Global computer outage

The global computer system disruption affected a series of global service sectors, especially the stock market and banking and finance...

Notice of technical incident of CrowdStrike, a company providing security solutions Falcon. (Source: The Conversation)

On July 19, a Microsoft cloud service outage caused hundreds of flights to be delayed or canceled, while banks, media companies and other companies around the world were forced to temporarily shut down. Microsoft's cloud service unit, Azure, said the problem involved virtual machines running Windows and CrowdStrike. The virtual machines are currently rebooting and Azure is reviewing possible solutions to minimize the impact.

The incident caused the stock price of the US technology giant CrowdStrike to lose more than 11% in the trading session on July 19.

According to an announcement from CrowdStrike, the incident was determined to be caused by an error in the company's security system software update, leading to a global outage of Microsoft 365 software services such as Teams and OneDrive.

CrowdStrike is one of the world's most prominent cybersecurity service providers, with nearly 30,000 registered customers. The company has a market capitalization of about $83 billion and is a favorite of investors, thanks to its high revenue growth and profit margins. In 2023, CrowdStrike's stock price doubled, along with the rising wave of global technology stocks.

According to Reuters news agency on July 20, most trading activities returned to normal on July 19. However, as of the morning of July 20, some consequences were still unresolved, such as some automated teller machines (ATMs) of JPMorgan Chase bank were still in a "temporary" state.

Global credit rating agency Fitch said the latest cyber security incident should “remind” authorities of the need to increase oversight of information technology service providers.

Monsur Hussain, a managing director at Fitch, noted that financial institutions’ reliance on third parties has increased in recent years. It is part of the strong digitalization taking place in the sector. While the economic benefits are attractive, Hussain noted that they can also bring systemic risks.

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