Latest / The Front / After CrowdStrike, do we all need cash?

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After CrowdStrike, do we all need cash? · The Front

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  Speaker 1: You can listen to the Front on your smart sneaker
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  Speaker 1: every morning to hear the latest episode. Just say play
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  Speaker 1: the news from The Australian. From the Australian, Here's what's
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  Speaker 1: on the Front. I'm Claire Harvey. It's Monday, July twenty two.
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  Speaker 1: One in three millennials aged eighteen to thirty four have
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  Speaker 1: skipped meals to save money in the past twelve months.
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  Speaker 1: As the cost of living crisis bites in Middle Australia.
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  Speaker 1: More than half of households have cut food spending and
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  Speaker 1: a quarter have dropped doctor's visits. That exclusive survey is
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  Speaker 1: live now at the Australian dot Com dot a You
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  Speaker 1: taxpayers have spent more than four million dollars for CrowdStrike,
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  Speaker 1: the company behind Friday's catastrophic global internet outage, to protect
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  Speaker 1: the Department of Defense, spy agencies and the Future Fund.
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  Speaker 1: In today's episode, the outage exposed how much we rely
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  Speaker 1: on electronic transactions. So is this a moment for cash
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  Speaker 1: to return? In nineteen ninety eight, in New Zealand's biggest city, Auckland,
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  Speaker 1: the power went out and it stayed out, not for
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  Speaker 1: a few hours or a couple of days, for five weeks.
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  Speaker 1: Here's how Radio New Zealand and TV three captured the drama.
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  Speaker 2: This is Morning Report with Jeff Robinson and Shawn Plunkett
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  Speaker 2: in Auckland on Monday, February twenty third, the day Auckland
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  Speaker 2: City stood still. The hot and dry weather in Auckland
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  Speaker 2: over January and February appears to have been the trigger
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  Speaker 2: for the cables to fail one after the other.
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  Speaker 3: Emergency services tackling a freak electricity crisis that has paralyzed
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  Speaker 3: the center of Auckland said today that health and safety
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  Speaker 3: issues were now paramount.
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  Speaker 1: Restaurants, schools, TV stations, every shop, every street light. The
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  Speaker 1: main drag Queen Street roared with the sound of diesel generators.
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  Speaker 1: New Zealanders still keep their kitchen drawers full of candles
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  Speaker 1: and matches. The Auckland power outage was one of those
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  Speaker 1: moments when you realize the layer of modernity that protects
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  Speaker 1: us is pretty thin.
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  Speaker 4: It's just unbelievable.
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  Speaker 1: Jared Lynch is, The Australian's Technology editor. On Friday afternoon,
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  Speaker 1: that glimpse of life without modernity happened to the whole world.
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  Speaker 2: The catastrophic failure caused chaos of banks, businesses and airports
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  Speaker 2: across the globe.
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  Speaker 3: A massive worldwide computer outage cripples US hospitals, banks, and airlines.
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  Speaker 4: A simple security update triggered a worldwide tsunami of technological breakdown.
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  Speaker 1: The problem with technology, if it's good, is that it's
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  Speaker 1: adopted in such a widespread way that we become completely dependent.
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  Speaker 2: It was getting towards late on a Friday afternoon, so
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  Speaker 2: you were looking forward to being able to knock off work,
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  Speaker 2: and then I couldn't access our work system to file
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  Speaker 2: a story, and.
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  Speaker 4: I thought it was my computer because I was working
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  Speaker 4: from home.
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  Speaker 1: In the next few moments, Jared texted his colleagues at
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  Speaker 1: The Australian to see if anyone else had the same problem,
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  Speaker 1: and they did, and then one said something that really
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  Speaker 1: got Jared's attention. A colleague said he just tried to
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  Speaker 1: return an item to a Bunning's hardware store and they
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  Speaker 1: said their systems were down.
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  Speaker 4: I thought, well, is that a coincidence or it's a
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  Speaker 4: bit odd. I rang up Bunnings.
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  Speaker 2: I said what's going on and they said, oh, it's
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  Speaker 2: one of our supply It's called CrowdStrike. I said, ah, okay,
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  Speaker 2: So then I went on down detector and just saw
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  Speaker 2: dozens of Australian companies. I had this massive spike in
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  Speaker 2: out each activity and thought, we have a problem here.
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  Speaker 1: So what were the next steps for you as a reporter?
