Comment by manquer
3 days ago
There are consequences, with significant financial impact, not necessarily world ending for them.
There are already lawsuits filed around this incident. If a court sides with the customers or if CrowdStrike settles them, it will not be cheap.
Even if they don't end up loosing or settling, the lawyers will not be cheap with so many suits , I don't think there is a major class action, every contract is unique after all, customers can easily afford their own lawyers and don't need to share.
Beyond that, in next renewal cycle, customers are likely to demand much stronger penalty clauses in the contract, they won't let the mistake of not putting strong financial penalties slide while they may not change the vendor. This will make insurance for CrowdStrike much more expensive, another mistake would be far more financially expensive even if this one doesn't turn out to be.
The insurer will also want a stronger internal process controls and paperwork which also won't be cheap.
Consequences in B2B are never immediate but over time they do happen, larger an org longer it takes, but eventually it does catches up, look at Intel or Boeing today.
There will absolutely be consequences. And that'll cost real money.
But that is just a 'cost of doing business'. And ultimately will just work it's way into the price.
Intel and Boeing are not "one off mistakes". The root problems there are structural, cultural and fundamental.
If CrowdStrike have more issues this year, then that'll have an impact because it suggests there's a root problem. But a single bad rollout is just a bad rollout.
CrowdStrike problems are also structural the incident timeline hardly seemed like a fat finger mistake, but series of fundamental poor practices a org in their position should not have. We only get to see the one newsworthy incident like the door blowing off the airplane.
The "cost of business" will catchup to them is the point, Unlike Intel or Boeing it is not duopoly business with little to no options for CrowdStrike's product. It is notoriously brutal for large organizations in tech to stay competitive over 20-30 years time horizon.
Most likely trajectory for a company in their position, their growth slows - this incident being a key contributor to that slow down, then stock starts to fall, it will eventually become attractive for a company to acquire them, perhaps rebrand the product and keep the customers and cash flows.
Lawsuits will take years by which time the company will either be gone or swimming in cash.
Lawyers have to paid now till then.
Companies settle much faster typically to reduce some of this costs, it ends up being cheaper.
Also many of these will be resolved through their arbitration clauses that would be present in the contracts. Arbitration is much faster and usually appeal proof
Delta sued for what, $500M? These would have to be some expensive lawyers, even for lawyers.
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