THE PRACTITIONER'S COMPANION
Saturday 12 October 2024

IT outage compensation talk inevitable: CrowdStrike

The Australian president of CrowdStrike has apologised for the cybersecurity company's role in causing an outage that crippled global IT systems. Friday's outage, which hit an estimated 8.5 million Windows devices worldwide, was caused by a logic flaw in a software update sent by cybersecurity provider CrowdStrike to its customers, the company's Australian president Michael Sentonas told Sky News.

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THE company at fault for a global IT outage that hobbled banks, airlines, supermarkets and media organisations, acknowledges compensation for impacted businesses will have to be discussed.

Friday’s outage, which hit an estimated 8.5 million Windows devices worldwide, was caused by a logic flaw in a software update sent by cybersecurity provider CrowdStrike to its customers, the company’s Australian president Michael Sentonas told Sky News.

Mr Sentonas “deeply” apologised and said CrowdStrike’s focus was on remediating the issue to ensure customers were back up and running.

But he conceded it would be hard to avoid affected businesses seeking compensation or litigation.

“Those conversations have to happen and will happen,” Mr Sentonas said on Tuesday.

“That phase will come after we get our customers remediated.”

While the full cost of the outage is difficult to quantify, some experts have estimated the impact to businesses globally at over $1 billion, with Business NSW estimating the bill to top $200 million in that state alone.

Those conversations have to happen and will happen

Michael Sentonas, President Crowdstrike Australia

Airline Jetstar was particularly hard hit, with hundreds of cancelled flights leaving thousands of customers stranded.

“I personally apologise for what happened,” Mr Sentonas said.

“We understand the disruption and the distress that we caused a lot of people. We put out an update, which we do regularly and we’ve been doing for over a decade, and we got this very wrong.”

Australian Industry Group chief executive Innes Willox said it remains to be seen whether businesses would be able to seek compensation, either from CrowdStrike directly or via some form of government redress scheme.

“It’s impacted different businesses and different sectors of the economy in wildly different ways, and the reality is we’re going to be seeing the tailpipe of this for weeks to come,” Mr Willox told ABC News.

Regardless, the fallout for CrowdStrike itself is likely to be lengthy and costly.

The company’s share price has plummeted by more than 30 per cent since the outage, erasing billions of dollars from CrowdStrike’s market value.

Meanwhile, pressure is mounting on CEO George Kurtz to testify before the US Congress with regulatory or punitive action not out of the question.

Australia’s Home Affairs Minister Clare O’Neil said the outage was likely the largest in history.

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