A Billion-Dollar Blunder

Microsoft Didn’t Notice Its Own Error at First

The global disruptions to the services of the U.S. software company Microsoft were caused by an internal glitch.(Bild: AFP/IDREES MOHAMMED)

The global disruptions to Microsoft services were resolved on Saturday. The outage lasted the longest for businesses—35 hours and 43 minutes, according to reports. The in-house glitch is likely to cost the software giant billions …

It is now clear that no cyberattack or artificial intelligence was behind the outage. The technical problem was a home-grown one. Services affected included email, communication via Teams, calendar functions, and the Microsoft AI assistant Copilot. The error occurred during an upgrade, the U.S. technology company announced. The original plan had been to expand network capacity.

The outage went unnoticed at first
The error was not initially noticed by those responsible, the company added. That changed as the servers became increasingly overloaded until they crashed. This triggered a sort of chain reaction. Microsoft officially refers to “server issues.”

There is no evidence of malicious activity, the company added. The problems began on Thursday evening and developed into one of the longest outages in the company’s history. Hundreds of millions of users worldwide were affected, including both individuals and businesses. For individual users, it took a little less time before they could use services like Teams and Copilot again. Early Saturday morning, the company finally announced that Outlook, Teams, and Copilot were all back up and running.

Initial Estimate of the Cost of the Outage
The U.S. think tank Anderson Economic Group estimates the potential losses caused by the Microsoft outage for the affected companies at more than seven billion U.S. dollars (equivalent to 6.3 billion euros). It is conceivable that the company may have to refund approximately 725 million euros in subscription fees. However, this estimate was based on a model calculation and did not include any fixed compensation payments.

Meanwhile, experts warned companies, schools, and government agencies against becoming dependent on digital services. “Anyone who becomes unilaterally dependent on key digital technologies risks production losses and competitive disadvantages in the event of a crisis,” said Ralf Wintergerst, president of the German industry association Bitkom.

“We are not only at the mercy of Microsoft’s technical expertise, but also at the mercy of the U.S. government. The U.S. government can use sanctions to ensure, in the blink of an eye, that individual organizations or even entire countries lose access to the Microsoft cloud,” IT security expert Christopher Kunz also pointed out. They recommend moving away from centralization around a small number of service providers.

We are not only at the mercy of Microsoft’s technical expertise, but also at the mercy of the U.S. government. 

Christopher Kunz, IT-Sicherheitsexperte

Second Outage This Year
This was already the second outage of Microsoft 365 services this year, following similar issues in January. Just last month, problems with the Azure cloud platform caused disruptions worldwide.