Is Microsoft 365 Secure Enough on Its Own?

Key Takeaways

• Microsoft 365 is secure by design, but on its own it does not fully protect a small business without extra configuration, policies, and user training.
• Most real-world breaches in 2023–2025 come from weak passwords, phishing and misconfiguration – not from Microsoft’s underlying platform failing.
• SMEs remain responsible for backups, access control and staff awareness, even if all email and files are in Microsoft 365.
• With the right setup (MFA, conditional access, backups, proactive monitoring) Microsoft 365 can form a strong security foundation for a small business.
• Configuration gaps, not sophisticated attacks, drive most incidents affecting small and medium sized organisations.

Is Microsoft 365 Secure Enough on Its Own?

Microsoft 365 is secure, but not secure enough on its own for a UK SME to rely on it without any extra controls. The platform provides a strong foundation, but businesses still need to configure it properly, train their users and add certain protections that Microsoft doesn’t enable by default.

What Microsoft 365 does well out of the box:

• Data encryption in transit and at rest
• Basic threat protection and spam filtering
• Secure Microsoft data centres with physical security and redundancy
• Regular security updates applied automatically
• Built-in malware protection for email attachments

What it does not do automatically:

• Enforce strong passwords or multi-factor authentication for every user
• Stop employees sharing sensitive data externally without controls
• Guarantee recovery from accidental deletion, ransomware or insider damage
• Monitor for suspicious behaviour and respond to threats
• Back up your data in a way that meets legal or contractual retention needs

Here’s a simple example: an employee receives a phishing email that looks like a Microsoft login page. They enter their credentials. The attacker now has access to their mailbox, OneDrive and Teams. They set up email forwarding rules to capture invoices and payment details. Microsoft 365 itself hasn’t “failed” – the data centres are secure, the encryption is working – but the business has still been breached.

This is why configuration, policies, and user awareness matter just as much as the platform itself.

What Security Does Microsoft 365 Actually Include?

Microsoft publishes long feature lists but these can be difficult to translate into practical terms. This section explains what protections you actually get, depending on your licence.

Core Built-in Protections (Business Basic, Standard, and Premium)

• Encrypted data – All data is encrypted at rest and in transit between your devices and Microsoft’s servers.
• Spam and malware filtering – Exchange Online filters spam and scans email attachments for known malware automatically.
• Sign-in monitoring – Microsoft logs all sign-in attempts and flags clearly suspicious activity.
• Secure Score dashboard – A built-in tool that shows your overall security posture and recommends improvements.
• Microsoft account protection – Basic safeguards against credential theft and brute-force login attempts.

Additional Protections in Business Premium and E5

Microsoft 365 Business Premium and E5 licences include more advanced tools:

• Microsoft Defender for Business – endpoint protection for laptops and PCs, launched in 2022, providing real-time threat detection
• Defender for Office 365 – safe links (scanning URLs in emails before you click) and safe attachments (sandboxing suspicious files)
• Conditional Access – rules that control who can access what, from where and under what conditions
• Intune device management – enrol and manage devices, enforce encryption and enable remote wipe for lost equipment

As of January 2026, Microsoft has expanded what’s included in lower licence tiers. Defender for Office 365 Plan 1 is now included in E3 licences, and URL checks are included in E1, Business Basic, and Business Standard plans.

The Shared Responsibility Model

Microsoft operates what they call a “shared responsibility” model. This means:

Microsoft operates what they call a “shared responsibility” model. This means:

• Microsoft’s responsibility: Securing the cloud infrastructure, physical data centres, core services and the underlying network
• Your responsibility: Securing identities (user accounts), devices, data and how information is shared

This is critical to understand. Microsoft protects the platform. You protect how your business uses it.

Many SMEs leave default settings unchanged, which reduces the real-world protection they get. The tools exist; they just need to be configured.

Where SMEs Still Get Caught Out Using Only Microsoft 365 Defaults

Most small business incidents happen because of gaps in configuration and behaviour, not because Microsoft 365 is a poor product. The platform is secure. The way most businesses use it is not.

Weak Identity Protection

This is the most common gap:

• Single-factor logins with reused passwords
• No multi-factor authentication (MFA) enabled
• No conditional access rules for logins from unusual locations or devices
• Legacy protocols (like basic authentication) still enabled, which attackers exploit

Identity has become the primary perimeter in 2026. If an attacker gets your password and there’s no second factor, they have full access.

Data Sharing Risks

Microsoft Teams, SharePoint, and OneDrive make collaboration easy. They also make accidental data exposure easy:

• Staff sharing OneDrive or SharePoint files externally without expiration dates or authentication requirements
• Ex-employees keeping access because accounts weren’t properly disabled
• Teams channels containing sensitive data with too many members
• Guest users from external organisations never reviewed or removed

Collaboration attacks have become as important as email attacks. Attackers increasingly use malicious links, external sharing, and compromised guest accounts to move laterally or exfiltrate data.

