Dissecting the Great Tech Outage of 2024

Estimated reading time: 3 minutes

A software update wreaked havoc across the globe last week, causing major problems for hospitals, airlines, banks, major retailers, and other businesses. As of Monday, hundreds of flights across the United States were still canceled.

The company responsible, CrowdStrike (CRWD), makes software meant to keep private companies and government agencies safe from cyberattacks. But on Friday, the world watched what happens when an industry behemoth makes a serious mistake.

Massive Outage

CrowdStrike, based in Austin, Texas, says on its website that it serves 500 companies on the Fortune 1000 list. For many organizations, its software is a vital defense against hackers and increasing ransomware attacks.

When CrowdStrike sent a faulty software update to Windows users, those computers began to reboot constantly, making it difficult to send a widespread fix from a distance. Instead, the faulty code needed to be removed from each computer individually.

On Saturday, Microsoft (MSFT) said in a blog post that the outage affected 8.5 million Windows users and was a reminder of the “interconnected nature of our broad ecosystem.” Even though it wasn’t Microsoft who was responsible for the bad code, its contract with CrowdStrike severely affected some of its customers.

Fallout

The aftermath of the mass IT outage is bringing up questions that Microsoft alluded to in its blog post: Is the world too interconnected?

Moreover, the cost of the outage could be as much as $1 billion, per a CNN report citing Anderson Economic Group, which calculates the economic cost of disruptions like this. But who will pay up in the end is unclear between legal protections, contract language, and effects that are slowly petering out.

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