portrayed his massive security business as largely a cloud offering. And I don’t think it’s an accident that of the dozen or so enterprise product segments he discussed on the call, security was the very last one, tucked in right before Gaming.
Hence my reference in the headline to Microsoft’s security business being something of a secret success for Microsoft. I’m by no means saying that security’s not a big concern for Microsoft—clearly, it’s a huge one, to the tune of more than $10 billion in 2020. But while Nadella has spoken regularly and emphatically about the need for relentless focus on cybersecurity, he has rarely talked about the revenue Microsoft generates in that segment.
Here’s how Nadella described Microsoft’s security business on the Jan. 27 earnings call at the tail-end of his overview of about a dozen product categories within Microsoft.
“The recent SolarWinds attacks are a stark reminder of how critical security is to our customers. We are focused on ensuring organizations deploy and maintain a Zero Trust architecture.
“Our end-to-end security capabilities, inclusive of identity, security, compliance, and management – across all clouds and all client platforms – have been key as we help customers strengthen their security posture and mitigate impact,” Nadella said.
He then offered 6 compelling stats about that low-profile but high-impact business.
- Eight trillion signals per day. “Beyond our products, our operational security posture and threat intelligence, which analyzes 8 trillion signals each day, help customers defend themselves.”
- Massive growth in 2020. “Over the past 12 months, our security business revenue has surpassed $10 billion, up more than 40 percent,” Nadella said. “This milestone is a testament to the deep trust organizations place in us, and we will continue to invest in new capabilities across all our products and services to protect our customers.” Nadella then cited “strong momentum” across all four categories of Microsoft’s security business: identity, security, management, and compliance.
- Identity. “Azure Active Directory has more than 425 billion monthly active users.”
- Security. “Microsoft Defender blocked nearly 6 billion threats last year alone.”
- Management. Nadella cited “triple-digit growth” in the number of devices managed by Microsoft Intune.
- Compliance. In 2020, the number of customers using those solutions grew by 90%.
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