Millions Lost: Software Problems Plague Fortune 500 Companies
Parametrix Estimates $5.4 Billion in Losses for US Fortune 500 Companies Due to Global Software Outage
Parametrix, a US-based cloud monitoring, modeling, and insurance services provider, has released a statement revealing the significant financial impact of the recent global software outage caused by Crowdstrike on US Fortune 500 companies, excluding Microsoft.
The outage, which occurred last week, stemmed from a disruption caused by Crowdstrike, a cybersecurity services provider based in Austin, Texas, that serves Microsoft among other clients. As a result, many businesses, particularly airlines, felt the repercussions worldwide.
According to Parametrix’s analysis, 125 Fortune 500 companies were affected by the software issue. The impact spread across various sectors, with all airlines, 43 percent of retail companies, and nearly three-quarters of healthcare and banking firms incurring direct costs.
The total direct financial loss faced by these Fortune 500 companies, excluding Microsoft, is estimated at $5.4 billion. However, only a fraction of this amount, ranging from 10 to 20 percent, is expected to be covered by cyber insurance policies due to companies’ high risk retention rates and low policy limits relative to potential disruption losses.
On average, each affected Fortune 500 company is facing a loss of $44 million, with manufacturing and airline companies experiencing losses ranging from $6 million to $143 million individually. In the healthcare sector, companies are expected to bear the brunt of the financial impact, with estimated losses amounting to $1.94 billion.
Of the Fortune 500 companies affected, airlines are projected to lose $860 million, followed by the banking sector at $1.15 billion. The combined annual revenue of companies impacted by the global software issue in various sectors such as health, banking, transportation-airline, software and internet technologies, retail, finance, and manufacturing totals $2.24 trillion.
As the fallout from the software outage continues to unfold, companies are assessing the extent of the financial repercussions and working towards mitigating future risks to prevent similar incidents from occurring in the future.
