NEW YORK (AP) — The owner of a consumer insights research firm couldn’t pay his employees, missed a Friday deadline to sign contracts for new business and couldn’t send important research findings to key clients. A psychiatrist who runs a virtual mental health clinic in Maryland saw business grind to a halt when some of his virtual assistants and therapists couldn’t make calls or log on to their computers. And a New York City restaurant owner worried about how to pay his vendors and employees.
Companies from airlines to hospitals were grappling with a glitch in a software update that caused technical disruptions around the world on Friday and whose effects continued into the weekend. The widespread outage highlighted the fragility of a digitalized world that relies on a small number of providers for key computing services.
But the issue seems to divide those affected into the “haves” and “have-nots.” While major Microsoft and CrowdStrike customers have received IT support to resolve the issues, many small and medium-sized businesses with Windows PCs that may have received the problematic update are still struggling.
Take Zvetta Kalyenska, owner and founder of RILA Global Consulting, a Manhattan-based consumer insights firm with Fortune 500 clients. She had resolved her payroll issues and had her research projects extended until Monday by Saturday. But the potential client didn’t move forward with new contracts, and she estimates her annual income will drop by nearly 25%. The problem was, she couldn’t sign contracts because Docusign, which runs on Microsoft software affected by the flawed update, was down.
“If I worked for a large company, I could delegate tasks or get support from computer science or security services,” Kalińska says, “but as a small business owner, I have to rely on myself, which is pretty dire.”
In addition to business issues, Kalyenska had to take her sick daughter to a local hospital on Friday because the hospital’s phone lines were down.
Kalyenska, an immigrant from Bulgaria who received U.S. citizenship in 2023, said she learned a hard lesson: “Our lives are based on technology, and we depend on technology, so we are very vulnerable.”
CrowdStrike is one of the largest cybersecurity companies in the United States, with a client list that includes more than half of the Fortune 500 companies, as well as small and medium-sized businesses.
The company has issued an initial fix through a software update since the outage occurred, but many computers are expected to require hands-on work that could take days, or possibly longer, to complete.
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Dan Ives, a technology analyst at Wedbush, said for many affected small businesses, it could mean working around the clock this weekend to make sure their systems are up and running.
“Small businesses rely on third parties to make sure this doesn’t happen, and it’s become a ‘code red’ situation,” Ives said.
Ives noted that overall, it is easier for larger companies that employ a significant number of experts to solve technical problems than for smaller companies that may face an “uphill battle” due to fewer technical resources.
“The effects of this will likely be felt for days and weeks to come,” Ives said. “This is a black mark not just on CrowdStrike, but on the entire industry. We cannot allow a global ecosystem to collapse over one update.”
Pedestrians walk past a screen that goes black due to a global technical outage, in Times Square in New York, Friday, July 19, 2024. (AP Photo/Yuki Iwamura) (AP)
Ari Lightman, a professor of digital media at Carnegie Mellon University’s Heinz College, agreed, noting that the money big companies spend on Microsoft and CrowdStrike is likely a big chunk of their IT budgets. Smaller businesses, meanwhile, can look online for solutions to the outages. CrowdStrike has posted step-by-step manual fixes on its blog, but those who aren’t tech-savvy may find them unsettling.
Reitman said those companies could sue for business losses, while smaller businesses could file a class action lawsuit to seek damages from CrowdStrike.
This issue is affecting small businesses in a variety of ways.
The outages have been “somewhat haphazard and inconsistent depending on how companies are using specific Microsoft tools,” said Heather Garlich, a spokeswoman for FMI, a grocery trade group in Arlington, Virginia. Garlich said she is aware of some companies that had problems with their human resources systems, others with delivery routing systems. Another company had problems with its cash registers.
Chris Seabrook, owner of Asguard Locksmith, a locksmith service in Melbourne, Australia, told The Associated Press in an email on Friday that the IT outage had caused a “major disruption” to his day-to-day operations, meaning he couldn’t send or receive email, access important files, manage his schedule or create invoices.
“My Microsoft PCs are essential to many key functions of my business,” he wrote. “As I run a one-person business, every minute counts and this disruption has forced me to act quickly to ensure as little interruption of service as possible.”
To minimize disruption, Seabrook borrowed a non-Microsoft device from a friend so he could sign in to his account and access important tools and information. He also uses his smartphone for important messaging and scheduling, and to contact customers to update them on the situation. Seabrook did not immediately respond to a follow-up email sent by The Associated Press on Saturday.
Some small business owners are improvising to get the job done.
Dr. Ozan Toy, a psychiatrist and chief medical officer of Maryland-based Telepsychiatry, which has 25 employees across the U.S., said some employees using Microsoft phone lines have switched to the Ring Central system, while others have switched from Microsoft Teams to Zoom.
Toy said the hospital was fortunate to have multiple backups of its electronic medical records system, which allowed staff to resume communication with each other and patients. As of Sunday, the cloud-based service was up and running, he said. Toy noted that financial losses were “minimal” because the hospital has an outside answering service that takes calls from patients.
Chris Delmond, co-owner of Handcrafted Hospitality, which operates three restaurants in Manhattan and one in Mount Pleasant, South Carolina, said his restaurants remained open. But the outage meant he couldn’t access his cloud-based accounting software app on the Microsoft platform, meaning he couldn’t view receipts or invoices and slowed down the processing of checks for employees and vendors. He had to call his bank to check if deposits had been made and to check his balance.
“I’m a small business owner, I have two other partners, we do everything,” he said. “So it’s up to us to figure out what the problem is. There’s no big platform that can help us track it down.”
But by late Friday afternoon, Delmond said all issues related to his company’s cloud-based systems had returned to normal. He noted that he had not suffered any financial loss, but added, “It’s frustrating, but as a small business owner, you have to deal with the ups and downs.”