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  Speaker 2: It was just to do good old fashioned shoe lever
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  Speaker 2: reporting and that was just to ring up all these
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  Speaker 2: companies that were on down detector saying what's going on?
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  Speaker 2: And oddly some of the companies said, what are you
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  Speaker 2: talking about. More troubling though, is when I actually ran CrowdStrike,
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  Speaker 2: because I were my first porter call. I rang their
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  Speaker 2: agency here in Australia to say, look, there's this problem.
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  Speaker 4: What's going on? They said, what problem?
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  Speaker 2: And I said, there's dozens of Australian companies that are
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  Speaker 2: reporting outages.
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  Speaker 4: You haven't heard about this?
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  Speaker 1: No?
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  Speaker 2: And they said have you spoken to these companies? I said, yeah,
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  Speaker 2: I've spoken to a few of them. Don't you know
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  Speaker 2: what's going on?
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  Speaker 4: No? No, no, no, no.
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  Speaker 2: And it was another five hours until I got a
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  Speaker 2: response from CrowdStrike. Now that's just not acceptable and it
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  Speaker 2: just exposes a gaping flow in our sovereign it capability.
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  Speaker 4: I mean, I grew up in the country Clare.
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  Speaker 2: There was the old saying right, you buy a car
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  Speaker 2: from the local car dealer because if something goes wrong,
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  Speaker 2: you can take it to the car dealer and they'll
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  Speaker 2: fix it. In this case, there are reports that Sydney's
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  Speaker 2: CrowdStrike office was deserted on Friday afternoon. All these companies
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  Speaker 2: couldn't pick up the phone to someone to say what's
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  Speaker 2: going on, and in this day and age, that's just
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  Speaker 2: not acceptable.
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  Speaker 1: The CrowdStrike incident lasted less than twenty four hours in
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  Speaker 1: its most intense phase, but there are computers and laptops
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  Speaker 1: all around the world that will have to be manually
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  Speaker 1: rebooted by IT staff, a process likely to take days
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  Speaker 1: or weeks. Most big companies in Australia, from Quantas to
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  Speaker 1: Woolies and Coal's and our own company, News Corp Australia
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  Speaker 1: engages CrowdStrike to provide a product called Falcon, which sits
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  Speaker 1: on the laptops and desktop computers. Falcon's job is to
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  Speaker 1: protect the user's system from attack. That means CrowdStrike has
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  Speaker 1: to interact with whatever system of software is on the
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  Speaker 1: laptop or desktop, like Microsoft Windows or Apple's iOS. Here's
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  Speaker 1: Crowdstrike's chief executive George Kurtz. Later on Friday explaining what
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  Speaker 1: went wrong.
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  Speaker 3: We're deeply sorry for the impact that we've caused customers,
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  Speaker 3: to travelers, to anyone affected by this, including our companies.
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  Speaker 3: So we know what the issue is. We're resolving and
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  Speaker 3: have resolved the issue now. The system was sent an
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  Speaker 3: update and that update had a software bug in it
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  Speaker 3: and caused an issue with the Microsoft operating system. That
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  Speaker 3: was the extent of an issue. The issue in terms
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  Speaker 3: of a bug.
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  Speaker 4: That was related to our update.
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  Speaker 1: Friday's outage only affected devices running Microsoft Windows. And that's
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  Speaker 1: interesting because CrowdStrike has had serious beef with Microsoft going
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  Speaker 1: back months after the break. So how crowdstrikes aggressive attacks
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  Speaker 1: on Microsoft have come back to bite it? Plus, is
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  Speaker 1: this a moment for cash to come back? The best
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  Speaker 1: coverage of tech is in the Australian twenty four to seven.
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  Speaker 1: You can join our subscribers at the Australian dot com
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  Speaker 1: dot au and we'll be back after this break. One
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  Speaker 1: of the reasons Crowdstrike's outage is interesting is that crowdstrikes
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  Speaker 1: style until now has been elbows out criticizing other organizations
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  Speaker 1: and particularly Microsoft, for their approach to safety.
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  Speaker 4: It's quite funny there's been this argibargie.
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  Speaker 2: That's been happening between CrowdStrike and Microsoft for quite some time.
