Microsoft 365 holds your email, documents, Teams conversations, and identity data in one connected environment, which makes it extraordinarily valuable to attackers. When 90% of organizations have gaps in their M365 security configurations, the question isn’t whether vulnerabilities exist. It’s which ones you haven’t found yet.
This guide breaks down the seven most common Microsoft 365 security risks, explains why each one matters, and covers how to assess and standardize protection across multiple tenants.
What are Microsoft 365 security risks?
Microsoft 365 security risks are misconfigurations, vulnerabilities, and gaps in default settings that leave email, files, and identity data exposed to unauthorized access. The most common risks come from human error and overlooked configurations, such as phishing attacks, credential theft and missing multi-factor authentication. Business email compromise, overly permissive sharing settings, and gaps in backup strategies are also common culprits.
What makes M365 particularly vulnerable is how much it centralizes. Email, documents, Teams conversations, SharePoint sites…all of it lives in one connected environment. So when one account gets compromised, the attacker doesn’t just get access to a mailbox. They potentially get access to everything that user can touch.
Why attackers target Microsoft 365 environments
Microsoft 365 has become one of the most valuable targets for attackers, and the reason is straightforward: it’s where the data lives. With over 450 million paid seats globally, attackers know that focusing on M365 gives them the largest possible pool of potential victims.
The platform’s default settings tend to favor usability over security. Out of the box, M365 makes collaboration easy—sometimes too easy. Organizations that deploy the platform without adjusting configurations are essentially running with unlocked doors, and attackers actively scan for exactly that pattern.
According to CoreView’s research, 90% of organizations have gaps in essential M365 security protections. That’s not a small minority with problems. That’s nearly everyone.
- Centralized data access: A single compromised account can unlock email, SharePoint, OneDrive, and Teams simultaneously
- Widespread adoption: Attackers concentrate on platforms with the largest user bases because the payoff scales
- Misconfiguration prevalence: Default settings rarely match security best practices, and most organizations never change them
7 most common Microsoft 365 security risks
Weak or missing multi-factor authentication
Multi-factor authentication, or MFA, adds a second verification step beyond passwords. After entering a password, users confirm their identity through a code sent to their phone or generated by an authenticator app. Without MFA, accounts are vulnerable to phishing, credential stuffing, and password spray attacks.
Here’s what’s surprising: even though MFA is widely recognized as essential, many organizations still haven’t enabled it everywhere. CoreView found that 87% of organizations have MFA disabled for some or all of their administrators. Administrator accounts have elevated privileges across the entire tenant, so leaving them unprotected creates enormous exposure.
The fix itself isn’t complicated; enabling MFA takes minutes. The challenge is usually organizational: getting buy-in, handling exceptions, and making sure the rollout doesn’t disrupt daily work.
Legacy authentication protocols still enabled
Legacy authentication refers to older protocols like POP3, IMAP, and basic SMTP that were designed before MFA existed. The problem? They bypass MFA entirely. Even if MFA is enabled for a user’s primary login, an attacker can authenticate through a legacy protocol and skip the second factor completely.
Attackers know this and actively exploit it. They’ll specifically attempt authentication using legacy protocols because modern security controls don’t apply. It’s a backdoor that many organizations don’t realize they’ve left open.
Blocking legacy authentication is one of the highest-impact changes an organization can make. However, it requires checking whether any critical applications—older email clients, multifunction printers, or line-of-business apps—still depend on those protocols. Cutting them off without warning can break workflows.
Too many global administrator accounts
Global administrator accounts have unrestricted access to every setting, every user, and every piece of data in the tenant. They can modify security configurations, access any mailbox, and delete anything. Every additional global admin account expands the attack surface.
The recommended practice is maintaining two to four global admin accounts, each protected by MFA and used only when absolutely necessary. In reality, many organizations have accumulated far more over time. It often happens because granting global admin seemed easier than figuring out the right granular permissions.
The principle of least privilege applies here: users and accounts get only the access they actually require. When someone leaves the organization or changes roles, their elevated access often lingers unless there’s a process to review and revoke it.
Oversharing in SharePoint and OneDrive
Default sharing settings in SharePoint and OneDrive often allow external or anonymous link sharing. While convenient for collaboration, this means sensitive files can leave the organization with a single click.
The risk compounds when users don’t fully understand what they’re sharing. A link set to “Anyone with the link” can be forwarded indefinitely. The original sharer may never know their data has spread beyond its intended audience. Once that link is out there, controlling access becomes nearly impossible.
| Sharing Setting | Risk Level | When to Use |
|---|---|---|
| Anyone with the link | High | Rarely—only for truly public content |
| People in your organization | Medium | Internal collaboration |
| Specific people | Low | Sensitive documents requiring controlled access |
Restricting external sharing to specific domains or requiring authentication helps contain exposure. The tradeoff is slightly more friction for legitimate collaboration, but the reduction in risk is usually worth it.
Weak email security settings
Email authentication protocols verify that messages actually come from authorized senders. Without them, attackers can spoof your domain to send phishing emails that appear completely legitimate, even to careful recipients.
