Global tech outage disrupts industries, highlights online risks

A worldwide tech outage crippled industries from travel to finance on Friday before services started coming back online after hours of disruption, highlighting the risks of a global shift towards digital, interconnected technologies.

A software update by global cybersecurity firm CrowdStrike appeared to have triggered systems problems that grounded flights, forced some broadcasters off air and left customers without access to services such as healthcare or banking.

U.S. President Joe Biden had been briefed on the outage, a White House official said.

CrowdStrike CEO George Kurtz said on social media platform X that a defect was found “in a single content update for Windows hosts” that affected Microsoft’s customers and that a fix was being deployed.

Microsoft said later on Friday that the issue had been fixed.

“We’re deeply sorry for the impact that we’ve caused to customers, to travellers, to anyone affected by this, including our company,” Kurtz told NBC News’ “Today” programme.

“Many of the customers are rebooting the system and it’s coming up and it’ll be operational,” Kurtz said. “It could be some time for some systems that won’t automatically recover.”

CrowdStrike shares plunged as much as 14.5% shortly after the Wall Street open before paring losses to trade down 8.5%. Its cyber rivals were up, with SentinelOne 3.6% higher and Palo Alto Networks up 1.7%.

Microsoft was down 0.2%.

“Earlier today, a Crowdstrike update was responsible for bringing down a number of Windows systems globally. We are actively supporting customers to assist in their recovery,” Microsoft chief communications officer Frank Shaw said in a post on X.

But even as companies and institutions began restoring regular services, experts said the cyber outage revealed the risks of an increasingly online world.

“This is a very, very uncomfortable illustration of the fragility of the world’s core Internet infrastructure,” said Ciaran Martin, professor at Oxford University’s Blavatnik School of Government and former head of the UK National Cyber Security Centre. While the core problem appeared simple, which should make it short-lived, its immediate impact was remarkable, Martin said.

“I’m struggling to think of an outage at quite this scale.”

Accelerated by the COVID-19 pandemic, governments and businesses alike have become increasingly dependent on a handful of interconnected technology companies over the past two decades, which explains why one software issue rippled far and wide.

DISRUPTION

Early on Friday, major U.S. airlines – American Airlines, Delta Air Lines and United Airlines – grounded flights, while other carriers and airports around the world reported delays and disruptions.

Banks and financial services companies from Australia to India and Germany warned customers of disruptions and traders across markets spoke of problems executing transactions.

“We are having the mother of all global market outages,” one trader said.

In Britain, booking systems used by doctors were offline, multiple reports posted on X by medical officials said, while Sky News, one of the country’s major news broadcasters, was taken off air and apologised for being unable to transmit live. Soccer club Manchester United said on X that it had to postpone a scheduled release of tickets.

Airports from Los Angeles to Singapore, Hong Kong, Amsterdam and Berlin said some airlines were having to check in passengers manually, causing delays.

Government agencies were also affected with the Dutch and United Arab Emirates’ foreign ministries reporting some disruptions.

As the day progressed, more and more companies reported a return to normal service, including Spanish airport operator Aena AENA.MC, U.S. carriers American Airlines, Frontier and Spirit SAVE.N, Dubai International Airport operator and Australia’s Commonwealth Bank CBA.AX.

U.S. Transportation Secretary Pete Buttigieg said transportation system issues appeared to be resolving and would hopefully be back to normal by Saturday, adding that the Federal Aviation Administration did not appear impacted.

LSEG Group also said its data and services were back up and running after an outage that caused some disruption across financial markets.

Still, industry experts weighed the potential impact for the sector of what one called the biggest ever IT outage.

“IT security tools are all designed to ensure that companies can continue to operate in the worst-case scenario of a data breach, so to be the root cause of a global IT outage is an unmitigated disaster,” said Ajay Unni, CEO of StickmanCyber, one of Australia’s largest cybersecurity services companies.

U.S.-based CrowdStrike, with a market value of about $83 billion, is among leading cybersecurity companies, counting more than 20,000 subscribers around the world, its website showed.