Microsoft Strategic Initiative Charls Yang, Yining Xie, Andres Hoberman, Kyle Pauling Good afternoon everyone. My name is Charles, this is Lizzie, Andres, and Kyle. Today, we are going to present a strategic initiative plan for microsoft for the 2018 fiscal year and beyond. Cybersecurity The topic we want to focus on and bring to the business’s attention today is cybersecurity. For those who are unfamiliar, Cybersecurity refers to a set of techniques used to protect the integrity of networks, programs, and data from attack and unauthorized access. Cybercrime Portfolio Cyber attacks Security vulnerabilities Disclosure of personal data Network outages and data loss Disruption of online services All threaten long-term customer loyalty, security, firm revenue, and firm reliability Activities that cybersecurity tries to prevent include but are not limited to cyber attacks, etc etc. which all threaten customer relations, security of our firm, our revenue, as well as firm reliability. Increasing Prevalence The reason why cybersecurity has come on our radar now is because of the steady increases of attacks in the last few years. The two biggest reasons for this are the boom of the internet of things as well as the underground market. When we implement software in all areas of our life, there will be more opportunities for cybercriminals to target. Cybercrime Costs Cybersecurity spending to exceed $1 trillion from 2017-2021 Cybersecurity Costs Average cost of ~$12 – $17M per incident Data Breaches Overall costs to hit $6 trillion annually by 2021 Cybercrime Costs $325M in damages caused by global ransomware Damaged caused by global ransomware to surpass $5B in 2017. A 15x from 2015 Global Ransomware Cybersecurity- Our Business Segments Personal Computing Windows OS 82.96% market share Dependence on the OS by customers like the U.S. Department of Defense or the biggest banks in the world like JP Morgan Chase A bug that restricts computer usage or alters functions could cause damage to millions of devices and users’ information Apple macOS password glitch this week; hurts their sales Intelligent Cloud Azure, Dynamics 365 Links multiple networks and is the backbone of the firm’s infrastructure Stores business and personal data Leaks or hacks can expose personal banking or other sensitive information Late 2010, Microsoft cloud breach allowed anybody to see employee information Productivity & Business Processes Office, Exchange, Skype, Outlook, LinkedIn, ERP, CRM Office (Commercial and 365) Over 1 billion users Excel contains financial information that can benefit hackers Powerpoint can contain interfirm information that is not public yet Office 365 breach June 2016 57% of users affected Ransom note that also included an audio warning Next Steps The Solution Acquire new resources to boost cyber security through: Organic Internal departmental growth Acquisitions Complete control of external resources Alliances P ...

1. Microsoft Strategic Initiative
Charls Yang, Yining Xie, Andres Hoberman, Kyle Pauling
Good afternoon everyone. My name is Charles, this is Lizzie,
Andres, and Kyle. Today, we are going to present a strategic
initiative plan for microsoft for the 2018 fiscal year and beyond.
Cybersecurity
The topic we want to focus on and bring to the business’s
attention today is cybersecurity. For those who are unfamiliar,
Cybersecurity refers to a set of techniques used to protect the
integrity of networks, programs, and data from attack and
unauthorized access.
Cybercrime Portfolio
Cyber attacks
Security vulnerabilities
Disclosure of personal data
Network outages and data loss
Disruption of online services
All threaten long-term customer loyalty, security, firm revenue,
and firm reliability
Activities that cybersecurity tries to prevent include but are not
limited to cyber attacks, etc etc. which all threaten customer

2. relations, security of our firm, our revenue, as well as firm
reliability.
Increasing Prevalence
The reason why cybersecurity has come on our radar now is
because of the steady increases of attacks in the last few years.
The two biggest reasons for this are the boom of the internet of
things as well as the underground market. When we implement
software in all areas of our life, there will be more opportunities
for cybercriminals to target.
Cybercrime Costs
Cybersecurity spending to exceed $1 trillion from 2017-2021
Cybersecurity Costs
Average cost of ~$12 – $17M per incident
Data Breaches
Overall costs to hit $6 trillion annually by 2021
Cybercrime Costs
$325M in damages caused by global ransomware
Damaged caused by global ransomware to surpass $5B in 2017.
A 15x from 2015
Global Ransomware
Cybersecurity- Our Business Segments

