GeekWire is profiling over the next few weeks some of the people and teams that are shaping the evolution of Microsoft in what we’re calling its “Microsoft 2.5” era.

AI has had an impact on just about every tech-product category, but especially security. Attackers are using AI; customers are looking to defend with AI. The goalposts keep shifting. “Agentic security” is now the holy grail, and Hayete Gallot, the newly minted executive vice president of Microsoft Security, is leading the charge toward it.

Gallot, a 16-plus-year Microsoft veteran who rejoined the company in February after a 1.5-year Google detour, replaced Charlie Bell, who came to Microsoft from AWS in 2021 and continues at the company as an individual contributor focused on engineering quality.

“Customers care about two things: solving for security and being able to afford it,” Gallot said when I asked during our interview this week why she came back to Microsoft.

“I am a problem solver. And an engineer at heart (and by training). Security is the most important problem right now — and Microsoft is the only place with all of the puzzle pieces to help our customers.”

Since her return, Gallot hasn’t been shy about shaking things up. As noted recently by The Information, at least nine corporate vice presidents who previously reported to Bell have left the company this year.

“We’re making changes to ensure we’re in the best formation to go after this opportunity,” she acknowledged.

“I’m motivated by doing the right thing for our customers, my teams, and tech outcomes,” she said. “I like to move quickly: days and weeks, not months and years, learning through execution, iterating rapidly, and adjusting based on real customer signals.”

The company isn’t starting from scratch. As of 2021, Microsoft claimed security was a $10 billion business for the company. By 2023, security had reached a $20 billion annual revenue rate, officials said.

Those claims haven’t been without controversy. Microsoft has built a huge business in finding and fixing security problems which some customers felt were of the company’s own making.

Microsoft has a wide-ranging and rather unwieldy security portfolio, encompassing identity management (Entra), endpoint protection (Defender), endpoint management (Intune), security information and event management (Sentinel), and compliance (Purview), among others.

In 2023, Microsoft introduced its Security Copilot set of AI analysis services that integrated with some of its existing security offerings. But a portal-based solution like Security Copilot doesn’t offer the kind of end-to-end coverage that an agentic security platform can, Gallot said.

The problem is that attackers are using agents, too. Customers need real-time insight into what’s happening in their environment, and the ability to act just as quickly, Gallot said.

Agentic security is about “taking the signals and turning them into a graph that is useful,” Gallot said. “If you’re trying to reason about 100 trillion signals, it’s not really effective.” The graph, she said, lets agents pick the right model for each threat and close the loop.

In practice, that means the system can quarantine a device or revoke access on its own, for example, rather than waiting for a human.

Microsoft’s core existing security products will continue to play a role as the landscape evolves, both spotting the problems and acting on them. Security Copilot isn’t going away in the process: “You’ll have Copilot and you’ll have agentic security,” she said.

The company’s new Agent 365 “control plane” — a central console for tracking every AI agent a company runs — fits in by letting customers see the “blast radius” of an agent, meaning everything a hijacked agent could reach, Gallot said. It’s similar in concept to Zero Trust, the “never trust, always verify” security model that limited how far an attacker could get with a stolen employee login, but applied now to agents rather than people.

So what exactly is this ‘agentic security’ thing? Microsoft has a whole website dedicated to the very topic.

Traditional AI security and agentic AI security are fundamentally different, Microsoft says. Agentic security doesn’t just protect models and training data; it also can protect tools, workflows, memory, connected systems and more. Because agents can take action, the potential positive and negative stakes are higher.

While AI has helped businesses make strides in finding and fixing vulnerabilities, it hasn’t gone much beyond that. Microsoft introduced its multi-model agentic scanning harness (MDASH) as its first step into the agentic security space, Gallot said.

The company used MDASH internally to boost finding and fixing Windows security issues, and it is now making it available to select customers in an expanded preview. MDASH will allow customers to use the best model for the right task to secure all different types of code bases, she said.

Microsoft is rumored to be readying a more comprehensive agentic security offering, of which MDASH is likely just one piece.

Microsoft is far from the only one doing this. AWS, Anthropic, and OpenAI are offering security tools on their platforms, and dedicated security vendors are building their own agentic platforms.

Microsoft has the advantage of scale in the enterprise. The question is whether Gallot and her new leadership team can turn that scale and emerging AI tools into both a bigger business for the company and better protection for its customers.

Microsoft is launching a new AI “company.” It won’t be a separate legal entity, and most of its 6,000 people already work at Microsoft. But the $2.5 billion behind it is real, and the stakes are big, given how many of its AI partners and rivals are racing to do basically the same thing. 

The tech giant on Thursday announced “The Microsoft Frontier Company,” which will embed engineers inside customers to build and run AI systems. It will be led by Rodrigo Kede Lima, a longtime Microsoft sales and enterprise leader, most recently president of Microsoft Asia.

