Who Will Pay For the Costs of Crowdstrike’s Outage?

8.5 million Windows devices were ultimately affected by the Crowdstrike outage.

What one cybersecurity expert said appears to be the “largest IT outage in history” led to the cancellation of more than 5,000 commercial airline flights worldwide and disrupted businesses from retail sales to package deliveries to procedures at hospitals, costing revenue and staff time and productivity… While CrowdStrike has apologized, it has not mentioned whether or not it intends to provide compensation to affected customers. And when asked by CNN about whether it plans to provide compensation, its response did not address that question. Experts say they expect that there will be demands for remuneration and very possibly lawsuits.

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

But there could be legal protections for CrowdStrike in its customer contracts to shield it from liability, according to one expert. “I would guess that the contracts protect them,” said James Lewis, researcher at the Center for Strategic and International Studies…

It’s also not clear how many customers CrowdStrike might lose because of Friday. Wedbush Securities’ Ives estimates less than 5% of its customers might go elsewhere. “They’re such an entrenched player, to move away from CrowdStrike would be a gamble,” he said. It will be difficult, and not without additional costs, for many customers to switch from CrowdStrike to a competitor. But the real hit to CrowdStrike could be reputational damage that will make it difficult to win new customers… [E]ven if customers are understanding, it’s likely that CrowdStrike’s rivals will be seeking to use Friday’s events to try to lure them away.

One final note from CNN. Patrick Anderson, CEO of a Michigan research firm called the Anderson Economic Group, “added that the costs could be particularly significant for airlines, due to lost revenue from canceled flights and excess labor and fuel costs for the planes that did fly but faced significant delays.”

See also: Third Day of 1,000+ Cancelled Flights, Just in the US, After Crowdstrike Outage .