Backup and Recovery Misunderstandings

A common misconception: “It’s in the cloud, so it’s backed up.”

Microsoft provides:

• Recycle bins (30–93 days depending on the service)
• Retention policies (configurable, but not enabled by default for all content)
• Version history for documents

Microsoft does not provide:

• Long-term backup beyond retention periods
• Protection against ransomware that encrypts files and syncs those encrypted versions
• Recovery of data deleted by a malicious insider or attacker
• Backups that meet specific legal or contractual retention requirements

If a SharePoint site is deleted and you discover it six months later, recovery may not be possible with native tools alone.

Compliance and Audit Gaps

Without configuration, you may lack:

• A central record of who accessed what and when
• Data loss prevention (DLP) rules to stop accidental sending of payroll or customer data
• Regular review of sign-in and security logs
• Evidence of controls for cyber insurance or regulatory compliance

Real-world scenario: An attacker compromises an account and creates a mailbox rule that forwards all emails containing “invoice” or “payment” to an external address. Without log review, this can go undetected for months.

Essential Security Steps to Make Microsoft 365 “Business-Grade”

This is a practical checklist for UK small businesses that want to keep Microsoft 365 but close the most common gaps.

• Require MFA for every user – Stops most credential-based attacks instantly.
• Turn off legacy authentication protocols – Closes a common attack vector used by attackers.
• Use conditional access for risky sign-ins – Blocks access from unusual locations or untrusted devices.
• Protect admin accounts with extra controls – Admin accounts are high-value targets for attackers.
• Review admin accounts quarterly – Removes unnecessary privileges and identifies unknown or unused accounts.

Identity and Access

Conditional Access should be treated as a living control. Review outcomes regularly, tune policy scope and verify that emergency “break-glass” admin accounts exist and are protected.

• Enrol Windows and mobile devices into Intune (or equivalent) for policy enforcement
• Require disk encryption (BitLocker on Windows)
• Enforce screen locks and passcodes
• Enable remote wipe for lost laptops and phones
• Use endpoint protection on all computers – Microsoft Defender for Business is included in Business Premium

Email and Collaboration Security

• Enable Defender for Office 365 where licensed
• Tighten anti-phishing policies (impersonation protection, spoof detection)
• Configure safe links and safe attachments
• Apply basic Data Loss Prevention policies to stop accidental external sharing of sensitive files
• Review external sharing settings in SharePoint and OneDrive
• Require authentication for guest access

Data Retention and Backup

• Set clear retention policies for email, Teams, and SharePoint
• Consider a dedicated Microsoft 365 backup solution (various vendors offer this) to protect against long-term deletion, ransomware or insider damage
• Test recovery procedures periodically – don’t assume backups work until you’ve tested them

User Awareness

Technical controls only go so far. Your users are both the first line of defence and the most likely point of failure:

• Provide simple, ongoing security awareness training
• Run simulated phishing exercises (quarterly is a good starting point)
• Make it easy for staff to report suspicious emails without fear of blame
• Communicate that security is everyone’s responsibility, not just IT

Most of this can be configured once and then periodically reviewed. Non-technical managers should ask their IT partner for a written configuration summary so they know what’s actually in place.

How Microsoft 365 Fits into a Wider Cyber Security Plan

Microsoft 365 is one piece of the puzzle, not the entire solution. Even with perfect configuration, you still need to think about the broader security picture.

Mapping to Common Frameworks

If you’re familiar with frameworks like Cyber Essentials or ISO 27001, Microsoft 365 controls map to several key areas:

• Secure configuration – Conditional Access, security defaults and Secure Score.
• User access control – Azure AD, role-based access control and multi-factor authentication (MFA).
• Malware protection – Microsoft Defender for Office 365 and Microsoft Defender for Business.
• Patch management – Automatic updates for Microsoft 365 apps.
• Firewalls and internet gateways – Not covered by Microsoft 365; requires separate network security controls.

The National Cyber Security Centre recommends Cyber Essentials certification as a baseline for all UK businesses. Microsoft 365 can help you meet several of the cyber essentials controls, but not all of them.

Why External Layers Still Matter

Even with Microsoft 365 configured properly, you still need:

• Business-grade firewalls in the office
• DNS filtering to block malicious websites
• Endpoint protection on all devices (not just those covered by your Microsoft licence)
• Secure Wi-Fi with proper access controls
• Protection for systems and software not covered by Microsoft 365

Your internet connection, network and on-premises it systems remain your responsibility.

