Fortune 500 Companies to Lose $5.4 Billion in CrowdStrike Outage

Fortune 500 companies could lose $5.4 billion due to the recent CrowdStrike outage, with health, banking and airlines among the most affected sectors.

According to Parametrix Insurance, Fortune 500 companies, except Microsoft (MSFT), could lose $5.4 billion due to the recent CrowdStrike outage. It puts the average loss per Fortune 500 company at $43.64 million. Fortune 500 is an annual list of the largest 500 companies in the United States by revenue for their respective fiscal years. Fortune magazine compiles and publishes This list every year. 

Image: Parametrix Impact Analysis: CrowdStrike’s Impact on the Fortune 500

On 19 July, American cybersecurity company CrowdStrike’s faulty update to its security software crashed computers powered by Microsoft's Windows operating system worldwide. Nearly 8.5 million systems crashed worldwide, which is the largest outage in the history of information technology.

The CrowdStrike outage severely affected industries such as airlines, airports, banks, hotels, hospitals, manufacturing, stock markets, broadcasting, gas stations, and retail stores. The outage exposed the highly vulnerable nature of modern technology systems, as a single faulty code update crashed global operations. The Parametrix Insurance report noted:  

• About 25% of the Fortune 500 companies saw their operations disrupted due to the CrowdStrike outage.

• Airlines, banking, and healthcare were among the sectors most severely affected by the operational impact.

• When it comes to losses, health, banking, and airlines accounted for $1.94 billion, $1.15 billion and $0.86 billion, respectively.

• Fortune 500 companies, except Microsoft, could lose $5.4 billion due to the outage, as per the report.

• Globally, the outage could cost companies as much as $15 billion.

• As far as insured losses are concerned, it would cost:

• $0.54-$1.08 billion (10%-20% of the total loss) for Fortune 500 companies in the U.S., and

• $1.5-3 billion for companies globally.

Here is what happened to the shares of CrowdStrike and Microsoft, the tech organisations responsible for the outage.

• CrowdStrike Holdings, Inc. (CRWD) shares dropped 25% following the outage on 19 July. CRWD closed at $258.14 on 24 July.

• Meanwhile, Microsoft's shares (MSFT) fell barely 3% since the outage, closing at $428.9 on 24 July.

Though companies are recovering from the impact of the CrowdStrike outage, it will take longer for them to completely recover.