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  Speaker 2: Crowdstrike's chief executive, George Kurtz, has been very quick to
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  Speaker 2: throw at Microsoft, particularly around cybersecurity, and last year on
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  Speaker 2: an earning's call, he said they've been operating the same
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  Speaker 2: filed model that McAfee and simtech have been using for
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  Speaker 2: the past twenty five years now. If you think the
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  Speaker 2: main thing that keeps executives up at night is a
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  Speaker 2: cyber breach, a mass disruption like this, if you hear
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  Speaker 2: those sort of comments, you think, oh, well, these people
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  Speaker 2: kind of know what they're talking about. And indeed their
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  Speaker 2: growth has actually been phenomenal. Their share prices more than doubled,
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  Speaker 2: their annual revenue has been growing at a rate of
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  Speaker 2: sixty four percent. They've had this stunning reputation until now.
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  Speaker 2: So companies have been using CrowdStrike as a way to
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  Speaker 2: fend off cyber attacks denial of service, which is similar
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  Speaker 2: to what we saw on Friday, where people's laptops are
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  Speaker 2: rendered useless. They couldn't access their systems. Even though this
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  Speaker 2: wasn't a cyber attack, it had that effect. But the
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  Speaker 2: last thing they thought is the company that should be
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  Speaker 2: defending this. This sort of activity and disruption would achieve
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  Speaker 2: just that virus software upgrade.
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  Speaker 1: So it must be pretty embarrassing for CrowdStrike that it's
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  Speaker 1: actually an update that they tried to execute that has failed.
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  Speaker 1: Or do you think this goes back to the same issue.
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  Speaker 1: They will continue to blame Microsoft for having inadequate systems
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  Speaker 1: because this upgrade didn't affect iOS for example, did it No, I.
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  Speaker 2: Don't think they can blame Microsoft for this. It was
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  Speaker 2: their software upgrade, and the software upgrade basically affected the
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  Speaker 2: brain of Windows, which caused all these Windows based PCs,
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  Speaker 2: laptops and other devices to render what is known the
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  Speaker 2: blue screen of Death, and people just couldn't access them.
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  Speaker 2: They couldn't do their work, and across the globe there's
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  Speaker 2: reports that companies have lost billions of dollars as a
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  Speaker 2: result of this.
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  Speaker 1: Many of those companies will now seek compensation. Organizations that
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  Speaker 1: are planned for an outage, like Triple O. Dispatching services
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  Speaker 1: which quickly shifted to pen and paper were okay, but
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  Speaker 1: in today's cash free world, many companies had no backup
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  Speaker 1: plan at all.
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  Speaker 4: Technology is fantastic.
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  Speaker 2: It does make our lives easier and You can go
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  Speaker 2: out for a run with only an Apple Watch and
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  Speaker 2: be able to go buy yourself a coffee with a tap.
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  Speaker 2: You don't have to be carrying your phone or a
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  Speaker 2: wallet with your coins.
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  Speaker 4: Jingling a round.
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  Speaker 2: Has become that easy for us to transact in this
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  Speaker 2: modern age, and technology has become as essential to our
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  Speaker 2: economy as running water. The problem is is when it sneezes,
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  Speaker 2: we all catch a cold, and it's a reminder that well, actually,
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  Speaker 2: maybe we should have a few hundred dollars stashed away
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  Speaker 2: somewhere in the house or in our wallet. Cash is king,
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  Speaker 2: and there's a reason why it is so.
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  Speaker 1: Finally, Jared, what do you think happens to CrowdStrike now?
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  Speaker 1: Is this a fatal blow for this company or are
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  Speaker 1: they too deeply embedded in systems to suffer too much?
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  Speaker 4: Well, the question is who else do you turn to?
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  Speaker 2: No doubt, this has been a major blow to their reputation,
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  Speaker 2: but they are a gorilla in this space. They've had
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  Speaker 2: this problem, they don't want to have it happen again
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  Speaker 2: because they've been talking a massive game and they've probably
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  Speaker 2: got the best engineers in this space. So as frustrating
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  Speaker 2: as it was, it could even be more frustrating to
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  Speaker 2: be able to change, given how embedded they are.
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  Speaker 1: Jared Lynch is The Australian's Technology editor. There's a major
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  Speaker 1: change in the way Australians give birth. Just twenty percent
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  Speaker 1: of babies will be born in private hospitals this year
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  Speaker 1: amid a maternity care crisis. Find out more by joining
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  Speaker 1: ours subscribers at the Australian dot com dot au