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The US-based technology firm CrowdStrike‘s July 19 update is estimated to cost $5.4 billion to the US Fortune 500 companies, according to the insurer Parametrix reporter, The Guardian reported on July 24 (BST) as the cybersecurity firm announced to make changes in its system to prevent such a crash from happening again.
The estimated financial losses exclude those of Microsoft, whose systems suffered a global operation failure after the update. Sectors like Banking, Healthcare and major airlines, are expected to experience the most impact, according to the insurer Parametrix quoted in the report.
According to the report, the total insured losses for non-Microsoft Fortune 500 companies are likely to range from $540 million to $1.08 billion.
Multiple industries are struggling to recover from the damage caused by the Crowdstrike outage, which failed payment systems, grounded airlines, and caused a crisis in hospitals. According to the report, experts describe it as the largest IT failure in history.
The situation on July 19 also showed the world how modern technology systems are built on risky grounds, and one faulty code in a single update can bring down global operations, the report said.
CrowdStrike’s damage analysis:
CrowdStrike is a multibillion-dollar technology company that has lost nearly 22 per cent of its market value on Wall Street since the system failure. The company has apologized for causing the international software outage, releasing a report on Wednesday stating what caused the incident in the update.
“A Rapid Response Content update for the Falcon sensor was published to Windows hosts running sensor version 7.11 and above. This update was to gather telemetry on new threat techniques observed by CrowdStrike, but triggered crashes (BSOD) on online systems between 04:09 and 05:27 UTC,” said the company in the Post Incident Review report. “Mac and Linux hosts were not impacted. Windows hosts that were not online or did not connect during this period were not impacted,” said CrowdStrike.
The Guardian reported that the update had a software bug that caused the 8.5 million Windows systems to crash on July 19.
The software company has plans to increase its software testing before issuing updates in the future and plans to release those updates gradually to prevent a widespread failure like that of July 19, as per the report.
CrowdStrike has a worldwide clientele of nearly 538 out of the Fortune 1000 companies, as per the company website. This shows the reliance of the corporates on the same products offered to keep the operations, as per the report.
Corporates have had a difficult phase recovering from the outage. Delta Airlines is still undergoing its difficult phase as the airline operator faces cancellations, reschedulings, and frustrated passengers. The Department of Transportation opened an investigation into the airline operator on Tuesday, July 23 over concerns about its handling of the issue, as per the report.
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Published: 25 Jul 2024, 07:04 PM IST
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