Microsoft 365 Security: What You’re Likely Missing (And How to Fix It)

Your organization uses Microsoft 365. You pay for it every month. You’ve enabled MFA. So why does that nagging feeling persist—the sense that you’re not actually as protected as the licensing fees suggest?

You’re not alone. Most mid-sized organizations with Microsoft 365 deployments are running environments where significant security capabilities sit dormant. The features exist. The licenses cover them. But somewhere between procurement and protection, critical configurations never happened.

This isn’t about blame. Microsoft’s security ecosystem—spanning Defender, Entra, Purview, and Intune—is genuinely complex. And when your IT team is handling everything from help desk tickets to strategic projects, mastering every corner of Microsoft’s security stack rarely makes the priority list.

Until an audit flags the gaps. Or worse.

This guide will help IT leaders at growing companies identify the security holes most commonly hiding in Microsoft 365 environments—and provide a practical framework for evaluating whether your investment is actually working.

The Microsoft 365 Security Gap Most Organizations Don’t See

There’s a dangerous assumption embedded in most Microsoft 365 deployments: “We have E3” (or E5) somehow equals “we’re secure.”

It doesn’t.

Licensing grants access to security capabilities. It doesn’t activate them. And Microsoft’s default configurations—while better than nothing—leave substantial gaps that attackers understand even if your organization doesn’t.

Consider what typically happens: A company migrates to Microsoft 365. IT ensures email works, Teams functions, and SharePoint syncs. Everyone breathes a sigh of relief. The security features? They’re there. Somewhere. We’ll configure them properly when things slow down.

Things never slow down.

The result is an environment where Conditional Access policies were started but never completed. Where Defender for Office 365 runs with default settings that haven’t been tuned to your organization’s actual risk profile. Where data loss prevention exists in theory but catches nothing in practice.

The sprawl compounds the problem. Microsoft 365 security isn’t one thing—it’s dozens of capabilities scattered across multiple admin portals:

Portal	What It Controls	Common Gaps
Microsoft Entra admin center	Identity, access, Conditional Access	Policies created but not enforced; privileged accounts without additional protection
Microsoft 365 Defender portal	Email security, threat detection	Default policies unchanged; alert fatigue from untuned rules
Microsoft Purview compliance portal	Data protection, DLP, retention	Features licensed but never configured; no sensitivity labels deployed
Microsoft Intune admin center	Device management, endpoint security	Devices enrolled but compliance policies not enforced

No single dashboard shows whether these components are actually working together—or working at all.

Your organization might have a Secure Score of 45% and not know it. That number represents the protection you’re not getting from tools you’ve already paid for.

The Four Pillars of Microsoft 365 Security You Need to Actually Configure

Microsoft 365 security becomes manageable when you understand it as four interconnected pillars. Each requires attention. None work properly in isolation.

Pillar 1: Identity and Access Management (Microsoft Entra)

Identity is the perimeter now. Every security framework agrees: if attackers can authenticate as your users, everything else fails.

Microsoft Entra (formerly Azure AD) provides the foundation—but “we turned on MFA” isn’t the finish line. It’s barely the starting gun.

What properly configured looks like:

• Conditional Access policies tailored to your risk scenarios, not just blanket MFA requirements
• Privileged Identity Management (PIM) for just-in-time admin access—no standing privileges
• Identity Protection policies that respond to sign-in risks automatically
• Access reviews that actually happen on schedule

The diagnostic question: Can you see, right now, every active privileged session in your environment? If that takes more than thirty seconds to answer, there’s work to do.

Pillar 2: Threat Protection (Microsoft Defender for Office 365)

Email remains the primary attack vector for business email compromise, ransomware delivery, and credential theft. Microsoft Defender for Office 365 provides substantial protection—when configured beyond defaults.

The Plan 1 vs. Plan 2 gap matters:

Capability	Plan 1	Plan 2
Safe Attachments	✓	✓
Safe Links	✓	✓
Anti-phishing policies	Basic	Advanced + impersonation protection
Threat investigation	—	Attack simulation, automated investigation
Real-time reports	—	✓

Many organizations running E3 licenses have Plan 1 protection without realizing Plan 2’s investigation and simulation capabilities could catch threats earlier—if they knew the gap existed.

