You can listen to the Front on your smart sneaker every morning to hear the latest episode. Just say play the news from The Australian. From the Australian, Here's what's on the Front. I'm Claire Harvey. It's Monday, July twenty two. One in three millennials aged eighteen to thirty four have skipped meals to save money in the past twelve months. As the cost of living crisis bites in Middle Australia. More than half of households have cut food spending and
a quarter have dropped doctor's visits. That exclusive survey is live now at the Australian dot Com dot a You taxpayers have spent more than four million dollars for CrowdStrike, the company behind Friday's catastrophic global internet outage, to protect the Department of Defense, spy agencies and the Future Fund. In today's episode, the outage exposed how much we rely on electronic transactions. So is this a moment for cash
to return? In nineteen ninety eight, in New Zealand's biggest city, Auckland, the power went out and it stayed out, not for a few hours or a couple of days, for five weeks. Here's how Radio New Zealand and TV three captured the drama.
This is Morning Report with Jeff Robinson and Shawn Plunkett in Auckland on Monday, February twenty third, the day Auckland City stood still. The hot and dry weather in Auckland over January and February appears to have been the trigger for the cables to fail one after the other.
Emergency services tackling a freak electricity crisis that has paralyzed the center of Auckland said today that health and safety issues were now paramount.
Restaurants, schools, TV stations, every shop, every street light. The main drag Queen Street roared with the sound of diesel generators. New Zealanders still keep their kitchen drawers full of candles and matches. The Auckland power outage was one of those moments when you realize the layer of modernity that protects us is pretty thin.
It's just unbelievable.
Jared Lynch is, The Australian's Technology editor. On Friday afternoon, that glimpse of life without modernity happened to the whole world.
The catastrophic failure caused chaos of banks, businesses and airports across the globe.
A massive worldwide computer outage cripples US hospitals, banks, and airlines.
A simple security update triggered a worldwide tsunami of technological breakdown. The problem with technology, if it's good, is that it's adopted in such a widespread way that we become completely dependent.
It was getting towards late on a Friday afternoon, so you were looking forward to being able to knock off work, and then I couldn't access our work system to file a story, and I thought it was my computer because I was working from home.
In the next few moments, Jared texted his colleagues at The Australian to see if anyone else had the same problem, and they did, and then one said something that really got Jared's attention. A colleague said he just tried to return an item to a Bunning's hardware store and they said their systems were down.
I thought, well, is that a coincidence or it's a bit odd. I rang up Bunnings.
I said what's going on and they said, oh, it's one of our supply It's called CrowdStrike. I said, ah, okay, So then I went on down detector and just saw dozens of Australian companies. I had this massive spike in out each activity and thought, we have a problem here.
So what were the next steps for you as a reporter?
It was just to do good old fashioned shoe lever reporting and that was just to ring up all these companies that were on down detector saying what's going on? And oddly some of the companies said, what are you talking about. More troubling though, is when I actually ran CrowdStrike, because I were my first porter call. I rang their agency here in Australia to say, look, there's this problem.
What's going on? They said, what problem?
And I said, there's dozens of Australian companies that are reporting outages.
You haven't heard about this?
No?
And they said have you spoken to these companies? I said, yeah, I've spoken to a few of them. Don't you know what's going on?
No? No, no, no, no.
And it was another five hours until I got a response from CrowdStrike. Now that's just not acceptable and it just exposes a gaping flow in our sovereign it capability.
I mean, I grew up in the country Clare.
There was the old saying right, you buy a car from the local car dealer because if something goes wrong, you can take it to the car dealer and they'll fix it. In this case, there are reports that Sydney's CrowdStrike office was deserted on Friday afternoon. All these companies couldn't pick up the phone to someone to say what's going on, and in this day and age, that's just not acceptable.
The CrowdStrike incident lasted less than twenty four hours in its most intense phase, but there are computers and laptops all around the world that will have to be manually rebooted by IT staff, a process likely to take days or weeks. Most big companies in Australia, from Quantas to Woolies and Coal's and our own company, News Corp Australia engages CrowdStrike to provide a product called Falcon, which sits on the laptops and desktop computers. Falcon's job is to
protect the user's system from attack. That means CrowdStrike has to interact with whatever system of software is on the laptop or desktop, like Microsoft Windows or Apple's iOS. Here's Crowdstrike's chief executive George Kurtz. Later on Friday explaining what went wrong.
