World’s ‘biggest IT fail’ in numbers: Billions lost, millions of devices impacted, thousands of flights hit

Image credit: Sourced from Microsoft

The recent global Microsoft, CrowdStrike-caused outage, hailed by Elon Musk as the “biggest IT fail ever,” has had far-reaching consequences across multiple industries.

The incident, linked to a bug in a CrowdStrike update that impacted Microsoft’s Azure and Office365 services, has resulted in significant financial losses, operational disruptions, and widespread inconvenience.

Financial impact

The outage led to a staggering $23bn loss in Microsoft’s market value within hours. Data from Stocklytics revealed that Microsoft’s share price fell from $443.52 to $440.37, a 0.71 per cent decrease, severely affecting the company’s $3.27tn valuation.

Similarly, CrowdStrike saw its shares plummet by 21 per cent, equating to a $16bn drop in valuation.

Economic damages from this event are estimated to reach tens of billions of dollars, according to Reuters.

On Wall Street, the S&P 500, which hit a record high on Tuesday, dropped 0.7 per cent to its lowest close in three months, ending a three-week winning streak, on the back of the outage. The Dow Jones Industrial Average fell 0.9 per cent, and the tech-focused Nasdaq Composite declined 0.8 per cent.

In Europe, London’s FTSE 100 finished 0.6 per cent lower. Paris’ CAC 40 fell 0.7 per cent, and Frankfurt’s DAX dropped 1 per cent.

Asian markets were also impacted by the CrowdStrike glitch and ongoing concerns about China’s economy. Hong Kong’s Hang Seng index fell 2 per cent, and Tokyo’s Nikkei declined 0.2 per cent.

Media companies such as Sky News in the UK and ABC News in the US went offline as well.

Nir Perry, CEO of CyberWrite, described the outage as an “event that can produce what could be defined as an insurance catastrophe.” However, many businesses might not be fully covered due to exclusions in their policies or the need for separate coverage for such non-malicious events, he added.

The outage affected major companies, including BetMGM, Amazon, Xfinity by Comcast, Delta Airlines, Bank of America, Visa, United Airlines, Apple Support, and PlentyOfFish.

Operational disruptions

Microsoft reported that the outage disabled 8.5 million computers globally, marking the largest cyber blackout in history.

This figure, represented less than one per cent of Windows machines worldwide, which was highlighted in a blog post by David Weston, Microsoft‘s vice president of Enterprise and OS Security. He acknowledged that “while the percentage was small, the broad economic and societal impacts reflect the use of CrowdStrike by enterprises that run many critical services. “

According to CrowdStrike’s website, it has 29,000 customers around the world, including some of the biggest companies in the US.

Graham Steel, head of Cybersecurity Product at SandboxAQ, commented, “This major outage has been caused by a bug that wasn’t caught by CrowdStrike before rolling out an update to thousands of companies globally. This new outage should spur all companies to put in place systems that will analyse every update before it is allowed into their company.”

Aviation industry hit hard

The aviation sector experienced severe disruptions, with over 5,000 flights cancelled globally on July 19.

Cirium, an aviation analytics company, reported that 5,078 flights, or 4.6 per cent of scheduled flights, were cancelled. Delta Airlines alone cancelled 1,250 flights in addition to the 3,500 it had already scrapped.

This morning during the IT outage compared to yesterday morning over the US. You can see the delay in flights resuming in today’s video. pic.twitter.com/KF8H2UDiyv

— Flightradar24 (@flightradar24) July 19, 2024

Broader implications

Matt Williamson, SVP and industry principal at Endava, emphasised the need for the finance industry to prepare for future risks, stating, “These events should serve as a warning to companies searching for the ‘golden bullet’—technology that promises to enhance their offerings and modernise their customer experience.”

Williamson stressed the importance of real-time monitoring, cloud environments, and international backup collaborations to ensure resilience. He also highlighted the need for sophisticated threat detection and response systems, regular security audits, and multi-factor authentication to bolster cybersecurity.

Preparedness for power outages and system glitches is crucial, Williamson added. Implementing uninterruptible power supply (UPS) systems, backup generators, and cloud-based solutions for data storage can ensure continuity of critical operations. Adherence to regulatory standards like GDPR and PCI DSS, along with a thorough crisis management strategy, is essential for safeguarding against future incidents.

The full extent of the long-term ramifications of this IT outage remains to be seen, but the immediate impact underscores the importance of robust cybersecurity measures and disaster preparedness across industries, he added.

Read: Microsoft global outage: Major banks, airlines and media impacted