Security
- Hackers breach Microsoft 365 tenants via ConnectWise supply-chain attack
Attackers got hold of the ConnectWise Cloud Backup (formerly SkyKick) application identities and signed straight into customer tenants as the app, so MFA never came into play. Some service principals then gave themselves Exchange Administrator or even Global Administrator and added credentials to other apps. If you’ve ever used SkyKick or ConnectWise Cloud Backup, search every tenant for the listed application IDs, check app secrets and certificates added since 13 October, and remember that disabling the app doesn’t kill tokens that were already issued.
https://www.bleepingcomputer.com/news/security/hackers-breach-microsoft-365-tenants-via-connectwise-supply-chain-attack/ - AI-driven, large-scale nation-state campaign using ARTEX enables supply chain compromise
Microsoft attributes the ConnectWise compromise to Storm-0940, a China-aligned actor using the open-source agentic pen-testing framework ARTEX to try signing in to more than 2,250 tenants, sometimes reaching privileged cloud access in under three hours. Worth a look for the investigation guidance, including the advice not to delete the apps before you’ve reviewed their sign-ins. The bigger lesson is that attacks now run at machine speed through apps you’ve already trusted, so least privilege on multi-tenant apps and alerting on app credential and role changes matter more than ever.
https://www.microsoft.com/en-us/security/blog/2026/10/21/storm-0940-uses-artex-agentic-ai-connectwise-supply-chain-compromise/ - M365 Token Spray and Replay Campaign Compromises Business Email Accounts
Huntress tracked attackers replaying stolen post-MFA tokens from the 193.26.115.0/24 range against 79 organisations, then registering rogue Entra devices, swapping out MFA methods and hiding inbox rules ahead of payroll fraud. Good reminder that a password reset alone won’t clean this up: revoke sessions, remove rogue devices and MFA methods, and lock down device-code flow with Conditional Access. Then audit every mailbox for hidden inbox rules.
https://www.huntress.com/blog/token-replay-spray - Inside the LiteLLM 1.107.0 supply chain compromise: Credential theft through Python startup hooks
A poisoned LiteLLM release on PyPI and in official container images dropped Python startup files that steal AI, cloud, browser and SSH credentials whenever Python starts, even if LiteLLM is never imported. If you or your clients run AI gateways or dev boxes with Python, check for this version, rebuild the environment rather than just uninstalling, and rotate every reachable secret from a clean machine. It’s another sign that AI tooling is now a prime supply-chain target.
https://www.microsoft.com/en-us/security/blog/2026/10/23/inside-the-litellm-1-107-0-supply-chain-compromise-credential-theft-through-python-startup-hooks/ - Agents are your newest insiders. Security must move at their speed.
Microsoft’s identity team lays out how it wants agents secured: each gets its own Entra Agent ID, starts with no standing access, and receives task-scoped, time-limited Dynamic Permissions, with Dynamic Conditional Access tightening things as an agent’s risk rises. Discovery is also expanding to 60 local agent types, including Claude Code, Codex and GitHub Copilot. Still early, but this is the model to plan around, and the clear message is that agents should never simply inherit everything their user can reach.
https://www.microsoft.com/en-us/security/blog/2026/10/19/agents-are-your-newest-insiders-security-must-move-at-their-speed/ - Securing the agentic insider
This is the executive framing of the same story: Microsoft says frontier models can’t be trusted by default and pitches “Guardian Agents” in Project Perception to supervise every agent action in real time. Nothing groundbreaking, but it’s a useful piece to put in front of SMB owners who assume the agents they switch on are automatically safe. Expect agent governance to become a standing line item in security conversations.
https://blogs.microsoft.com/blog/2026/10/19/securing-the-agentic-insider/
Microsoft 365 & Windows
- Cloud Update allows more rollout waves with custom gaps
Now launched: you can set up more than three update waves using Entra ID groups and choose the delay between each one. That makes proper pilot groups for Office updates much easier to run. Worth a look if you’ve been stuck with a one-size-fits-all update ring for clients.
https://www.microsoft.com/microsoft-365/roadmap?id=558251 - Archive mailboxes can now grow past 1.5TB
Rolling out now. Until now an archive stopped working once it hit 1.5TB, so this helps the clients with huge, long-retained archives. Check which licences qualify before you promise it to anyone.
https://www.microsoft.com/microsoft-365/roadmap?id=560820 - Troubleshooting playbook for Auto labelling in SharePoint and OneDrive
A practical symptom-to-fix guide for Purview auto-labelling policies that run without labelling anything, covering missing prerequisites, simulation quirks, label priority and failure codes. It also confirms limits are rising tenant by tenant to 500,000 auto-labelled files a day and 20 million simulation matches. Worth bookmarking, but note it needs E5-tier licensing, so it applies to fewer SMB tenants than you’d hope.
