Global tech outage: Microsoft and CrowdStrike disruptions shake markets. "For the first time, we are dealing with a global blackout"
On Friday, a service outage affected Microsoft and CrowdStrike services, paralysing the operations of many companies worldwide and influencing stock markets.
On Friday, there was a global IT outage—two that overlapped each other. Problems were noted with the servers supporting the Microsoft Azure service and the machines using the antivirus service CrowdStrike.
Microsoft and CrowdStrike stopped working. "Global blackout"
For the first time, we are dealing with a true global blackout. What previously seemed like a science fiction invention has become a reality, revealing the fragility of modern technological systems. The scale of the contemporary world's dependency on a single technological company and the potential threats such concentration brings.
This event is comparable to Nassim Taleb's "black swan" concept. The disruptions affected individual users and large institutions, such as banks (including central banks), stock exchanges, and airports. They paralysed operations at the peak of the holiday season and caused chaos in many other sectors.
Impact of the outage on financial markets
Microsoft shares on the German stock exchange fell by more than 2 percent, while shares of CrowdStrike, which confirmed that the problem concerns their Falcon Sensor software, fell by nearly 14 percent. The experts note that although the outage was quickly identified and repaired, shares of CrowdStrike's competitors gained as much as 6 percent in pre-market trading.
The analyst predicts that the consequences of this incident may be long-lasting.
The decline in Microsoft's shares and many other companies affected by the blackout will likely negatively impact the main American indexes, as Microsoft, being the second-largest company in the world by market capitalisation, has as much as 8.7 percent of the Nasdaq 100 index and 7 percent of the S&P 500 index.
Lessons for the future
This situation should be a lesson for the entire technology and financial sector. In the words of Warren Buffett, the expert reminds us that "it takes many years to build a brand's trust, and just a moment to lose it." This event shows how fragile the reputation and market value of even the largest tech companies can be.
The situation points out the need to increase cybersecurity and diversify IT systems. Companies and institutions should consider strategies to reduce their dependency on single technology service providers to minimise the risk of similar incidents in the future.
Regarding the extent of the financial markets' damage caused by the outage, we will be able to assess it more fully on Friday afternoon. After 14:30 Greenwich Time, the New York Stock Exchange will begin operations.