This practice is known in the industry as forward-deployed engineering, in which a company sends its own technical employees to work inside a customer’s operations to design, build, deploy and operate AI systems on-site rather than selling a tool and walking away. 

The model was pioneered two decades ago by Palantir, but in recent months the approach has become the hot new thing in enterprise AI. Amazon committed $1 billion to its own forward-deployed engineering initiative just two days ago. (Some inside Microsoft suspect that its rival may have caught wind of what it was planning and moved to announce first.) 

Anthropic and OpenAI launched rival ventures in May to put engineers inside enterprise customers. Unlike Microsoft’s initiative, the OpenAI Deployment Company, as the ChatGPT maker’s venture is known, is an actual standalone entity — majority-owned by OpenAI but backed by more than $4 billion from a partnership led by the private-equity firm TPG. 

Similarly, Anthropic teamed with Goldman Sachs, Blackstone and Hellman & Friedman on a $1.5 billion venture — not yet named — to embed engineers inside mid-sized companies, starting with the investment firms’ own portfolio businesses.

Microsoft is attempting to one-up them all. 

“This goes beyond what has been labeled as Forward Deployed Engineering (FDE) and will be the largest, most capable, outcome-driven engineering organization in the industry,” wrote Judson Althoff, CEO of Microsoft’s commercial business, in a post announcing the new initiative Thursday morning.

Responding to questions from GeekWire, a Microsoft spokesperson called the new initiative “a purpose-built company with its own leadership and financial accountability” but stopped short of calling it a separate legal entity or standalone company.

The spokesperson said the organization “brings together more than 6,000 industry, engineering and AI professionals, drawn primarily from Microsoft’s existing engineering and forward-deployed teams,” noting that it will “grow through a combination of internal talent and external hiring across engineering, AI, and industry roles.”

Separately, some consulting roles are among those expected to be impacted by the round of layoffs anticipated next week.

Microsoft wouldn’t say whether the $2.5 billion is new spending or repurposed from existing budgets, or over what period it’s being spent. The company also hasn’t yet spelled out what the new organization means for the future of its existing consulting and services units.

Across the industry, this is happening now because the payoff from AI has proven harder to capture than many companies expected. Businesses across the economy have adopted tools like ChatGPT, Claude, Gemini and Copilot, only to find that impressive demos don’t automatically translate into results. The technology is powerful, but deploying it can be difficult inside a real company, with its own data, rules and entrenched ways of working.

So the AI providers have started sending their own engineers to work inside those companies, figuring out where the AI can actually help, then building it into their operations.

“Having the model alone doesn’t change your workflows or how you operate,” said Marc Nachmann, Goldman Sachs’ global head of asset and wealth management, in an interview with CNBC about the Anthropic partnership. “You need people who can combine the technology with what’s actually happening in the business and implement those changes.” 

The big AI providers have multiple reasons to do this. Each of them wants to get more businesses using its AI platform at higher volumes. All of them are looking to drive long-term demand for the AI capacity they’re collectively spending hundreds of billions of dollars to build.

Another big reason: AI models are becoming commodities, getting cheaper and more similar by the month. The big money for the likes of Microsoft is in selling the services needed to make AI pay off inside a company, which is a far bigger market than just selling the models themselves.

Microsoft is pitching privacy and trust as a selling point. Its promise is that a customer’s data and hard-won knowledge stay the customer’s alone. Microsoft says it won’t feed them into training its AI models in ways that would hand the same advantages to the customer’s rivals. 

It’s also promising choice: customers can run whichever AI model fits the job, from OpenAI, Anthropic, Microsoft, or open-source providers, not locked into using one.

Microsoft CEO Satya Nadella has argued that a company should be able to exchange one AI model for another without losing all the institutional knowledge it has built up. 

That’s his test, as he put it, for whether a business still controls its own future.

“The last thing any of us want is a world where every company across every sector is ceding value to a few models that eat everything they see,” Nadella wrote in a June 14 essay. “If all the value is accrued by only a few models, the political economy will simply not tolerate it. There is no societal permission for an AI future that hollows out entire industries.”

Whether that vision of swappable AI models becomes a reality remains to be seen. There’s actually a risk for customers that the opposite will happen in the forward deployed engineering approach. Even if they can theoretically swap in a competitor’s AI model, working with Microsoft’s engineers means their systems naturally end up running on Microsoft’s cloud platform and related technologies, making it very difficult to jump ship.

It’s also not clear how new all of this really is for the company. Microsoft already runs a large in-house delivery arm — Industry Solutions Delivery, the group that absorbed what used to be called Microsoft Consulting Services — with thousands of consultants and engineers building and deploying technology inside customer organizations. 

Microsoft also has programs like FastTrack to help customers roll out its software, and over the past year it has been rolling out “forward-deployed engineering” teams with partners, including a dedicated practice with Accenture and a $1 billion, five-year alliance with EY.

