Microsoft says it will quadruple cybersecurity spending to $20B over five years, spend $150M to help federal, state, and local governments improve security
Todd Bishop / GeekWire :
Context & Ripple Effects
Microsoft had already turned security into a major business, reporting more than $10B in annual cybersecurity revenue earlier in 2021, after building a dedicated cyber-defense and enterprise-security organization in 2015. The new five-year commitment pairs a larger internal security outlay with $150M directed at public-sector security improvement.
First-order effects
- Microsoft commits $20B over five years to cybersecurity and allocates $150M to help federal, state, and local governments improve security.
- Government security teams receiving the $150M gain a Microsoft-backed source of support while Microsoft deepens its direct engagement with public-sector buyers.
Second-order effects
- Cybersecurity rivals competing for government accounts face a Microsoft with a larger security investment budget and a more visible role in assisting public agencies.
- Microsoft can reinforce its security offerings with spending at a time when cybersecurity was already a $10B-plus revenue line, tying product development and government support more closely together.
Third-order effects
- If Microsoft sustains the combined investment-and-assistance model, large cloud and software vendors will compete for public-sector security positions through operational support as well as product sales.
- Public-sector security work becomes a more consequential route for platform vendors to build long-term security relationships with government customers.
The trend: Cybersecurity is becoming a strategic platform business in which major vendors use large product investment and public-sector support to expand their role in government security.