Business Continuity

Microsoft 365 has had outages. When Teams or Exchange Online goes down, your business needs a plan:

• Alternative contact lists (mobile numbers, personal email addresses)
• Clear communication plan for staff and customers
• Offline copies of critical documents where appropriate
• Understanding of what services are affected and what workarounds exist

Disaster recovery planning should account for cloud service interruptions, not just on-premises failures.

Legal and Contractual Obligations

Depending on your sector, you may face:

• GDPR data protection requirements
• Customer contracts requiring specific security controls
• Sector regulations (financial services, healthcare, legal)
• Cyber insurance policy requirements

In practice, this often means being able to show evidence of how Microsoft 365 is configured and managed, rather than simply relying on the features Microsoft makes available by default.

The sensible approach: Treat Microsoft 365 as the core platform, then add a small number of well-chosen security and continuity measures around it.

Should You Manage Microsoft 365 Security Yourself or Get Help?

Many SMEs assume “our IT person set it up once, so it’s fine.” This is rarely enough in 2026.

When DIY Can Be Reasonable

Managing Microsoft 365 security in house may work if:

• You have a very small team (under 10 users)
• You don’t store particularly sensitive client data
• You’re willing to follow Microsoft’s own Secure Score recommendations
• You review security settings at least quarterly
• You have someone who can stay current with Microsoft security changes

Microsoft releases security updates and new features throughout the year. Keeping up requires ongoing attention.

When External Help Is Advisable

Consider working with an IT support provider or service provider if:

• You store sensitive client data (financial, legal, medical, personal)
• You operate in a regulated sector
• Your cyber insurance requires specific controls or documentation
• You have more than 10–20 staff using Microsoft 365 daily
• You lack internal expertise to configure and monitor security tools
• You need practical support with compliance requirements

What an IT Support Provider Typically Handles

A managed service provider or IT support partner can:

• Configure security policies correctly from the start
• Monitor alerts and respond to incidents
• Review logs and identify suspicious activity
• Keep up with Microsoft security changes and apply them
• Provide hands on support when issues arise
• Help meet cyber essentials certification requirements
• Offer effective cyber security advice tailored to your specific needs

This doesn’t require a long contract. An independent Microsoft 365 security review – a one-off engagement – can quickly highlight gaps and give owners a clear picture of where they stand.

Serveline provides this type of review as part of its Microsoft 365 & Cloud and Cyber Security services. If you’re unsure whether your current setup is adequate, a focused assessment often reveals quick wins and reduces cyber security risks significantly.

Frequently Asked Questions about Microsoft 365 Security

Is Microsoft 365 secure enough for a small business that doesn’t store financial or medical data?

Even businesses that consider themselves “low risk” are targets for fraud and ransomware. Attackers often don’t care what industry you’re in – they’re looking for easy access to email accounts for phishing campaigns, invoice fraud, or ransomware deployment.

At minimum, you should enable MFA, enforce good passwords and maintain regular backups. Microsoft 365 is a suitable platform when configured correctly, but no business is too small or too boring to be targeted.

Do I still need antivirus if I’m using Microsoft 365 and everything is in the cloud?

Yes. Antivirus or endpoint protection is still essential on laptops, PCs and mobile devices. Cyber threats can arrive via USB drives, downloads from websites, browser vulnerabilities, or new software installations – not just email.

Microsoft Defender for Business (included in Business Premium) provides this protection for managed devices. If you’re on a lower licence tier, you’ll need separate endpoint protection software.

Will cyber insurance accept Microsoft 365’s built-in security on its own?

Most UK cyber insurers now expect controls like MFA, secure backups and user training as minimum requirements. Relying only on default Microsoft 365 settings may lead to higher premiums, coverage exclusions, or rejected claims after an incident.

Check your policy requirements carefully. Insurers increasingly ask detailed questions about access control, backup procedures and security awareness training. Having documented evidence of your configuration helps.

How often should our Microsoft 365 security settings be reviewed?

At minimum, conduct a formal review annually. You should also review settings after significant changes such as:

• New staff joining or leaving
• Opening new locations or enabling remote work
• New compliance requirements or customer contracts
• Changes to Microsoft 365 licences or features
• Any security incident, even minor ones

Regular reviews catch configuration drift and ensure you’re using new security features as Microsoft releases them.

If Microsoft 365 goes down, can we still access our emails and files?

During outages, access may be limited or completely unavailable. Microsoft has experienced regional outages affecting Teams, Exchange Online and other services in previous years.

Plan for short-term loss of access by:

• Maintaining alternative contact lists with mobile numbers
• Having a clear communication plan for staff and key customers
• Considering whether offline copies of critical documents are needed
• Using mobile apps where possible (the Copilot mobile app and Outlook mobile often remain functional during partial outages)

Microsoft’s track record is generally good, but no cloud service offers 100% uptime. Your business continuity plan should account for temporary loss of access.

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