So ultimately the Microsoft Frontier Company is less a new company than a new push behind work the actual company was already doing, albeit bigger and better-branded than before.

— Hrishikesh Aradhye has joined Amazon Music as vice president of product and tech for the streaming service. He spent nearly 19 years at Google, most recently as senior director of engineering leading YouTube Music and Podcasts.

“The music industry is going through a tectonic shift that will unlock entirely new kinds of customer experiences through AI,” Aradhye said.

Earlier in his tenure there, he worked at Google Research, where he helped pioneer computer vision and machine learning systems for YouTube and Android.

— Vasu Jakkal is stepping down after six years as Microsoft‘s corporate vice president of Security, Compliance, Identity, Management & Privacy. She thanked colleagues and customers in a LinkedIn post.

“It’s been an epic journey — six years ago, we formed our Security customer solution area and the growth and impact of Microsoft Security over these past years has been incredible as we built the #1 security business in the world while keeping our mission of building a safer world for all at the heart of it,” Jakkal wrote.

Jakkal is based in the San Francisco Bay Area and previously held executive roles at FireEye and Intel. She did not indicate her next move.

— Mika Yamamoto was named chief marketing and customer AI officer for Veeam Software, a Seattle-based data protection and ransomware recovery company. It’s the latest in a string of leadership changes at Veeam, which has made four other executive hires or promotions this year.

Yamamoto previously worked for Seattle-area companies including F5, Microsoft and SAP, and joined Veeam from Los Angeles-based Blackline.

“She has experienced this industry from every angle — analyst, operator, executive leader — and has consistently put the customer and partner at the center of how companies operate,” CEO Anand Eswaran said in a statement.

— In case you missed it, Microsoft has undergone a leadership shakeup within Copilot as the company works to turn its platform into a “super app.” Changes include:

• Jacob Andreou has moved from corporate vice president at Microsoft AI to executive vice president of Copilot. He joined the company in 2025 from Greylock Partners and before that was at Snapchat-maker Snap.
• Peter Sellis has been named Copilot’s lead of design, growth and engineering, reporting to Andreou. He joins Microsoft from Discord and overlapped with Andreou at Snap, where Sellis was VP of product.
• The reshuffle also comes with a departure. Trevor O’Brien, former VP of product for M365 Copilot experiences, has resigned from his role. “The past two and a half years have been inspiring, chaotic, intense, and deeply rewarding,” O’Brien said on LinkedIn. He did not indicate his next move.

— Seattle-based tech executive Niranjan Vijayaragavan has taken the role of CTO at Five9, a cloud-based contact-center-as-a-service company. He joins Five9 from Nintex, where he served as chief product and technology officer. Other past employers include Avalara and Expedia Group.

“Five9 is at the center of one of the most important shifts in customer experience as AI reshapes how companies engage with their customers,” Vijayaragavan said in a statement. The company is based in San Ramon, Calif., but Vijayaragavan will remain in Washington.

— Maura Mast was appointed president of Seattle University, succeeding Eduardo M. Peñalver, who resigned to lead Georgetown University. Mast is the first woman and first mathematician to hold the top role at the Jesuit Catholic university.

“Our world urgently needs spaces of dialogue and discernment that actively work to heal deep divisions and build a more equitable society,” Mast said in a statement, adding that SU can lead in these areas.

Mast will begin the job on Sept. 1 and joins SU from Fordham University, where she served as a dean and mathematics professor.

— The Cascadia Sustainable Aviation Accelerator named Jake Gentry as its executive director. Gentry helped create CSAA, which aims to make the Pacific Northwest a center for the production of sustainable aviation fuel (SAF). He remains a senior director at Seattle’s Earth Finance and is leading the accelerator as part of that organization.

Hawaiian Airlines CEO Diana Birkett-Rakow praised Gentry’s appointment, saying in a statement that he has “the right combination of strategic depth, execution orientation, coalition-building instincts, and commitment to the work.”

Gentry previously held sustainability leadership roles with companies including Point B and Boeing.

— Seattle’s F5 has added Gavin Munroe to its board of directors, where he will serve on the audit and risk committees. Munroe has decades of experience in financial services and most recently was chief information officer and transformation head at Commonwealth Bank of Australia.

— Harini Gokul, a former leader at Microsoft and AWS and past chief customer officer at Entrust, has joined the board of Afiniti. The company builds AI software for call centers that aims to match customers with the appropriate agent. Gokul also serves on the Medina City Council.

— Safe Software, a data and AI enterprise integration platform based in Surrey, British Columbia, has named Nabil Lodey vice president of Europe, the Middle East and Africa. Lodey will help lead the company’s expansion in the UK and Ireland.

