By George GloverFollow
Updated July 20, 2024, 11:58 am EDT / Original July 19, 2024, 4:06 am EDT
Microsoft service outages hit airlines, banks, and the London Stock Exchange on Friday. (DREAMSTIME)
Mass IT outages grounded flights and disrupted stock exchanges on Friday as an overnight content update by cybersecurity company CrowdStrike
CRWD-11.10% crippled Microsoft’s PC operating systems.
The number of people flagging problems with Microsoft’s 365 suite of apps and Azure cloud computing product spiked at about 1 a.m. Eastern time, according to data from Downdetector.com, a website that tracks service issues. Microsoft
MSFT-0.74% said later Friday that it had restored Azure.
CrowdStrike confirmed that a content update it had implemented had caused the crashes, which have left some PC users facing a so-called Blue Screen of Death.
“CrowdStrike is actively working with customers impacted by a defect found in a single update for Windows hosts,” a spokesperson for the company said in an emailed statement to Barron’s, adding that Friday’s outage wasn’t the result of a security incident or a cyberattack. Mac and Linux users haven’t been affected by the glitch.
The company’s CEO George Kurtz apologized for the global tech outage in an interview with NBC, adding that while there has been “a fix deployed,” solving the problem “could take some time.”
“Earlier today, a CrowdStrike update was responsible for bringing down a number of IT systems globally,” a Microsoft spokesperson said on Friday. “We are actively supporting customers to assist in their recovery.”
CrowdStrike’s stock, which before Friday’s glitch was up 34% for the year, fell 11% to $303.72 by earlier afternoon. That put it on pace for its largest percentage decrease since Nov. 30, 2022, when it fell 15%. The stock was the worst performer in both the S&P 500 and the Nasdaq 1oo, though even with that decline, its 19% year-to-date gain beats a 15% surge in the S&P 500.
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“This is as big of a negative IT event that we’ve seen globally in some time—if not ever,” Adam Borg, managing director for the investment bank Stifel, said in an interview. “Given the headline risk, the images we’re all seeing on TV, coupled with the really strong run in shares year to date and the premium valuation that the company has, it’s not surprising to see the stock trade off.”
Questions may also be asked of Microsoft, which has spent more than 40 years building its reputation as a trusted manufacturer of PCs and software. There is no indication that it was at fault for Friday’s outage, but its shares still took a hit, falling 0.9% to $436.54.
The tech meltdown “is not something that Microsoft can accept,” Gil Luria, a software analyst for the investment bank D.A. Davidson, told Barron’s. “They’ll have to go back and figure out how not to allow any other product that can connect to their platforms to cause this type of catastrophe. Even though the fault isn’t on them, there will be a cost and implications for them to prevent this from happening again.”
Microsoft’s rival Apple
0.06% traded 0.2% higher, while the benchmark S&P 500ES00-0.02% and tech-heavy Nasdaq CompositeCOMP-0.81% stock market indexes fell 0.6% and 0.7%, respectively.
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“We expect this outage to hurt the Big Tech companies who are also affected,” Kathleen Brooks, a research director at the online broker XTB, said. “It is hard to see risk managing to stage a meaningful recovery in Europe or the U.S. until this has been resolved.”
Major U.S. airlines including American, Delta, and United halted flights on Friday due to the tech outage, while banks in Australia, South Africa, and the U.K. also were affected, according to reports.
British TV channel Sky News was unable to broadcast live for a period on Friday morning, while the chaos delayed the opening of the London Stock Exchange by about 20 minutes and disrupted its news service.
Write to George Glover at george.glover@dowjones.com