Despite one of the largest IT outages in history and a resulting loss of nearly $20 billion in stock market value, cybersecurity firm CrowdStrike remains competitive.
CrowdStrike, the US cybersecurity company, faced one of the most serious IT outages in history on July 19. Despite the massive impact on the systems of numerous companies, including Delta Air Lines, which reported losses of $500 million, CrowdStrike estimated the impact on its own annual revenue at only $100 million. This represents a rejection of about 2.5 percent compared to the previous forecast.
The market reacted skeptically, however: CrowdStrike's market value has fallen by nearly $20 billion since the crash, costing the company far more than the forecast revenue losses. Analysts suspect that this strong reaction is partly due to legal risks, as lawsuits could be threatened. However, CrowdStrike emphasizes that customer contracts contain liability limitations and the company has insurance policies to minimize financial losses.
Meanwhile, shares of competitors Palo Alto Networks and SentinelOne rose 10 to 20 percent, suggesting that the market sees their competitive position against CrowdStrike as strengthened. However, some experts believe this assessment is overly pessimistic. CrowdStrike's existing customer base is considered stable because removing and replacing cybersecurity modules is complex and costly.
One potential risk could be that the event impacts CrowdStrike's ability to attract new customers. Despite the outage, the company's main selling point – the ability to detect and prevent cyber risks – remains unchallenged. CrowdStrike's products are still considered market leaders, and the strategy of offering multiple services through one platform is showing results: nearly half of its customers spend more than $100,000 and use eight or more of the modules offered.
CrowdStrike's crisis communications have been well received by the cybersecurity community, which is notable given the incident, and could be critical to maintaining trust in the company.
However, the risk remains that the failure could delay ongoing contract negotiations and allow new and existing customers to negotiate better terms. Nevertheless, the example of CrowdStrike shows that even serious errors do not necessarily lead to lasting damage.
Memory in the original
