image source, Getty Images
- Author, Natalie Sherman and Liv McMahon
- Role, BBC news
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Shares of cybersecurity firm CrowdStrike plunged more than 13% as the company braces for the fallout from a global IT outage.
Chief security officer Shawn Henry said the incident was a “gut attack” for the firm, which was previously one of the most trusted names in the industry.
“We have failed the very people we pledged to protect and to say we are devastated is a huge understatement,” he said.
Many businesses are still recovering after a botched “content update” crashed 8.5 million Microsoft Windows computers worldwide last week.
The problem required a manual restart in some cases.
Mr. Henry, a former executive assistant director of the FBI, said the weekend was the “most challenging 48 hours” of his 12 years at the company.
He vowed to use the incident as an opportunity to “come out better and stronger than ever.”
“The trust we had built up over the years was lost in buckets in a matter of hours and it was a gut punch,” he said in a LinkedIn post on Monday.
“But that pales in comparison to the pain we’ve caused our customers and our partners.”
This was far more than any other airline.
Delta said Monday that more than half of its IT systems are Windows-based and require manual patching. She said the software she uses to manage flight personnel requires the most time and manual support to fix.
“Everyone at the company is working around the clock to get this operation where it needs to be,” Delta CEO Ed Bastian said in a video message to employees Monday.
The day before, he apologized to customers, as US Transportation Secretary Pete Buttigieg warned, the government had received complaints of “continued disruption and unacceptable customer service” at the firm.
Other bodies, such as Britain’s National Health Service, said their systems were operating more normally.
Cabinet Office Minister Ellie Reeves said in the House of Commons on Monday that most sectors affected by the CrowdStrike bug had mostly recovered, including aviation, rail and marine systems.
But she warned that some “minor disruption” would continue, including in the NHS.
She added that the government would work with the National Cyber ​​Security Center and other partners to “review lessons learned.”
The incident showed how the modern world is dependent on “complex and interconnected IT systems and how crucial it is to be prepared for such events”, the minister told MPs.
Founded in 2011, CrowdStrike boasts approximately 29,000 customers worldwide, including US and UK government agencies and some of the world’s largest companies.
The company’s shares were up nearly 40% this year before the incident.
But the hit to CrowdStrike shares on Monday followed an 11% drop on Friday, reflecting the severity of the incident. The company’s stock price ended trading at less than $264, down more than 13%.
Some investors are betting that the firm’s rivals will benefit from its current struggles, which have exposed the world’s dependence on one big player and drawn the attention of antitrust regulators.
Sentinel One, for example, saw shares rise more than 8% on Monday.
Analysts said that despite the current damage to CrowdStrike stock, they did not foresee long-term damage to the business.
“The reality is that despite CrowdStrike’s big failure last week, there are few alternatives to CrowdStrike and the costs of switching are high,” Gene Munster, managing partner at Deepwater Asset Management, which is known for its technology investments, wrote on social media.
“In other words, when the company reports its July quarter in late August, I expect the commentary to indicate unknowns about customer retention in the near term. That said, I expect few customers in the long term.”
Wedbush Securities analyst Dan Ives said it will be crucial for CrowdStrike to resolve its issues this week.
“This will take some time to settle in, but it does not change our positive long-term view of CrowdStrike or the cybersecurity sector,” he wrote in a note on Monday.
Reporting contributed by Chris Vallance