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Security in Microsoft Dynamics 365: How Safe is Your Data?

A brief guide to data security in Microsoft Dynamics 365 and Azure.

Office worker with a laptop open in front of them

Since 2020, digital transformation has accelerated at an unprecedented rate. In the wake of the disruption caused by the pandemic, companies across industries are increasingly adopting cloud computing for the first time or replacing their existing ERP systems. According to Gartner Inc, the worldwide spending on public cloud services is forecasted to grow 18.4% in 2021, and by 2024, more than 45% of IT spending will shift from traditional systems to the cloud.

Migrating to the cloud helps businesses stay competitive and ensures resilience and agility. There's no doubt about it – there are numerous benefits of cloud ERP for companies, regardless of their size or industry.

However, concerns about data security and privacy remain an obstacle for many companies that are considering cloud transformation. This article will examine the security protocols in the industry-leading Microsoft Dynamics 365 and take a closer look at how Microsoft is working to safeguard its customer's data in the cloud.

Microsoft's Approach to Security

Gartner positioned Microsoft as a Leader in 4 Magic Quadrants on security in 2020, including access management, unified endpoint management tools, cloud access security brokers, and enterprise information archiving. Microsoft also invests over $1B each year into cybersecurity research and development.

They approach cloud security with a "Zero Trust" model. This model assumes breach and explicitly verifies the security status of identity, endpoint, network, and other resources based on all available signals and data. It relies on contextual real-time policy enforcement to achieve the least privileged access and minimize risks. Automation and Machine Learning are also used to enable rapid detection, prevention, and remediation of attacks using behavior analytics and large datasets.

Security in Azure: How Safe is the Microsoft Cloud?

All of Microsoft's cloud products, including Dynamics 365 are built and hosted on their cloud platform called Azure, the world's second-largest public cloud provider. (It also has the most compliance certifications than any other cloud provider.)

Azure is operated from over 100 secure Microsoft data centers worldwide, and each physical datacenter is secured with multi-layered protection. This ranges from access approval, multiple physical layers, and forms of identification to physical security like locked server racks, perimeter fencing, 24×7 video surveillance and other tight security measures.

Then there is the Microsoft Cyber Defense Operations center: a cybersecurity and defense facility that protects the cloud infrastructure. With over 3,500 cybersecurity experts who work 24x7x365, they protect, detect, and respond to threats in real-time.

They also continuously strive to identify potential threats through internal exercises, with over 200 professionals divided into red and blue teams. The red team tries to compromise Azure's infrastructure, and the blue team defends against attacks made by the red team. At the end of each red and blue team exercise, the team codifies what they've learned into the Azure operational security process, so the team becomes more effective at continuous detection and response.

Here are some critical layers to Azure's security model, which include:

  • Industry-standard encryption protocols

  • Secure networks and firewalls

  • Secure keys and Hardware Security Modules (HSMs)

  • Malware and ransomware protection

  • Access management with multi-factor authorization

They also have the Azure Security Center for customers to keep their Azure-hosted solutions safe. It offers everything from security management to advanced threat protection, and you can set your policies, manage threats, and detect and respond to any threats.

For more technical information, check out this blog series on Azure security.

Security in Microsoft Dynamics 365: How Does That Work?

As Microsoft built Dynamics 365 on Azure, when you purchase any of the cloud-based solutions from that suite, you can rest assured that you are receiving the same state-of-the-art security, privacy, and compliance.

Another thing to note is that when you're using Microsoft Dynamics 365 to run your business, you own your data, even though it is in a data center. Microsoft merely acts as a custodian and protects your data using encryption. Microsoft was the first cloud provider to adhere to ISO 27018, which ensures a range of ethical practices. For instance, it ensures that your data and your customer data are only used to provide the agreed-upon services, and it is never shared with third parties for advertising or marketing.

All Microsoft Dynamics 365 applications offer ways to define and enforce access and privileges. These privileges secure access to data and include:

  • Role-based security – Your security is managed by administrators, who dole out access to data and functions based on each user's role in your company. Access rights are split into five levels, ranging from basic to global.

  • Record-based security – This security measure focuses on access rights to specific records and dictates what a user can or cannot do to your data. For example, you might wish one user to create and delete a record, while another is only given access to view a record.

  • Field-based security – If you have any fields that contain sensitive information, you can assign specific, field-level security parameters to these individual fields.

Microsoft Dynamics 365 provides numerous protective features to keep a company's data safe. However, companies should also proactively address any problems, putting in place processes and policies to ensure that their data is accessed and handled correctly. This brings us to our next point about the shared responsibility when it comes to cloud security.

As you consider Microsoft Dynamics 365 or any other cloud solution, it's essential to understand that cloud security follows a shared responsibility model. The cloud provider handles some security tasks and there are some that you will need to undertake. From the client end, you will be responsible for endpoint protection such as identity & access management.

So, Are Cloud Solutions Safe?

Cybersecurity is an ongoing process. With evolving cyberthreats and more sophisticated attacks emerging, it's critical to consider whether your vendor has the know-how, budget, and commitment to safeguarding your data.

Microsoft's security approach is unique in the industry, and they have two main advantages: an integrated approach and incredible AI and automation. So, when you're evaluating the safety of a cloud solution, why not take advantage of an expert tech company with a billion-dollar security budget!

Microsoft Security infographic

Source: Microsoft

Learn more about Dynamics 365 and migrating to the cloud

Cloud ERP is quickly becoming the new normal, as it reduces costs, increases your security, and improve business agility. If you have more questions Dynamics 365 security or want to learn more about it can transform your business, get in touch with Kwixand Solutions, a certified Microsoft Dynamics 365 partner.


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