Microsoft recently published a TFS Online Security Whitepaper that talks about the different security controls Microsoft uses. They describe, in my opinion, reasonable protections given the state of the market today.
[I]s his code safe from Microsoft?
The paper mentions the following controls to protect from Microsoft employees:
- Encryption of data at rest via SQL Server TDE (Transparent Data Encryption).
- Encryption of data in transit via HTTPS.
If employees must get access during "a live site incident or other approved maintenance activity, which is logged and monitored", access is restricted to those that need access and have passed background checks.