We're deeply sorry for the impact that we've caused customers, to travelers, to anyone affected by this, including our companies. So we know what the issue is. We're resolving and have resolved the issue now. The system was sent an update and that update had a software bug in it and caused an issue with the Microsoft operating system. That was the extent of an issue. The issue in terms of a bug.
That was related to our update.
Friday's outage only affected devices running Microsoft Windows. And that's interesting because CrowdStrike has had serious beef with Microsoft going back months after the break. So how crowdstrikes aggressive attacks on Microsoft have come back to bite it? Plus, is this a moment for cash to come back? The best coverage of tech is in the Australian twenty four to seven. You can join our subscribers at the Australian dot com
dot au and we'll be back after this break. One of the reasons Crowdstrike's outage is interesting is that crowdstrikes style until now has been elbows out criticizing other organizations and particularly Microsoft, for their approach to safety.
It's quite funny there's been this argibargie.
That's been happening between CrowdStrike and Microsoft for quite some time. Crowdstrike's chief executive, George Kurtz, has been very quick to throw at Microsoft, particularly around cybersecurity, and last year on an earning's call, he said they've been operating the same filed model that McAfee and simtech have been using for
the past twenty five years now. If you think the main thing that keeps executives up at night is a cyber breach, a mass disruption like this, if you hear those sort of comments, you think, oh, well, these people kind of know what they're talking about.
And indeed their growth has actually been phenomenal.
Their share prices more than doubled, their annual revenue has been growing at a rate of sixty four percent. They've had this stunning reputation until now. So companies have been using CrowdStrike as a way to fend off cyber attacks denial of service, which is similar to what we saw on Friday, where people's laptops are rendered useless. They couldn't access their systems. Even though this wasn't a cyber attack, it had that effect. But the last thing they thought
is the company that should be defending this. This sort of activity and disruption would achieve just that virus software upgrade.
So it must be pretty embarrassing for CrowdStrike that it's actually an update that they tried to execute that has failed. Or do you think this goes back to the same issue. They will continue to blame Microsoft for having inadequate systems because this upgrade didn't affect iOS for example, did it No, I.
Don't think they can blame Microsoft for this. It was their software upgrade, and the software upgrade basically affected the brain of Windows, which caused all these Windows based PCs, laptops and other devices to render what is known the blue screen of Death, and people just couldn't access them. They couldn't do their work, and across the globe there's reports that companies have lost billions of dollars as a result of this.
Many of those companies will now seek compensation. Organizations that are planned for an outage, like Triple O. Dispatching services which quickly shifted to pen and paper were okay, but in today's cash free world, many companies had no backup plan at all.
Technology is fantastic.
It does make our lives easier and You can go out for a run with only an Apple Watch and be able to go buy yourself a coffee with a tap. You don't have to be carrying your phone or a wallet with your coins.
Jingling a round.
Has become that easy for us to transact in this modern age, and technology has become as essential to our economy as running water. The problem is is when it sneezes, we all catch a cold, and it's a reminder that well, actually, maybe we should have a few hundred dollars stashed away somewhere in the house or in our wallet. Cash is king, and there's a reason why it is so.
Finally, Jared, what do you think happens to CrowdStrike now? Is this a fatal blow for this company or are they too deeply embedded in systems to suffer too much?
Well, the question is who else do you turn to? No doubt, this has been a major blow to their reputation, but they are a gorilla in this space. They've had this problem, they don't want to have it happen again because they've been talking a massive game and they've probably got the best engineers in this space. So as frustrating as it was, it could even be more frustrating to be able to change, given how embedded they are.
Jared Lynch is The Australian's Technology editor. There's a major change in the way Australians give birth. Just twenty percent of babies will be born in private hospitals this year amid a maternity care crisis. Find out more by joining ours subscribers at the Australian dot com dot au