What Microsoft Can Learn From CrowdStrike’s Outage

SPEAKER_1 (0:00)

Let's bring Miley back in, turn our attention to Microsoft in this outage with Jay Aldebert, who's the Chief Growth Officer of our International Services. Jay, good afternoon to you. Friday the 13th, I mean, I say no more. I mean, do we know anything more about what is going on here? Any closer to understanding what's gone down?

Jay Aldebert (0:20)

The two comments that I'm hearing circulated is the sustained improvements, and secondary is serviced degradation. They're not calling it clean, they're not calling it complete. That's the only concern I have.

I don't know when it's going to come.

Miley (0:35)

So Jay, when we look at this, I mean, when Microsoft goes down, yes, it's an irritation that we lose access to our e-mail and to its software, but it's certainly a much bigger situation than that. I mean, this is productivity, this is sales, this is potential customers. How big is the actual economic cost of an outage like this? I mean, I know for us personally, we felt irritated, but there's a much bigger component here.

Jay Aldebert (1:00)

So people are going to see what the big companies and how it affected them. They're going to see the insured individuals, in other words, the people that make insurance claims against disruption, in terms of their business.

Where you don't see it and where it's not really measured, I guess, is the small, medium-sized business market. So productivity, yes, but cash flow is the big thing that we see and the calls we've received over the last 24 hours. Very specifically, people invoicing, they use their email to invoice, but in most cases, we're not talking about Net 30, we're talking about pay upon receipt.

So for small, medium-sized businesses that need that cash flow in, not being able to email out something specific like a QuickBooks Online invoice and being able to get that back. On top of that, being able to pay their employees. A lot of people use outside services such as an ADP, that the communication between payroll and obviously what comes from their bank and then what's put into their employee bank, all done by email that was heavily disrupted, that some will get paid today, some will get paid on Saturday. Obviously, the consumer or the employee in this particular case, has to make sure ends meet for a day and it sounds ridiculous. But in some cases, that is very important that the payment has to win because they have payments going out.

SPEAKER_1 (2:23)

I know a lot of Aussies who didn't mind spending Friday at the pub, even if they had to go there at 10 o'clock in the morning. But I know that there's much more serious implications of this. I mean, it's affected airlines, it's affected shipping, it's affected health care services, schools, businesses as well. A lot of people are comparing this to what we saw from AWS and CrowdStrike. Remember that blue screen of death that Friday afternoon? And some actually saying this disruption looks like it's even bigger than that. Can we take anything away from those particular episodes as perhaps a lesson as to what might happen next for Microsoft as to how this will all be repaired and sorted out?

Jay Aldebert (3:05)

Yeah, so two sides of it. Number one, CrowdStrike, obviously you saw what happened to Fortune 500 companies. They were saying it's about 4.5 billion. When you look at what Cover, which does the risk modeling, they're saying about $16 billion in terms of what's being lost.

What's next is they're saying, hey, it was an update. My concern is they don't have the exact cause and when people don't have the exact cause, the public starts speculating and that's where the concern comes. I'm not just talking about the stock market, obviously that's your realm and people speculate all the time. But when people are speculating, we've heard so many different stories. Our clients are calling in saying we think it's Iran, we think it's AI, we think it's these different aspects. That besides what it does to their business and the annoyance to the business is the concerns they have because there is no direct answer of what the cause is here.

I'm dealing more with that on calls right now than workarounds as it relates to payroll and covering invoices.

Miley (4:09)

And so, Jay, do those concerns then lend these companies to think about not relying on a single provider, perhaps creating their own backstop of some kind or having a multi-provider solution in case this does go down again?

Jay Aldebert (4:27)

Yeah, the difficulty becomes obviously, you look at Microsoft 365, it's one of the biggest games in town. The amount of security it offers, portals, etc. And obviously, the integration side in most commercial users. So working around and saying, I'm going to use my Yahoo or MSN or my Gmail account, there is issue with security. We deal with documents, but very specifically, I get your four years of financials of 20,000 businesses a year, and those have to go through a security portal. I can't just use those accounts. So a lot of times, the issue is people are going to look for workarounds and it's for those just common communication emails. But there are other things like financials being sent for people looking at financing for, let's just say, homes or vehicles, whatever. Those need a secure line just like our business needs a secure line when we're looking at the financial integrity of a company.