The diagnostic question: When did someone last review which emails Defender quarantined versus delivered? Is your security team drowning in alerts or seeing nothing at all?

Pillar 3: Information Protection (Microsoft Purview)

Here’s where compliance requirements meet technical reality. Microsoft Purview handles data loss prevention, sensitivity labeling, insider risk management, and retention policies.

For organizations in healthcare, financial services, or any regulated industry, Purview isn’t optional—it’s how you demonstrate data governance during audits.

What “configured” means:

• Sensitivity labels deployed and adopted by users (not just created and ignored)
• DLP policies tuned to your actual data patterns—catching real violations without blocking legitimate work
• Insider risk management monitoring for data exfiltration patterns
• Retention policies that match your legal and compliance requirements

The diagnostic question: If an employee emailed a spreadsheet containing customer SSNs to their personal Gmail, would your systems catch it? Would anyone know?

Pillar 4: Endpoint Security (Microsoft Intune)

Remote and hybrid work made endpoint security non-negotiable. Microsoft Intune manages devices—but enrollment isn’t the same as protection.

The gap between “managed” and “secure”:

Status	What It Means	What’s Missing
Enrolled	Device appears in Intune	No compliance enforcement
Compliant	Device meets baseline policies	Policies may be minimal
Secured	Compliance + Defender + conditional access	Requires intentional configuration

A device can be “managed” by Intune while running outdated OS versions, lacking encryption, or connecting without Conditional Access verification.

The diagnostic question: What happens if an enrolled device fails a compliance check? Does access continue? Does anyone get notified?

Security Best Practices: What “Properly Configured” Actually Looks Like

Frameworks are useful. Benchmarks are better. Here’s what security maturity actually looks like across each pillar—and how to know if you’re there.

Identity: Beyond Security Defaults

Microsoft’s Security Defaults provide baseline MFA and block legacy authentication. They’re appropriate for small organizations or as a starting point.

Growing companies need Conditional Access:

Scenario	Security Defaults	Conditional Access Policies
Block legacy auth	✓	✓
Require MFA	All users, all apps	Risk-based, app-specific, location-aware
Device compliance	—	Require compliant/hybrid-joined devices
Session controls	—	Limited sessions for risky sign-ins
Named locations	—	Trusted locations with reduced friction

The benchmark: A Secure Score identity section above 70% typically indicates Conditional Access policies are in place and enforced.

Email Protection: Tuning Matters

Default Defender policies catch obvious threats. Tuned policies catch sophisticated ones.

Configuration priorities:

• Anti-phishing policies with impersonation protection for executives and finance team members
• Safe Attachments in Dynamic Delivery mode (delivers email immediately, attachments after scanning)
• Safe Links with real-time URL scanning, including internal communications
• Alert policies configured to notify the right people—not everyone, not no one

The benchmark: Quarantine reviews happening weekly. Alert volume manageable. Simulation campaigns showing phishing susceptibility declining.

Data Protection: Start with Sensitivity Labels

Purview overwhelms most organizations because they try to configure everything simultaneously. Start here:

Phase 1: Sensitivity Labels

• Create labels matching your data classification scheme (Confidential, Internal, Public)
• Enable for files and emails
• Configure encryption for Confidential content
• Deploy to pilot group, then organization

Phase 2: Data Loss Prevention

• Start with Microsoft’s built-in templates for your industry (HIPAA, GLBA, PCI-DSS)
• Begin in test mode to see what would be blocked
• Tune policies based on real findings before enforcement
• Add custom policies for organization-specific data patterns

Phase 3: Insider Risk

• Configure policies for data theft by departing users
• Monitor for unusual download or exfiltration patterns
• Integrate with HR processes for employee transitions

The benchmark: Sensitivity labels appearing on documents. DLP policies blocking or notifying on actual sensitive data movement. Insider risk alerts investigated within 48 hours.

Endpoint Security: The Compliance-to-Access Connection

Intune’s value multiplies when device compliance gates access through Conditional Access.