Three protocols work together to provide email authentication:
- SPF (Sender Policy Framework): Specifies which servers are authorized to send email for your domain
- DKIM (DomainKeys Identified Mail): Adds a digital signature to verify message integrity
- DMARC (Domain-based Message Authentication): Tells receiving servers how to handle messages that fail SPF or DKIM checks
Many organizations have incomplete or misconfigured email authentication. A common gap is having SPF and DKIM configured but no DMARC policy, which means spoofed emails may still reach recipients. Setting up all three protocols correctly takes some DNS work, but it significantly reduces the risk of domain spoofing.
Unmonitored third-party app permissions
OAuth apps can request broad permissions to M365 data, and users often grant consent without fully understanding what access they’re allowing. When someone clicks “Allow” on an app permission request, they might be giving that app ongoing access to their mailbox, calendar, contacts, and files.
This creates shadow IT risks where unauthorized applications have persistent access to sensitive data. The danger increases when employees leave or when an app vendor experiences a breach. Those OAuth tokens remain valid until explicitly revoked, giving attackers a potential backdoor that doesn’t require stealing credentials.
Regular audits of consented applications help identify and remove unnecessary access. Most organizations are surprised by how many apps have accumulated permissions over time, many of which are no longer actively used.
Inconsistent security policies across tenants
For MSPs managing multiple customer environments, policy drift represents a persistent challenge. Each tenant may have different configurations, different license levels, and different security baselines. Keeping track of what’s enabled where becomes increasingly difficult as the customer count grows.
Inconsistency creates blind spots. A security control enabled for one customer might be missing for another, and without centralized visibility, gaps often go unnoticed until a breach occurs. The problem isn’t usually negligence; it’s that manual configuration across dozens of tenants doesn’t scale.
Tip: Building security baseline templates aligned with frameworks like CIS or NIST allows you to apply consistent configurations across all tenants without manually configuring each one individually.
How to assess your Microsoft 365 security posture
Identifying which risks exist in your environment requires systematic assessment rather than guesswork. Microsoft Secure Score provides a built-in starting point—it grades your tenant’s security configuration and recommends specific improvements based on what’s enabled or missing.
However, Secure Score doesn’t cover everything. Industry frameworks like CIS Benchmarks and NIST Cybersecurity Framework offer more comprehensive configuration guidance. CIS Benchmarks, for example, provide specific settings mapped to security outcomes, making it easier to prioritize what to fix first.
- Microsoft Secure Score: Built-in tool that grades tenant security and recommends improvements
- CIS and NIST frameworks: Industry standards for evaluating configuration compliance
- Security risk assessments: Automated scans that identify misconfigurations across tenants
For MSPs, running security risk assessments across all customer tenants reveals patterns and common gaps. This visibility helps prioritize which risks to address first and provides concrete data for client conversations about security investments.
How MSPs standardize Microsoft 365 security across clients
Managing security across dozens or hundreds of tenants manually isn’t sustainable. The time required to configure each tenant individually, monitor for changes, and respond to alerts quickly exceeds what most MSP teams can handle, especially when senior security staff are limited.
Centralized management platforms address this challenge by providing unified controls for Conditional Access, Defender, and MFA settings across all tenants. Rather than logging into each customer’s admin portal separately, technicians can view and modify configurations from a single interface.
- Security baseline templates: Pre-built configurations aligned with CIS, NIST, or SCuBA standards that can be applied consistently
- Cross-tenant policy management: Unified controls that apply settings across multiple tenants simultaneously
- Automated breach detection: Real-time alerts that notify technicians of suspicious activity without requiring manual monitoring
Augmentt’s Secure Autopilot enables MSPs to apply security best practices with one click, regardless of customer license tier. Lower-tier licenses don’t receive the same level of Microsoft alerting, but Augmentt extends breach detection to all license levels, giving MSPs visibility across their entire customer base without requiring premium licensing for every tenant.
See how Augmentt helps MSPs standardize M365 security →
FAQs about Microsoft 365 security risks
Is Microsoft 365 secure by default?
Microsoft 365 includes built-in security features, but default configurations prioritize ease of use over protection. Organizations that deploy M365 without actively hardening settings leave significant gaps that attackers routinely exploit. Security requires intentional configuration, not just deployment.
What is the biggest security threat facing Microsoft 365 users?
Phishing attacks targeting user credentials remain the most common threat, especially when accounts lack multi-factor authentication or email security protocols like DMARC. Business email compromise—where attackers impersonate trusted contacts to request wire transfers or sensitive data—follows closely behind.
How often should organizations audit Microsoft 365 security settings?
Security configurations benefit from review at least quarterly, or whenever Microsoft releases significant updates. This cadence helps catch policy drift and newly introduced vulnerabilities before they become exploitable. Automated monitoring can supplement periodic manual reviews.
Does Microsoft 365 license tier affect security risk exposure?
Lower-tier licenses lack advanced security features like Conditional Access and Defender for Office 365. However, core protections like MFA and email authentication can be configured on any license. With Augmentt, MSPs can receive breach alerts even for customers on lower-tier licenses—extending visibility beyond what Microsoft natively provides.
Which compliance frameworks apply to Microsoft 365 security?
Common frameworks include CIS Benchmarks, NIST Cybersecurity Framework, and Microsoft’s SCuBA baselines. Each provides specific configuration guidance for hardening M365 environments and can serve as a foundation for security policies that align with customer compliance requirements.
