The global technology disruption caused by CrowdStrike’s faulty update will cost US Fortune 500 companies $5.4 billion, insurers have estimated, while the cybersecurity firm has vowed to make changes to prevent it from happening again.
The projected financial losses exclude Microsoft, the tech giant whose systems suffered widespread failures during the crash.
According to insurer Parametrix, companies in the banking and healthcare sectors are expected to be the hardest hit, as are major airlines. total insured losses For Fortune 500 companies outside of Microsoft, the cost could range from $540 million to $1.08 billion.
Various sectors are still struggling to repair the damage caused by the CrowdStrike service outage, which led to the grounding of thousands of flights, chaos at hospitals and the collapse of payment systems in what experts have described as the largest IT failure in history. The outage exposed how modern technology systems are built on a precarious foundation, with faulty code in a single update capable of bringing down operations worldwide.
CrowdStrike, a multi-billion dollar Texas-based company that has lost about 22% of its stock value since the outage, has repeatedly apologized for causing the international tech crisis. issued a report on Wednesday detailing what went wrong in the update.
The root cause of the failure was due to an update that CrowdStrike pushed to its flagship Falcon platform, which operates as a cloud-based service intended to protect businesses from cyberattacks and disruptions. The update contained a bug that caused 8.5 million Windows machines to crash en masse.
CrowdStrike said in its subsequent analysis that it plans to increase software testing before issuing updates in the future and only roll out those updates gradually to avoid the widespread and simultaneous outages that took place last week. The company also plans to issue a more detailed report on the causes of the outage in the coming weeks.
CrowdStrike is one of the world’s largest cybersecurity companies and was valued at around $83 billion before the outage. It provides services to around 538 of the Fortune 1000 companies, according to its website, and operates around the world. That ubiquity made the fallout from its botched update particularly dire, showing how many companies rely on the same products to keep their operations running.
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Several carriers have struggled to recover from the service disruption. Delta Air Lines remains in crisis days later, having cancelled and rescheduled hundreds of flights, leaving frustrated passengers unable to get home and Parents fighting to reach their stranded children. The U.S. Department of Transportation opened an investigation into Delta on Tuesday over its handling of the matter.