CrowdStrike Cyber Failure Will Cost Billions of Dollars

A flawed CrowdStrike software update that caused computer crashes, flight cancellations, hospital disruptions and internet outages worldwide may have cost Fortune 500 companies as much as $5.4 billion in revenue.

Fortune 500 companies operating in the healthcare and banking sectors are likely to suffer the greatest direct financial losses.

Given the numerous lawsuits and lawsuits, Crowdstrike likely faces billions of dollars in fines, legal fees, and lost revenue.

CrowdStrike is likely to be fined by U.S. government regulators. Worse, because CrowdStrike’s outage may have involved breaches and issues involving personal data, it could be investigated by European regulators, who could impose fines of up to 4% of annual revenue.

CrowdStrike is also likely to face a flood of class action lawsuits in the U.S., with U.S. law firms including one based in San Francisco Lieff Cabraser Heimann and Bernsteinare already reviewing and collecting data from customers regarding business losses that “will help us hold Crowdstrike accountable for their disruption of global business and its consequences for all internet users.”

What’s more, CrowdStrike’s customers could leave for competing firms, and the outage has already cost the company and its investors billions of dollars, including a loss in stock market value that the company is unlikely to recover anytime soon.

The original cause of the outage was an update that CrowdStrike had deployed to its flagship Falcon platform, which runs as a cloud-based service designed to protect businesses from cyberattacks and disruptions. The update contained a bug that caused mass outages of 8.5 million Windows computers.

CrowdStrike is one of the world’s most important cybersecurity firms, valued at about $83 billion before the crash. It serves about 538 Fortune 1000 companies, according to its website, and operates worldwide.

The incident significantly damaged CrowdStrike’s share price, with CrowdStrike shares falling to $294 per share and now trading at around $264. That’s a drop of over 20%, and the market capitalization could fall even further.

The consequences of a failed software update are severe, showing how many companies relying on one supplier of the same services to maintain business continuity.

CrowdStrike said it has plans in place to prevent a similar issue. These include additional sanity checks and enhanced testing, including local developer testing and content update and rollback testing.

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