The Microsoft Outage: A Wake-Up Call for CrowdStrike and IT Security Vendors
The July 19th Microsoft outage, caused by a software update issue from cybersecurity firm CrowdStrike, likely feels like a distant memory to many. Most organizations affected by the outage were able to recover quickly, with 82% of respondents in our expert network, the Vanson Bourne Community, reporting that they were back online within a working day. But what about CrowdStrike? What long-term impact did this have on their reputation and brand? And what lessons can other companies learn from this incident in case they face similar challenges?
Is There Such a Thing as Bad PR?
On one hand, the outage might have inadvertently turned CrowdStrike into a household name. Before July 19th, ask someone on the street what CrowdStrike did, and you’d likely get a blank stare. Ask them after the incident, and you might hear something like, “That’s the company that broke the world.” In one dramatic moment, CrowdStrike became a globally recognized brand.
On the other hand, this incident has also been a significant blow. The company’s share price dropped by 32% in the 12 days following the outage. They are now facing lawsuits from investors and Delta Airlines passengers, with Delta itself threatening legal action for a $500 million loss linked to the disruption. Additionally, 74% of respondents in our Vanson Bourne Community survey reported having lower trust in CrowdStrike after the incident. More than two-thirds (68%) are now less likely to recommend CrowdStrike as a cybersecurity provider.
So, how can CrowdStrike—and other brands facing similar crises—recover from this? What long-term effects will this have on their business and client relationships? And most importantly, how can they rebuild trust?
The Critical Role of Trust in IT Vendor Relationships
Trust is everything when it comes to selecting technology vendors, especially in the cybersecurity space. Our research shows that trust and reputation are often more important than price for our Community members when making vendor decisions. Trust is built over time through performance, personal relationships, and how a vendor responds in a crisis. If a vendor fails to respond effectively to a challenge, or doesn’t learn from its mistakes, it risks irreparably damaging the relationship.
How Can CrowdStrike Rebuild Trust?
- Immediate and Clear Communication
Clear communication during and after a crisis is critical. As one of our Community members pointed out, “Nothing is more frustrating than a delayed flight, especially when you don’t know when you’ll take off.” Similarly, during an IT failure, what matters most is understanding what’s happening, what’s being done to fix it, and when the issue will be resolved.
CrowdStrike’s crisis communication during the July 19th outage received mixed reviews. Some felt that the updates were insufficient and overly technical, leaving many customers confused and frustrated. In hindsight, it seems the communication window may have already passed for CrowdStrike. But is it too late? Perhaps not entirely.
- Transparency and Accountability
Transparency is essential after a crisis. Customers want to know that their vendor acknowledges the problem and owns up to the mistakes. CrowdStrike took a step in the right direction when its President Michael Sentonas accepted the “Most Epic Fail” award at Def Con in August. This public acknowledgment was a rare but commendable move that helped rebuild some goodwill.
But transparency shouldn’t stop there. CrowdStrike will need to ensure that they are not only admitting mistakes but also learning from them. This includes conducting a thorough ‘lessons learned’ review and communicating the remedial actions taken to prevent a recurrence. Clients need to feel reassured that this won’t happen again.
- Demonstrating Improvements
CrowdStrike has already outlined several actions aimed at preventing future issues, including improving its testing processes and staggering update rollouts. However, it will take time for clients to see the effectiveness of these measures in action. The real challenge will be demonstrating that these improvements are not just lip service but are having a tangible impact on service quality.
Measuring the Impact of a Crisis: Brand Research
For CrowdStrike, and any other brand facing a crisis, it’s important to measure the impact of the event on their reputation and relationships with clients. This is where brand research can play a crucial role. By tracking brand perception over time, companies can benchmark the impact of a crisis and adjust their response accordingly.
Effective brand research doesn’t just focus on a single metric. It should provide a holistic view of how a crisis affects different stages of the customer journey—from awareness to consideration—and how perceptions of key brand attributes, like trust, may shift in response. This information is invaluable for informing future positioning, messaging, and crisis management strategies.
For example, brand research can help organizations identify:
- Changes in awareness following a crisis.
- Shifts in customer trust and perception.
- How the event affects customer loyalty and likelihood to recommend.
By understanding these dynamics, brands can adapt their strategies to better engage their customers and recover quickly after a crisis.
What’s Next for CrowdStrike?
It’s clear that CrowdStrike has a long road ahead in terms of rebuilding trust and restoring its reputation. However, by embracing transparency, accountability, and continuous improvement, they have a chance to recover and even come out stronger. Ultimately, it’s the actions they take now that will determine the long-term impact of this crisis on their business and their relationships with customers.
For other brands facing similar challenges, this is a reminder of the importance of crisis management, open communication, and having a solid framework for learning and improving from setbacks.
100 IT decision makers from the Vanson Bourne Community were interviewed in the UK in August 2024. All came from organisations across a range of sizes and private and public sectors. As a member of the Vanson Bourne Community you’ll gain access exclusive to a variety of insights reports just like this one, based on research with our members. Sign up for free here.
