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For Microsoft, Government Data Breaches a Chance to Pivot into Cyber

Microsoft CEO Satya Nadella

Microsoft CEO Satya Nadella // Richard Drew/AP

As the federal government reels from a massive data breach that may have exposed the personal information of 22 million people, one tech giant hopes this and other intrusions drum up demand for its cybersecurity products. 

For the Office of Personnel and Management, the hack has been a wake-up call, prompting an ambitious, governmentwide 30-day sprint to shore up cybersecurity practices such as implementing two-factor authentication for agency networks. But for Microsoft -- a federal contractor plagued by a barrage of security bugs, including one that made Windows computers vulnerable to the Stuxnet worm -- growing concern about virtual threats has created a rebranding opportunity and a chance to pivot into the cybersecurity market. 

Microsoft's chief executive came to Washington on Tuesday to talk up a suite of products dedicated to the detection of, and response to, cyberthreats. Addressing a conference of government customers, Satya Nadella described today's virtual environment as "perimeterless."

"Now we live in a world where the attacks can come from anywhere, the attack vectors can come from anywhere," he said. "The attackers themselves are a lot more sophisticated. It's dynamic and you're under constant attack."

To fight these threats, Microsoft plans to open a Cyber Defense Operations Center designed to protect customer data, with access to thousands of security and data analysts and developers. The company's new Enterprise Cybersecurity Group aims to offer cyber monitoring and threat detection, as well as security assessments, to customers.

During Nadella's keynote -- during which he described these and other security products and services -- an Azure product manager demonstrated some of Windows 10's newer features, such as authorization via facial recognition or fingerprint scans. Microsoft also plans to meet a high-level cloud security requirement for the Defense Department, according to a company blog post published Tuesday. 

Nadella's keynote appears to be part of a longer-term campaign to beef up the company's security offerings. The New York Times reported this week that Microsoft estimates spending on security-related initiatives now tops $1 billion annually, and its security workforce has increased by 20 percent in the past year. 

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