In a remarkable turnaround, CrowdStrike has not only recovered but surpassed the £24bn market value it lost following July’s catastrophic IT failure. The cyber security giant’s shares, which initially plummeted by over one-third in the fortnight after the incident, have now exceeded their pre-crisis levels.
Chief Executive George Kurtz has transformed what US House Homeland Security Committee chair Mark Green termed the “largest IT outage in history” into a strategic advantage. The incident, which disrupted airline operations, hospital services, and global broadcasting, seemingly hasn’t damaged customer confidence.
The Texas-based organisation’s flagship Falcon security software update triggered a “blue screen of death” error across 8.5 million Windows devices on 19 July. Despite insurers estimating billions in total losses, CrowdStrike maintained a 97% customer retention rate through September and reported £800m in quarterly revenues, marking a 29% year-on-year increase.
Delta Air Lines remains a notable dissenter, pursuing damages after estimating losses exceeding £400m. Their October lawsuit filed in Georgia accuses CrowdStrike of causing a “global catastrophe” through negligent testing procedures. CrowdStrike’s legal team has refuted these claims, arguing their liability is limited to “single-digit millions” by contractual terms.
The company’s recovery strategy included a £48m customer incentive programme, offering free subscription extensions and additional features. This approach has effectively doubled their “Falcon Flex” contracts to £1bn in the quarter ending September.
Industry analysts suggest the incident may ultimately benefit CrowdStrike, as scrutiny shifts towards Microsoft’s Windows operating system architecture. The crisis has sparked debates about third-party software access to Windows’ kernel, with Apple’s contrasting approach of restricting such access appearing increasingly prudent.
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