Analysts predict the recent global tech outage caused by cybersecurity firm CrowdStrike CRWD could cost over $1 billion, but the question of who will foot the bill remains unanswered.
What Happened: Experts predict that there will be demands for remuneration and possibly lawsuits, CNN reported on Monday.
“If you’re a lawyer for CrowdStrike, you’re probably not going to enjoy the rest of your summer,” said Dan Ives, a tech analyst for Wedbush Securities.
On Friday, CrowdStrike was identified as the source of a massive global tech outage, which led to the cancellation of over 5,000 commercial airline flights worldwide and caused disruptions in various sectors, from retail to healthcare. The issue was traced back to a few bits of faulty code in a software content update by CrowdStrike.
The company acknowledged the issue in a social media post late Sunday, stating that a “significant number” of the approximately 8.5 million affected devices were back online. However, CrowdStrike has not addressed whether it plans to provide compensation to affected customers.
Despite the uncertainty, some experts believe that CrowdStrike’s customer contracts may shield it from liability.
“I would guess that the contracts protect them,” said James Lewis, a researcher at the Center for Strategic and International Studies.
While the final cost of the outage is yet to be determined, the damage to CrowdStrike’s reputation could be significant, potentially making it difficult for the company to attract new customers.
Why It Matters: The outage, triggered by a faulty update from CrowdStrike, impacted millions of Windows users, causing widespread disruptions to various services worldwide. The incident, which was not a result of a hacker attack, was due to a technical error in the software update.
Following the incident, Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency, criticized CrowdStrike’s faulty software update as a "serious mistake" with significant impacts on critical infrastructure operations across the world.
Price Action: On Monday’s pre-market, CrowdStrike shares were down 3.54% at $294.15 while Microsoft Corporation MSFT shares were up 0.7% at $440.15., at the time of writing, according to Benzinga Pro.
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Photo courtesy: Wikimedia
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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