Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday.
A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill.
The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.”
Photo: AFP
“Today CrowdStrike has become a household name, but not in a good way, and this will take time to settle down,” Wedbush Securities Inc managing director and senior equity research analyst covering technology Dan Ives said.
The breakdown quickly fueled discussions about Internet giants’ power over the increasingly digital world economy, with more activity taking place in the computing “cloud” or on a few apps or platforms.
When those platforms have flaws — or are deliberately attacked — the world seems to collapse.
In the past few months, entire healthcare systems and industries have been paralyzed after hackers infiltrated their systems, leaving consumers at their wits’ end and companies at a loss.
“I think we’re just getting a taste of some potential effects of real reliance by the financial sector and sectors across the economy on a handful of cloud companies and other key systems,” US Consumer Financial Protection Bureau Director Rohit Chopra told US business news channel CNBC. “There are just a handful of big cloud companies where so much of the economy is now resting.”
The world has seen a major shift to cloud computing, where companies use servers offered by big tech giants for their computing needs instead of their own infrastructure.
Amazon.com Inc, through its Amazon Web Services company, is the world leader, followed by Microsoft’s Azure and Alphabet Inc’s Google Cloud Platform.
Friday’s breakdown was caused by a malfunctioning software update fed to Windows users by CrowdStrike, which specializes in cybersecurity for cloud-based companies.
“We’re deeply sorry for the impact we’ve caused to customers, travelers, and anyone affected by this,” CrowdStrike CEO Kurtz said in an interview on the US morning television program Today on the National Broadcasting Network.
Microsoft blamed the problems on CrowdStrike, but industry insiders said that the issue stems from entrusting the digital world to just a few key companies.
“It’s going to continue to raise issues for systems or businesses wholly dependent on Microsoft — this issue of concentration risk,” said Cyber Threat Alliance CEO Michael Daniel, a former White House cybersecurity coordinator. “How do you balance the benefits of having everybody on the same operating system with the concentration risk that poses?”
Callie Guenther, senior manager of cyberthreat research at Critical Start, said that the shift to big players amplifies the effect of any system failure or vulnerability.
One error, like CrowdStrike’s on Friday, threatens society’s smooth functioning worldwide, she said.
Andrius Minkevicius, CEO and cofounder of CyberUpgrade, a Lithuanian cybersecurity start-up, said that businesses must fight the complacency often associated with outsourcing technology to the big vendors.
“Today, we’re seeing an example of those who relied mostly on vendor-offered cyberprotection without additional contingency plans and are now suffering reputational and financial damage,” he said.
Experts say that this incident would likely invite scrutiny from regulators and officials.
“CrowdStrike will probably have to let some outside people come in and examine how this happened,” Daniel said.
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