Is Microsoft Sentinel data lake the future of affordable threat visibility?

Security teams have been forced into tough choices for years. Store all your logs and risk blowing the budget. Keep only the essentials and lose critical context when an incident hits.

For mid-sized organisations already stretched on resources, it’s a frustrating and familiar balancing act.

Now, with the public preview of Microsoft Sentinel data lake, that balance might finally shift.

The trade-off that held everyone back

If you’ve ever tried to investigate an incident only to realise the logs have aged out, you’ll know the pain.

• A suspicious sign-in was flagged but the related DNS logs are gone.
• A threat report drops new IOCs but you can only search what’s still in your analytics tier.
• You need to verify user activity from three months ago but retention cuts off at 30 days.

To solve this, some teams built custom lakes. Others archived logs they never looked at. Many more just lived with the risk.

Sentinel data lake promises to change that. It introduces a cloud-native, long-term storage tier, purpose-built for security. High-volume logs go to the lake, not the analytics tier.

Keeping costs down while maintaining full visibility when you need it.

How Sentinel data lake supports deeper investigations

Imagine this: An endpoint alert triggers, tied to a service account. You want to look back at sign-in patterns, but 30-day retention doesn’t cut it. You’re stuck.

With the data lake, you’re not.

Logs that used to be dropped can now be kept cost-effectively and queried on demand. No need to rebuild infrastructure or export from backups. Just longer timelines and better answers.

This will become even more powerful from October 2025, when Microsoft Defender Threat Intelligence (MDTI) will be built directly into Sentinel and Defender XDR.

With over 84 trillion daily signals at your fingertips, SOC analysts will be able to scan new indicators against old logs instantly.

Using Defender Threat Intelligence for advanced threat hunting

We know from experience that attackers bide their time, playing the long game before striking. Lurking in dormant accounts. Quietly escalating privilege. One-off outbound connections. These are easy to miss in short windows.

With long-term data in the lake, that changes:

• Scan a year of Entra ID logs for dormant account use
• Match new threat intel against historical DNS traffic
• Test new detection rules on six months of real data

MDTI adds serious horsepower here, giving you enterprise-grade intel, without the enterprise-grade complexity.

What impact will Sentinel data lake make to compliance management?

The new data lake also looks like it’ll offer some interesting benefits around compliance management too.

Changing compliance criteria is seeing more and more audits asking for longer data retention, clearer evidence trails, and access to historical activity.

And when a regulator, auditor or insurer asks for evidence, speed matters.

The introduction of a native data lake could make that process more straightforward. With longer-term logs accessible directly inside the Microsoft environment, and auxiliary data sources beginning to surface in the Defender portal, there’s potential for a more unified view.

It’s not going to replace governance or eliminate all effort. But it does signal a move towards something security teams have been pushing for: compliance reporting that doesn’t rely on luck, last-minute backups, or spreadsheet archaeology.

Sentinel data lake could change the relationship between cost control and coverage

This release addresses a long-standing limitation in how security teams manage cost, coverage and context.

By making long-term retention affordable and accessible, Microsoft is removing a major blocker to full-scope investigations, historical threat hunting and compliance readiness. And with Defender Threat Intelligence now built in, retrospective analysis becomes faster, deeper and more accurate.

For Microsoft-first organisations, this marks a shift from selective visibility to sustained situational awareness. The ability to see more, search further back, and act faster, without breaking the budget.

There’s more to come, but this update sets a clear new standard for what SME security teams should expect from their SOC platform.

Watch this space or better still, get in touch with us to find out more.

Want to hear more about how to make significant savings on your Sentinel ingestion costs? Watch our Microsoft Sentinel Cost Management Masterclass here.

Q&A: Sentinel data lake at a glance

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