Observed Signal · Sep 16, 2021 · Product Launch · Source: OnlineMarketing.de · Impact: 4/5 · Sentiment: Positive
Microsoft launches passwordless accounts
Microsoft is moving to end passwords by introducing passwordless accounts for Microsoft accounts. The initiative offers authentication alternatives including the Microsoft Authenticator app, Windows Hello, security keys, and verification codes sent by email or SMS. Microsoft began rolling out these options for business users in March to support remote work and reduce password-related attack surfaces. The company notes that almost all Microsoft services are now passwordless, with over 200 million users already adopting the alternatives, and more to follow. Users enable passwordless access by linking their Microsoft Account to the Authenticator app and selecting the new method on account.microsoft.com, with the option to revert at any time. Satya Nadella publicized the vision via a tweet on September 15, 2021, and Vasu Jakkal explained the initiative to The Verge, underscoring a broader shift toward credential-free security across consumer and enterprise ecosystems.
Technical Release by Major Platform introducing passwordless authentication with potential industry impact.
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Key Takeaways & Evidence Grounding
- Microsoft introduced passwordless authentication options for Microsoft accounts, including the Authenticator app, Windows Hello, security keys, and verification codes via email or SMS.
- Options were rolled out to business users in March to support remote work and increase security.
- Nearly all Microsoft services are passwordless, with over 200 million users already using the alternatives.
- Users can enable passwordless access via account.microsoft.com and can revert the method at any time.
- Satya Nadella tweeted the passwordless vision on September 15, 2021.
Connected Companies & Entities
1 Entity mappedRelated Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
Microsoft makes Passkeys default in Entra ID
Microsoft announced that passkeys will become the default authentication method in its Entra ID identity system starting September 1, 2026. Users who currently rely on SMS or voice call codes for multi-factor authentication (MFA) will be required to switch; Microsoft will continue to support SMS and voice codes only for companies that explicitly request it until February 2027. The change will be rolled out gradually, prompting affected users to register passkeys at their next MFA sign-in. Microsoft is also expanding support for device-bound and synchronized passkeys and adding administrative management controls. The company cited rising success rates of AI-powered phishing (reported up to 54% click rates versus ~12% for conventional phishing) as a key reason for the shift. Passkeys are based on FIDO2 and WebAuthn standards and replace passwords with cryptographic credentials tied to biometric or PIN-based device authentication.
Microsoft warns against SMS-based 2FA over AI phishing
Microsoft has warned IT administrators that SMS- and voice-based two-factor authentication (2FA) are increasingly vulnerable due to AI-assisted phishing and easier SIM-swapping. In an internal email, the company recommended migrating to phishing-resistant methods such as passkeys. Microsoft said it has observed a strong rise in AI-driven attacks with higher click-through rates that aim to capture passwords and MFA codes. As a consequence, Microsoft will disable SMS- and voice-based authentication for Entra ID accounts starting February 1, 2027; a timeline for personal Microsoft accounts has not yet been announced.
Windows 11 Search Upgrade, Copilot Gets File Access
Microsoft announced two upcoming updates for Windows 11: an enhanced search feature and expanded Copilot capabilities. The new search allows users to directly adjust settings like dark mode, take screenshots, and change volume from the search bar, with future ability to compose and send messages. Copilot's 'Hybrid Intelligence' feature, introduced at a Microsoft event, enables the AI to access local files and perform actions across the OS, such as finding, renaming, zipping documents, and attaching them to emails. Jacob Andreou, EVP of Copilot, demonstrated this in a tax return example. The rollout will be gradual, requiring user permission for file access. The search upgrade is expected later this year, with no exact date specified.
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