Nadella: Microsoft's cybersecurity offerings pulling in $10B/yr

Yahoo Finance's Dan Howley joins Kristin Myers to break down his interview with Microsoft CEO Satya Nadella, following the tech giant's stellar second quarter earnings report.

Video Transcript

KRISTIN MYERS: I want to bring on Yahoo Finance's Dan Howley now to share with us a conversation he just recently had with Microsoft CEO, Satya Nadella, after yesterday's earnings report where they blew away expectations for their second fiscal quarter. Hey, Dan. How did that conversation go?

DAN HOWLEY: Hey, Kristin. That's right. We spoke to Satya, basically, a few minutes ago talking about one of the big breakouts of Microsoft's earnings report. And that is that its cyber security tools, which are part of its intelligent cloud and its products business, are worth $10 billion now. So it's a $10 billion a year business within those different business segments.

And it's growing 40% year over year. And when I talk to him, I said, how do those investments work? Where did this sense of turning this around, as far as cyber security goes? He mentioned that they had so many different pieces of AI, and different tools that they were using internally to protect themselves, that they then decided that they were going to push that out to their own customers.

And so, that's what Microsoft is doing. You'll remember that there was the solar winds attack in December. Microsoft was kind of instrumental in helping people understand the breadth and scope of that attack, which hit several major government agencies, as well as big name firms.

And so, what Microsoft was able to do was look at its own customers and determine how they were hit and where it was coming from. So they said that they get up to 8 trillion different signals a year. They get 6 billion different pieces of malware that they're able to stop.

So this is a company that really, obviously, wants to push further into this. And it only makes sense, considering their strength in the cloud industry. You can't operate a cloud business without very good cybersecurity. And that seems to be what they're doing here.

KRISTIN MYERS: Absolutely. A fascinating conversation, which I think you will have on YahooFinance.com shortly, correct? All right.

DAN HOWLEY: Yup. You got it.

KRISTIN MYERS: So everyone can check out that conversation that Dan had with Microsoft CEO, Satya Nadella, shortly on YahooFinance.com Thanks so much, Dan.