3. Personal Computing
Windows OS
82.96% market share
Dependence on the OS by customers like the U.S. Department
of Defense or the biggest banks in the world like JP Morgan
Chase
A bug that restricts computer usage or alters functions could
cause damage to millions of devices and users’ information
Apple macOS password glitch this week; hurts their sales
Intelligent Cloud
Azure, Dynamics 365
Links multiple networks and is the backbone of the firm’s
infrastructure
Stores business and personal data
Leaks or hacks can expose personal banking or other sensitive
information
Late 2010, Microsoft cloud breach allowed anybody to see
employee information
Productivity & Business Processes
Office, Exchange, Skype, Outlook, LinkedIn, ERP, CRM
Office (Commercial and 365)
Over 1 billion users
Excel contains financial information that can benefit hackers
Powerpoint can contain interfirm information that is not public
yet
Office 365 breach June 2016
57% of users affected
Ransom note that also included an audio warning

4. Next Steps
The
Solution
Acquire new resources to boost cyber security through:
Organic
Internal departmental growth
Acquisitions
Complete control of external resources
Alliances
Partial control of external resources
Organic
New hirings and large investments in top intellectual capital
from universities, cyber security firms

5. Develop software with top security measures in every step of
the production chain, including post-purchase
Less expensive, but takes longer to acquire new resources than
Acquisitions or Alliances
Past Acquisitions
Hexadite
Go from alert of breaches to remediation in minutes
$100 million
Secure Islands
Advanced data security solutions
Adallom
Cloud security
Emphasis on Office 365
All have kept MSFT at a high standard of security
But must keep strengthening to sustain more attacks

6. Future Acquisitions
Move capital into long term investment for the future of the
firm
Acquire small cybersecurity firms and integrate more, which
will have additional costs (like they have in the past)
Acquire established cybersecurity firms for large amounts of
capital and let them keep their independence, while focusing
exclusively on Microsoft
Symantec, LifeLock, Fortinet
Alliances
Partner with top cyber security firms in response to the
developing needs

7. IBM Security
Customized enterprise security portfolio to disrupt new threats,
deploy security innovations and reduce the cost and complexity
of IT security
Parent company, IBM, is one of MSFT’s major competitors
MSFT has partnered with competitors in the past (Apple)
Alliance governance can be through equity (like they did with
Apple), a contract, or some combination
Alliances
Cisco
Host of products and services for threat detection and
prevention
Cloud security, Virtual Private Networks, Email and server
security
Sophos
Sophos Mobile 7 - latest of its Enterprise Mobility Management
solutions
BAE Systems
Operates in 5 areas: electronic systems, cyber and intelligence

8. systems, intelligence and security systems, applied intelligence,
and platforms and services
Offers flexible solutions for Microsoft’s different needs
PARTS M&M Framework
People - Organic approach = MSFT only; Acquisition or
Alliance = MSFT + others
Activities - At all levels of operations from code development
to server maintenance to IT infrastructure and networking
Resources - Human and intellectual capital, corporate capital,
network and technological expertise
Timing - Now and always ongoing, cyber threats are constantly
evolving
Symbols - Trust in competitors if an alliance is formed while
acquisitions demonstrate market power and MSFT’s resources
Measurements - # of attacks defended, time online services are
down, data lost
Milestones - After an attack to review damages

9. Our Strategic Initiative Plan
Partner with IBM Security
Through a contractual agreement and equity purchase
Demonstrate commitment and trust in the partnership
Combined resources can offer the most secure services and
products
Make more acquisitions and alliances as needed in the future
since the threat is growing
Appendix
Source: Symantec