Microsoft might lose its government customers due to security breaches

Microsoft’s government customers have moved some of their data to the Redmond-based tech giant’s competitors, according to a new report published by The Information.

Google’s cloud services, and Amazon Web Services now host some of the data previously hosted by Microsoft, but government customers, such as the State Department have chosen to move away data after the company was the target of threat actors, resulting in the institution asking itself if it’s safe to trust Microsoft.

Even more, the report also states that the State Department is preparing to close a 7-year deal of about $10 billion with an unnamed company in exchange for cloud, security, and productivity services. However, the institution will continue using Microsoft apps due to its support for a diverse ecosystem.

It’s worth mentioning that Microsoft is the State Department’s most important and biggest cloud services provider, and the deals the Redmond-based tech giant made with the institution included various bundles and a greatly discounted price, which is making the State Department quite dependent upon Microsoft’s services.

If the deal is made, and the institution will indeed start the process of moving away its data to another provider, this could set a very risky precedent for Microsoft, where the company would start to lose its government customers all across the world.

The UK Cabinet, another government institution, has also canceled a £9m deal with Microsoft recently, and although it still uses Microsoft platforms, the Redmond-based tech giant won’t be responsible for supervising the Microsoft 365 integration.

Microsoft is, indeed, one of the most popular targets for threat actors everywhere, and even though the company is fighting back with AI-powered tools, such as Copilot for Security, Russian, Chinese, Iranian, and North Korean threat actors are attempting to breach its security more than ever.

Microsoft’s platforms are now spared either: in 2022, alone, over 80% of its accounts were hacked; Microsoft’s customers know the risk, and they are considering safer alternatives. If the report’s claims are true (the report also contains emails from Microsoft executives to US government officials), then Microsoft is in a dire position of losing its most valuable customers, and ultimately, its reputation.