Configuration priorities:

• Compliance policies defining minimum OS version, encryption requirement, and Defender status
• Conditional Access policies requiring compliant devices for corporate resource access
• Security baselines applying Microsoft’s recommended configurations
• Defender for Endpoint integration for advanced threat detection

The benchmark: Non-compliant devices automatically blocked from sensitive applications. Compliance dashboard showing 95%+ compliant devices.

Why Internal IT Teams Struggle to Keep Up

This isn’t a capability problem. It’s a bandwidth and specialization problem.

Microsoft releases new security features faster than most IT teams can evaluate them—let alone implement. Each pillar of Microsoft 365 security represents a specialization. Identity management, threat protection, compliance governance, and endpoint security each have their own learning curves, best practices, and gotchas.

Your IT director probably understands all four at a strategic level. Mastering the configuration details of each? That requires depth most lean IT teams can’t maintain while keeping the lights on.

The hidden cost calculation:

Factor	Impact
Features launched but not configured	Security gaps despite licensing investment
Alerts enabled but not monitored	Threats detected but not addressed
Policies created but not enforced	Compliance on paper, risk in reality
Licensing options unexplored	Overpaying for unused capabilities

The result isn’t failure—it’s unrealized value. Your Microsoft investment should be delivering more protection than it currently provides.

When external expertise makes sense:

• Your Secure Score has plateaued below 60%
• Compliance audits consistently flag Microsoft 365 configuration gaps
• Alert fatigue has made security notifications meaningless
• Your IT team acknowledges they lack time to optimize the environment
• You’re unsure what your current licensing actually includes

Evaluating Your Microsoft 365 Security Posture: Where to Start

Assessment doesn’t require a consultant. Start with what Microsoft provides—then determine if you need additional perspective.

Step 1: Check Your Secure Score

Navigate to security.microsoft.com and review your Secure Score. This free assessment provides immediate visibility into configured versus available security controls.

What the number tells you:

Secure Score	Interpretation
Below 40%	Significant gaps—likely running near-default configuration
40-60%	Some configuration done, substantial improvement available
60-80%	Solid foundation, optimization opportunities remain
Above 80%	Well-configured environment, focus on maintenance

Step 2: Audit Your Conditional Access Policies

In the Entra admin center, review your Conditional Access policies. Answer these questions:

• Are policies in “Report-only” mode or actually enforced?
• Do policies cover all users or just some?
• Are privileged accounts subject to stricter controls?
• Do policies require device compliance for sensitive apps?

Step 3: Review Defender Alert Patterns

In the Microsoft 365 Defender portal:

• How many alerts are generated daily/weekly?
• What percentage get investigated versus ignored?
• Are policies tuned for your organization or running defaults?
• When did someone last review quarantined messages?

Step 4: Map Compliance Requirements to Purview Capabilities

For regulated industries:

• Which compliance frameworks apply (HIPAA, SOX, GLBA, SOC 2)?
• What Purview capabilities address those requirements?
• Which are configured? Which are licensed but dormant?

Step 5: Assess Whether You Need External Help

Consider a third-party assessment when:

• Internal review reveals gaps but unclear remediation paths
• Your team lacks time to implement identified improvements
• You want objective validation before an audit
• Licensing optimization could offset assessment costs

Taking Action: Your Security Posture Roadmap

Microsoft 365 security isn’t a project with a completion date. It’s an ongoing discipline requiring attention, tuning, and periodic reassessment.

Immediate actions (this week):

• Check your Secure Score and note the top three recommended actions
• Verify Conditional Access policies are enforced, not report-only
• Confirm privileged accounts have additional protection enabled

Short-term priorities (this quarter):

• Implement or tune Conditional Access for your actual risk scenarios
• Configure sensitivity labels and deploy to pilot users
• Tune Defender policies to reduce alert noise and improve detection

Ongoing practices:

• Monthly Secure Score reviews
• Quarterly Conditional Access policy audits
• Regular DLP policy tuning based on false positive patterns
• Annual comprehensive security assessment

The gap between what you’re paying for and what you’re getting from Microsoft 365 security is real—but it’s also fixable. The question is whether you’ll address it proactively or wait for an audit (or incident) to force the conversation.