Suppose if a person have to use microsoft account for the work, then is it better to use microsoft products only rather than also signing up for google or other companies. I know privacy focused alternatives exists, but my main point is if I am stuck with a privacy invasive company, is it better to use their products rather than signing up for other providers even as they already have my data?
It’s better than multiple privacy invasive providers, sure. It wouldn’t be better than multiple providers if the other providers are not as privacy invasive as Microsoft (very low bar).
I would just try to use services that are as privacy-respecting as possible, personally 
I mean, say you have to use Microsoft Office for whatever reason. That doesn’t mean you should also use Outlook instead of something like Proton Mail, merely to minimize the number of providers you’re interacting with.
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Depend, using multiple one will mean each one has less data about you. But it also means the likelihood of a data breach is greater.
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I think that’s a really weird way to think about it. You should be thinking about what specific data you’re giving each provider not just the number of providers. Like what are you comfortable with Microsoft having etc. You have a lot of control of what data these companies get it’s not an all or nothing thing.
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Yeah, I get your point about using less privacy invasive options but these are really not possible in most scenarios especially in jobs. I tried to apply for a job and proton/tuta mail wasn’t allowed. Only gmail or microsoft and then they worked only on google/microsoft sheets. Many jobs are like that. For personal accounts too, I use services like youtube and stuff, hence protonmail or many privacy protecting services are not very feasible as they are just extra services handling very less. Isn’t this better to stick with one provider in this case for better privacy?
Exactly and also why subject to data collection by multiple providers even if they’re privacy preserving, they still log something. So it’s essentially opens a person to more data breaches as well as data collection by multiple providers.
You don’t have to log-in to watch Youtube. And even when you have to login, using alliases is better for privacy. I personallu had ZERO cases of a provider refusing Proton Mail, although some (5%) do refuse or discriminate against alliases.
TLDR: Yes
One company (especially a big one that gets a lot of scrutiny) getting exclusive access to your data doesn’t mean you should go signing up with many other companies to give up your data.
If you choose your settings correctly, then Microsoft might legally only be allowed to use most of your data for internal processes like statistics on what apps you prefer. Or use your profile to sell to advertisers only on their Bing search engine (advertisers can market to your specific demographic, but don’t know who you are).
Giving up your data to those other companies would not be wise. Their legal structure might allow them to put all our data in an spread sheet and sell everything they know to advertisers. Or their security is “password123”, and all your data is stored in a spreadsheet for a hacker to copy.