Thematic Spotlight: CrowdStrike Causes the Biggest IT Outage Ever

Over the weekend, a botched update installed by cybersecurity giant CrowdStrike to Microsoft computers has caused what many are calling the biggest IT breakdown in modern history.¹ A routine security update, initially intended to improve security measures on Windows’ enterprise machines, left roughly 8.5 million devices paralysed, stuck on the so-called “Blue Screen of Death”.² Within hours of CrowdStrike’s mistake, more than 3,000 flights had reportedly been cancelled by affected airports, US customs were left frozen on the Mexican border, and supermarkets grinded to a halt as global EFTPOS systems went offline.³

While the scale of CrowdStrike’s blunder is unmatched, global outages caused by the major service providers have had plenty of precedents. For instance, in November 2020, an AWS outage disrupted a wide array of online services and applications, affecting millions of users globally.⁴ Similarly, in September 2020, an Azure outage impacted services worldwide due to a DNS configuration error.⁵ However, the cause and scope of CrowdStrike’s outage are more concerning because it came from a significant oversight in their update process. Reports suggest the disaster was caused by the firm’s failure to follow industry best-practices – pushing an update live globally without localised testing. In response, investors have pummelled the stock, which has fallen more than 30% since the incident.⁶

Cybersecurity stocks broadly, however, have not been sold down indiscriminately. SentinelOne, a smaller player in the endpoint security industry, has enjoyed the fruits of CrowdStrike’s downfall. The firm rallied by as much as 21% after CrowdStrike was revealed to be the cause of the global outage.⁷ Investors continue to recognise the importance of Cybersecurity as a core element of operation for modern businesses, perhaps more so, now that CrowdStrike’s mistake has emulated the impact a bad actor could have on the global economy.

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