CrowdStrike and the Global IT Outage, Explained

A routine software update by CrowdStrike Holdings Inc. became a massive IT failure on Friday, July 19, grounding flights, upending markets and disrupting corporations around the world. The impact of the disruption, which was compounded by an apparently unrelated issue with Microsoft Corp.’s Azure cloud services, continued for days, wreaking approximately $5.4 billion of havoc on the Fortune 500, according to Parametrix.

The Austin-based cybersecurity company is a dominant supplier of software that protects businesses from ransomware attacks. CrowdStrike controls about 18% of the $12.6 billion global market for so-called “modern” endpoint detection and response software, behind archrival Microsoft Corp.’s 25.8%, according to market research firm IDC. Its software is considered among the best defenses against all kinds of emerging hacking threats, using artificial intelligence with traditional security strategies to try to keep up with attackers.