— Allison Gruber is now VP and leader of Portland-based Cambia Health Foundation. She previously oversaw Cambia Health Solutions’ Strategy and Innovation team, where she led data-driven strategy initiatives.

— And some more folks are retiring from Microsoft, in addition to those featured Tuesday in a GeekWire story on the company’s first-ever voluntary retirement program:

• Nir Michaely, Azure software engineering manager, closes out 26 years with the company.
• John Ballard, principal security researcher, departs after nearly 30 years.
• Kristen Mattoni, senior product marketing manager, is leaving after 15 years.

It’s not surprising that Microsoft is looking to turn its Copilot platform into a “Super App,” given that its rivals are doing the same. But Microsoft is going about the task in a way that doesn’t follow its usual playbook, by putting a big bet on a consumer-savvy hire from the outside with some feather-ruffling ways.

The company’s newly minted Copilot Executive Vice President Jacob Andreou came to Microsoft from Greylock Partners and before that, Snapchat-maker Snap. Andreou currently oversees more than 11,000 Microsoft employees, according to a recent profile in Fortune.

Microsoft is bringing onboard another former Snap (and Discord) vice president, Peter Sellis, to help, GeekWire has learned. Sources say Sellis will be leading Copilot Design, Growth and Engineering, reporting to Andreou.

Andreou is part of a recently formed Copilot Leadership Team. His charter is to lead the “Copilot experience” by driving design, product, growth and engineering, as outlined in a March 2026 reorg memo from CEO Satya Nadella. He is one of a small group charged with shaping the future of Copilot, alongside others focused on the underlying Copilot platform and AI models.

Given Andreou’s Snap background, his plan to meld Microsoft’s consumer and enterprise Copilot experiences makes sense. It won’t be a snap, however. (See what I did there?)

Even though both share the Copilot brand, consumer Copilot and Microsoft 365 Copilot don’t work the same way or use the same data sources or architecture. To boot, Microsoft hasn’t had a lot of luck with this kind of consumer-enterprise unification, as evidenced by the low interest in and uptake of its free, consumer-focused Teams product compared to its business-focused Teams collaboration offering.

The 33-year-old, Los Angeles-based Andreou seemingly is undaunted by the challenge and is pushing some employees to clock 12-hour days to keep up with younger, AI-focused companies, Fortune reports.

Microsoft was infamous for requiring employees to work long hours and weekends during crunch times leading up to delivering Windows NT and Windows 95, but not so much in recent years. Microsoft is known as a place where outsiders often struggle to thrive compared to those who climb the corporate ladder for years, making Andreou’s approach feel even riskier.

Andreou has been a big backer of the Tasks productivity layer in consumer Copilot, which is still in public preview. Tasks, which enables Copilot to handle actionable items, is similar to the recently released Copilot Cowork layer that is part of Microsoft 365 Copilot. (I asked Microsoft if the two would merge as a single Cowork-type offering at some point but was told the company had no comment.)

However, the holy grail remains the “Super App.” With the Copilot Super App, Microsoft is looking to give consumers and business users a reason to stay within Copilot regardless of the AI task with which they – or their agents – are engaging.

“Come summer, we will be bringing coding to all knowledge work within one Copilot Super App. That’s really exciting. So you’re going to have Chat, Cowork, and Code all in Copilot,” Nadella told Microsoft Build conference attendees in early June.

Microsoft isn’t the only AI-focused company working on extending its AI coding capability beyond just developers. Nor is it the only one betting on the Super App concept.

• OpenAI is working to turn ChatGPT into a Super App that brings together ChatGPT and Codex into a single environment that operates like a personal assistant.
• Anthropic is extending Claude to become a Super App (though it hasn’t used that terminology), as well, by creating a single environment that combines productivity, development and automation tools.

The Copilot Super App isn’t Andreou’s only focus. He tells Fortune that AI model choice and home-grown AI model excellence also are among his key priorities.

Microsoft is expanding model choice in the Copilot Cowork feature beyond Anthropic to include OpenAI and soon, Microsoft’s own Cowork 1 model – which may be based on Microsoft’s hosted version of the open-source DeepSeek model. Cowork 1 will be the newest addition to Microsoft’s growing pool of Microsoft-developed models, seven of which debuted at Build this year. Microsoft is seeking to position itself as the champion of lower cost, efficient models built for those who are token-maxxed out.

Andreou definitely has his work cut out for him as a consumer guy in a heavily enterprise-centric company.

Microsoft 365 Copilot and consumer Copilot are just two of more than two dozen different “Copilot”-branded commercial offerings available across the various Microsoft product teams, which can feel overwhelming.

Microsoft also needs to give users a clearer way to find and use the quickly expanding stable of first- and third-party agents, like the OpenClaw-based Microsoft Scout personal assistant. Will Andreou and his Super App quest bring at least some order to the Copilot and agent madness? We’ll know more sometime this summer.