What the Microsoft-CrowdStrike outage means for brand reputation

Incase you somehow missed it, last Friday a catastrophic software update from CrowdStrike, a cybersecurity firm based in Austin, Texas, wreaked havoc worldwide. The update, aimed at Microsoft Windows computers, led to widespread system crashes, crippling critical services and infrastructure.

CrowdStrike's update triggered the dreaded 'blue screen of death' on Microsoft devices, causing an endless cycle of reboots known as a 'doom loop.' This malfunction quickly escalated, paralysing flights, healthcare systems, and emergency services across multiple countries.

Major airports like Changi Airport in Singapore were thrown into chaos, experiencing massive delays and cancellations across Asia Pacific and globally. At Sydney Airport in Australia, travelers faced severe delays, with similar disruptions reported in Hong Kong, India, Dubai, Berlin, and Amsterdam.

Tech staff at affected companies were left scrambling, forced to either manually rectify the issue or wait for CrowdStrike's solution, resulting in operational mayhem. Ultimately George Kurtz, CrowdStrike's chief executive, publicly took responsibility for the blunder, emphasising the company's urgent efforts to issue a software fix.

But what does this debacle mean for the brands involved?

For one, the outage casts a glaring spotlight on the fragility of global tech infrastructure and the testing processes of cybersecurity firms. It underscores the dire necessity for rigorous testing and accountability in software updates to prevent such catastrophic failures in the future.

For Microsoft, the incident was undoubtedly a PR blow to its reputation. Clients depend on the platform's stability and reliability, and any disruption erodes this trust. Frequent or significant outages can push customers to explore alternative providers, jeopardising Microsoft’s position in the fiercely competitive cloud services market. Notably, Apple devices did not crash, and Macs continued to operate seamlessly, highlighting the stark contrast. During times of inconvenience and outage, brand loyalty often becomes very easy to question.

Aside from the direct parties involved, millions of businesses, including airlines and the travel industry, also bore the brunt of brand damage. Passengers endured delays and cancellations, compounded by inadequate communication, severely damaging brand loyalty. In such crises, customer frustration is often directed at the airline rather than the underlying tech issue. For example, tempers flared at Changi Airport as passengers realised they had missed their flights, leading to heated exchanges with staff.

A media intelligence report from Carma revealed that Microsoft received mixed global reactions following the outage, with 12.5% positive and a significant 46.2% negative. In Singapore, the sentiment was 15% positive and 45.9% negative. CrowdStrike fared even worse, with a staggering 50.2% negative sentiment and only 7.3% positive.

Jose Raymond, managing director at SW Strategies, backs these insights, emphasising that in a crisis, customers do not care who is at fault. "When a purchase is made, a contract is established with the brand, not its service providers. It is the brand’s responsibility to ensure all third-party providers meet the mark and do not erode the brand value built over time," Raymond explains.

Oliver Budgen, founder and CEO of Bud Communications, describes the situation as 'an unmitigated PR crisis' with 'enormous' economic repercussions that will continue to affect millions globally. His agency tracked over 823 pieces of coverage in Singapore alone, with brand sentiments plummeting. “The fallout is not just limited to Microsoft, CrowdStrike, their partners, and those directly involved—it undermines trust in internet-based companies and services as a whole,” Budgen adds. “It will be a tough battle for PR professionals to rebuild reputation and trust, which could take months. However, by acting quickly and adopting a proactive, transparent, and human-led approach, there’s a chance to mitigate the negative fallout and potentially even build brand love.”

Despite the negative sentiments for Microsoft and CrowdStrike, Carma's data showed that Changi Airport managed to maintain 50.7% positive online reactions compared to 37.4% negative ones, with many praising the airport's ground staff for their efficiency and calmness amid the disruption.

Divika Jethmal, head of marketing, Asia at Carma, notes that companies with a strong positive reputation year-round can recover from associated crises relatively quickly. "In the case of Changi Airport, their reputation for excellent customer service enabled effective crisis mitigation and recovery," Jethmal says.

For Microsoft and CrowdStrike, the path forward involves rebuilding trust through transparency, improved quality assurance processes, and demonstrating reliability.

Joel Lah, fintech lead and co-founder at TriOn & Co, says Microsoft and CrowdStrike must have honest and tailored conversations with all impacted customers across industries. 

He explains that the impact on each customer will vary based on their industry, and these affected customers faced their own communications challenges as their end customers were impacted. 

“Over 27,000 flights were affected, for instance. The best way to manage further fallout and reputational and loyalty damage is for the airlines to have public support from Microsoft and CrowdStrike in their communications to demonstrate a unified and aligned front,” says Lah.

“On their end, Microsoft and CrowdStrike have to offer tailored solutions and support to these affected customers. A blanket solution will not help brand loyalty and confidence. While it may be time-intensive to provide tailored solutions to each customer, maintaining brand loyalty and trust is an ongoing feat that takes time and genuine action.”

For the affected brands, especially in high-stakes industries like airlines and healthcare, the focus should be on enhancing resilience, better vendor management, and maintaining robust contingency plans to safeguard against future disruptions.

“If I were a consumer directly impacted by this outage through an airline, banking or any other glitch, I would hold that particular company responsible for making questionable choices regarding a cybersecurity partner,” says Asiya Bakht, founder of Beets Public Relations.

“We are also likely to see future consumers demand greater accountability and transparency even when it comes to companies outsourcing their services.”