A Backup App Was Used to Reach Into Microsoft 365. Find Out Which Apps Hold Your Keys.
Attackers didn't guess a password. They signed in as a trusted app. Here is the list to make and the questions to ask your IT partner this week.
By John Martines · October 25, 2026 · 6 min
Microsoft says a China-aligned group used an AI hacking tool and a backup service's app access to go after more than 2,250 Microsoft 365 accounts. Here is what that means for a small business, and how to see which outside apps can get into yours.
It's Monday morning at a small dental office. Nobody clicked a bad link. Nobody gave away a password. Two-step sign-in is on for every person on staff. And yet, over the weekend, someone read the office manager's mailbox.
They didn't come in as a person. They came in as the backup service, the one that quietly copies everyone's email every night so nothing is ever lost. That service has a key to the whole account, and someone else got hold of it.
That is roughly what happened to a number of businesses this month. It's worth fifteen minutes of your week, because almost every small business has a few of these keys out there and nobody keeps a list.
ConnectWise makes software that many IT companies use to look after their clients. One of its products, Cloud Backup (it used to be called SkyKick), keeps copies of clients' Microsoft 365 email and files. To do that job, it connects to each client's Microsoft 365 as an app, with its own permission to read everyone's mail.
Someone got hold of the secret that app uses to sign in. With it, they could sign in to Microsoft 365 as the backup app itself. Two-step sign-in didn't stop them, because it protects people, and this wasn't a person signing in. It was software with a key.
How it got here:
- October 15, 2026: Microsoft spotted unauthorized sign-in attempts from an outside address, tied to the ConnectWise backup service.
- October 16: The security firm Huntress had confirmed unauthorized sign-ins at 162 Microsoft 365 accounts that use the service.
- October 17: ConnectWise switched off Cloud Backup and some related services, disabled seven of its app identities and canceled the stolen credentials. Customers couldn't restore from their backups while it was off.
- October 21: Microsoft named the group behind it, a China-aligned crew it calls Storm-0940. It said the group used an open-source AI hacking tool to automate the attack and tried to get into more than 2,250 Microsoft 365 accounts. Most attempts failed. In several cases, it went from first contact to high-level access in under three hours.
- October 23: ConnectWise said it was finishing security testing and would bring the service back in phases. It also said its findings don't show whether any one customer's account was affected. Its stored backups are encrypted, and it found no sign they were touched.
One more detail matters. Turning off the vendor's side stops new sign-ins. It doesn't undo anything an attacker already did inside an account, like adding a mail forwarding rule or a new admin.
You probably never bought ConnectWise. That is the point. Your IT partner picks tools to look after you, and each one asks for a key to your Microsoft 365 or Google Workspace. Backup. Email filtering. Phone systems. E-signature. And now, AI assistants that read your inbox and calendar.
Each of those keys is a door that doesn't care about your staff's passwords or their phones. If the company holding the key gets hacked, the door opens.
Three things are new this time.
The attack was fast. An AI tool did the trying and retrying. Under three hours from start to deep access leaves no time for a weekly review. Our piece on [patching inside a day](/articles/patch-window-one-day) made the same point about software updates.
The key was trusted. These apps are supposed to read everything. When they do something odd, it looks like normal work.
Your backup was the target. The thing you keep for a bad day was the way in, and on the bad day it was switched off.
1. Ask your IT partner one question today. "Do you use ConnectWise Cloud Backup, or used to use SkyKick, for us?" If the answer is yes, ask what they checked in your account: unfamiliar apps, unusual sign-ins, new forwarding rules, new admins. Ask how your email is being backed up while the service is down. Get the answers in writing.
2. Make one list of every outside app that holds a key. Ten minutes with whoever runs your IT. In Microsoft 365, the list lives in the Microsoft Entra admin center, under Enterprise applications. Each app has a Permissions page that shows what it was allowed to do. In Google Workspace, it's in the Admin console under Security, then Access and data control, then API controls. Write down each app, what it does for you, and who to call if that company gets hacked.
3. Remove the keys nobody uses. The trial e-signature tool from two years ago. The scheduling app you replaced. The AI note-taker someone tried once. Each one still has a key. Your IT partner can remove them, or in Google Workspace you can block an app outright. Fewer keys, fewer doors.
4. Stop new keys from appearing on their own. In both Microsoft 365 and Google Workspace, you can require an admin to approve an app before a staff member can connect it to company data. Turn that on. It also catches the AI tools staff find on their own.
5. Keep a second copy of what matters most. If your only backup is one service and it goes dark for a week, you have no backup that week. Ask your IT partner for a plain second copy of the essentials: the shared mailbox, the client files, the scheduling records. Then ask them to show you a test restore once a quarter.
6. Turn on the alerts you already pay for. Microsoft 365 and Google Workspace both have built-in alerts for risky changes, such as new forwarding rules, new admins and suspicious sign-ins. Ask your IT partner which ones are on. Make sure someone actually gets those alerts, and that it isn't only an inbox nobody reads.
- Which outside apps can sign in to our Microsoft 365 or Google Workspace, and what can each one do?
- If one of those companies is hacked, how would we find out, and how fast?
- What did you check in our account after the ConnectWise news, and what did you find?
- Where is our second backup, and when did we last test a restore?
- Who must approve a new app before it gets access to company data?
More of the work in your accounts will be done by software signing in on your behalf: backups, security tools and, more and more, AI assistants that read and draft. That is useful, and it isn't going away. The businesses that come through incidents like this one keep a short list of every key they've handed out, remove the ones they don't need, and know who to call. Make that list this week, while it's still a calm afternoon job.
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Sources (checked October 24, 2026). Microsoft's attribution to Storm-0940, the AI tool, the 2,250 accounts targeted and the under-three-hours timing: "China-linked hackers used agentic AI in attack on 2,250 Microsoft 365 tenants" (CSO Online, Oct 2026) and "Microsoft says China-aligned hackers used AI agents in ConnectWise attack" (The Next Web, Oct 2026), both reporting Microsoft Threat Intelligence's report of Oct 21, 2026; also Reuters via KFGO (Oct 21, 2026). Huntress's 162 confirmed accounts, the stolen app credential and why two-step sign-in didn't apply: "Stolen ConnectWise 'SkyKick' credential exposed Microsoft 365 tenants" (iTnews, Oct 2026) and "Hackers breach Microsoft 365 tenants via ConnectWise supply chain attack" (BleepingComputer, Oct 2026). The October 17 shutdown, seven app identities and encrypted backups: "ConnectWise suspends Cloud Backup service after supply chain attack" (The Record, Oct 2026) and SecurityWeek (Oct 2026). Phased restoration and no finding on individual accounts: ConnectWise Trust Center advisory (Oct 23, 2026). Existing access not undone by the shutdown: WatchGuard, "ConnectWise Cloud Backup: action recommended for Microsoft 365 tenants" (Oct 2026). Where to review app permissions: Microsoft Learn, "Review permissions granted to enterprise applications," and Google Workspace Admin Help, "Control which third-party and internal apps access Google Workspace data."