CrowdStrike global IT outage led to at least $1.5 billion in losses, $200m in damages in NSW alone

The global IT outage that disrupted workplaces around the world last week cost businesses an eye-watering amount of money.

The global IT outage that disrupted workplaces around the world last week cost businesses more than a billion dollars from lost revenue, productivity and other consequences, experts have estimated.

On Friday afternoon local time, 8.5 million Windows-based computers and laptops around the world displayed the dreaded “blue screen of death”.

It was later revealed to be a bug wrought from a software update, originating from Texas-based cyber security firm CrowdStrike.

The technology fail brought much of the globe to a standstill, bringing all kinds of businesses to their knees including banks, supermarkets, hospitals, airlines and media outlets.

One American cyber expert estimated that compensation claims could easily top US$1 billion ($A1.5 billion).

It looks like it will end up being a lot more than that, based on the fact that in NSW alone, businesses racked up an eye-watering $200 million bill in damages, Business NSW estimated.

Travelers rest in a US airport two days after many travellers were rerouted or had their flights cancelled as airlines slowly come back online, following the CrowdStrike outage. Picture: Joe Raedle/Getty Images/AFP

CrowdStrike has yet to address questions about how it plans to compensate customers.

Its CEO George Kurtz said over the weekend so far the firm is concentrating all its efforts on fixing the problems, and that he believed most customers had been understanding.

“My goal right now is to make sure every customer is back up and running,” Mr Kurtz said.

“I think many of the customers understand it’s a complex environment and staying one step ahead of the bad guys requires these content updates.”

Under Australian law, it’s required to offer compensation in the event of a major failure of one of its products – which in this case would definitely qualify.

The outage caused airlines to ground more than 5,000 flights worldwide, leading to other business losses like accommodation costs for stranded customers.

It’s likely the hundreds of thousands of impacted businesses will seek compensation

The embattled IT company is about to hit with a slew of demands for compensation, experts predict, which could devolve into lawsuits if an agreement can’t be reached.

“If you’re a lawyer for CrowdStrike, you’re probably not going to enjoy the rest of your summer,” Wedbush Securities tech analyst Dan Ives said.

The blue screen of death.

Anderson Economic Group, a US research firm that specialises in calculating the losses during business disruptions, has estimated that already the bill CrowdStrike might have to pick up could exceed US$1 billion.

The company’s CEO, Patrick Anderson, told CNN “This outage is affecting far more consumers and businesses in a way that ranges from inconvenience to serious disruptions and resulted in out of pocket costs they can’t get back easily”.

Airlines are expected to be the most costly businesses to reimburse. 

Originally published as CrowdStrike global IT outage led to at least $1.5 billion in losses, $200m in damages in NSW alone