https://techcommunity.microsoft.com/blog/microsoft-purview-blog/troubleshooting-playbook-for-auto-labelling-in-sharepoint-and-onedrive/4564103 - Create guidelines for a workbook with Copilot in Excel rules
You can now add a visible “.Rules” worksheet that tells Copilot in Excel how to format, lay out and calculate in that workbook, and the rules travel with the file when it’s shared. Good reminder that a bit of structure beats re-prompting every time. It’s an easy win for clients with standard reporting templates, though it’s only fully supported in English.
https://support.microsoft.com/en-us/excel/copilot/copilot-in-excel-rules - MC1515927 – Microsoft 365 Copilot: Critique and Council preview experiences will retire
The Critique and Council previews in Researcher will be retired between late October and mid-November 2026, while Researcher and Analyst themselves stay. This only affects Frontier program users who had access to those previews, so most SMB tenants won’t notice. If you’ve trained anyone on them, update your guidance and give the help desk a heads-up.
https://mc.merill.net/message/MC1515927 - Copilot Code: Make the power of coding accessible to everyone
Copilot Code is a new tab in the Copilot app where users describe a tracker, dashboard or app in plain English and Copilot builds it, grounded in their work data, then publishes it to the Microsoft-managed Copilot Managed Runtime. It’s rolling out through the Frontier program and needs a Microsoft 365 Copilot licence plus a usage-based spending policy, with local coding on PCs turned off by default. Still early, but expect a wave of citizen-built apps, so decide now who gets a spending policy.
https://techcommunity.microsoft.com/blog/microsoft-copilot-blog/copilot-code-make-the-power-of-coding-accessible-to-everyone/4562358 - What’s New in Cowork: Expanded plugins and role-based skills
Cowork now has ready-made role plugins for Sales, Service, Education and Legal, plus federated MCP connectors for live data from outside systems, with Power Platform connectors rolling out over the coming weeks. It can also kick off tasks automatically when a connected system changes, and admins control which plugins are available. Worth a look as a faster route to real Copilot value than building agents from scratch, but review those connectors before you turn them on.
https://techcommunity.microsoft.com/blog/microsoft-copilot-blog/what%E2%80%99s-new-in-cowork-expanded-plugins-and-role-based-skills/4566221
Cloud & AI
- Advancing digital sovereignty with greater control and choice
Microsoft is extending its Sovereign Cloud range: a Sovereign Control Panel goes into preview at Ignite, external key management with Azure Managed HSM is now generally available, and Azure Local adds multitenancy, Foundry Local and GitHub Enterprise Local. Nothing groundbreaking for most SMBs, but it’s useful ammunition when a client in a regulated sector worries about who controls their data. Azure Local multitenancy also opens up hosted sovereign services for larger MSPs.
https://blogs.microsoft.com/blog/2026/10/20/advancing-digital-sovereignty-with-greater-control-and-choice/ - Copilot Studio agents will be able to browse the web on their own
Copilot Studio agents will be able to use Computer Use to browse the web on their own, visiting sites, pulling out data and downloading files, and it’s in development for January 2027. It’s powerful, so put guardrails in place before clients start using it. Given this week’s security news, think hard about what those agents can reach.
https://www.microsoft.com/en-us/microsoft-365/roadmap?id=576272 - Microsoft empowers more than 330,000 Volkswagen Group employees with Copilot
Volkswagen has rolled Copilot out to more than 330,000 staff after a phased start with Copilot Chat, and it now has more than 26,000 agents active across the group in the past month alone. Nothing groundbreaking, but it’s a handy reference for SMB owners who want to see that Copilot works at scale. The phased approach of starting with free Chat and then moving to licensed Copilot is the same one I’d recommend for smaller clients.
https://news.microsoft.com/source/2026/10/21/microsoft-empowers-more-than-330000-volkswagen-group-employees-with-copilot - An AI-cloned free tool is being dubbed ‘the end of software’
The ABC looks at developers using AI to build near-identical free clones of Microsoft Office and Adobe Creative Suite, and at Reverse Engineer Anything, a trending GitHub tool that helps AI agents take apart and replicate existing software. Still early, and the legal ground is shaky, but expect clients to ask whether they can ditch paid licences for these clones. The real answer for business is support, security and compliance, not just features.
https://www.abc.net.au/news/science/2026-10-22/reverse-engineer-anything-ai-software-cloning/107271480
After hours
The Sixty-Year Mission Trailer – https://www.youtube.com/watch?v=HWQTlYjJf1c
Editorial
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