The global technology outage sparked by CrowdStrike’s faulty update will cost US Fortune 500 companies $5.4bn, insurers estimated, as the cybersecurity firm vowed to make changes to prevent it from happening again.
The projected financial losses exclude Microsoft, the tech giant whose systems suffered widespread failures in the crash.
Companies in banking and healthcare are expected to be hit the hardest, according to the insurer Parametrix, as well as major airlines. The total insured losses for the non-Microsoft Fortune 500 companies could be between $540m and $1.08bn.
A variety of industries are still struggling to rectify the damage from CrowdStrike’s outage, which grounded thousands of flights, caused turmoil at hospitals and crashed payment systems in what experts have described as the largest IT failure in history. The outage exposed how modern tech systems are built on precarious ground, with faulty code in a single update able to bring down operations around the world.
CrowdStrike – a Texas-based, multibillion-dollar company that has lost about 22% of its stock market value since the outage – has repeatedly apologized for causing the international tech crisis. The company issued a report on Wednesday detailing what went wrong in the update.
The primary cause of the failure stemmed from an update that CrowdStrike pushed to its flagship Falcon platform, which functions as a cloud-based service intended to protect businesses from cyber-attacks and disruptions. The update contained a bug which caused 8.5m Windows machines to crash en masse.
CrowdStrike stated in its postmortem that it plans to increase software testing before issuing updates in the future, and only roll out those updates gradually to prevent the widespread, simultaneous failures that took place last week. The company also plans to issue a more in-depth report on the causes of the outage in the coming weeks.
CrowdStrike is one of the world’s most prominent cybersecurity firms, and was valued at around $83bn before the outage. It services about 538 of the Fortune 1000 companies, according to its website, and operates around the world. That ubiquity made the consequences of its botched update particularly severe, showcasing how many companies are reliant on the same products to keep operations running.
Several companies have had an especially hard time recovering from the outage. Delta Air Lines is still in turmoil days later as it cancels and reschedules hundreds of flights, leaving frustrated passengers without the ability to get home and parents scrambling to reach their stranded children. The US Department of Transportation opened an investigation into Delta on Tuesday over its handling of the issue.
