Acceleration Economy Cloud Wars

Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.

In today’s Cloud Wars Minute, I analyze Microsoft’s reaction to a cybersecurity breach in China and what it says about the company’s culture and how it needs to shift.


00:01 — Microsoft suffered a cybersecurity intrusion in China last year. A federal watchdog report came out about it. I am saying that this is a crisis. It’s a disaster in some ways for Microsoft. Can Satya Nadella help overcome this and fix this?

01:07 — This is the biggest challenge he’s faced. This report came out from the Cyber Safety Review Board. It’s a public-private combination of people. It looked at an incident involving an intrusion into the Microsoft Exchange System. It’s believed this was organized and carried out by members of the Chinese Communist Party or an affiliated group.

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02:07 — There was extremely deep penetration access to some government officials’ email and so forth. The report said the group could access just about any exchange system in the world. The report indicated that it wasn’t just failed technology here that prevented this. It was failed processes, a failed culture, and a lack of investment or concern.

03:01 — I want to say also, as somebody who’s been around this industry for four decades, this is the most devastating set of criticisms, concerns, and charges that I have ever seen leveled against a major technology company. If you’re a customer, I think you have to be asking, can I trust Microsoft, right?

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04:03 — If I’m Satya Nadella, I have to figure out now how am I going to win back the trust of customers and partners in the marketplace overall. The report said Satya Nadella has to get after this. The board has to be all over this and make it a top priority. It said they’ve got to reset the cultural outlook and ensure that senior executives at Microsoft are held accountable for this.

05:00 — It’s going to be fascinating to see in a few weeks later this month, or perhaps the first few days of May when Microsoft releases its quarterly earnings, what Satya Nadella says about this. He might make it the top thing that he discusses in his opener or he might make it one of the things that leads in as he goes through the different product categories within Microsoft.

06:15 — Anybody involved in this line of business, I encourage you to at least take a look at that report. Not just for what it says about Microsoft, but the issues it raises about how in the AI era this whole notion of cybersecurity has reached just a level of significance and importance that, as important as it has always been, it’s even more so now.

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