On Friday afternoon, July 19, 2024, something happened that many small business owners in Australia will never forget. A routine software update from CrowdStrike, a top cyber security company, went horribly wrong. It clashed with Microsoft software, causing computers to crash globally, resulting in the dreaded Microsoft “Blue Screen of Death” (BSOD). Suddenly, everything from supermarket checkouts to health services came to a grinding halt. For small business owners, the impact was immediate and severe.
What Went Wrong?
The BSOD is a well-known but rare disaster in the tech world. It can be caused by anything from hardware problems to malware. This time, the issue stemmed from a faulty software update. The fallout was massive, affecting countless small businesses. Supermarkets couldn’t process sales, airports faced chaos, and even banks and government services were disrupted. The economic damage is still being tallied, but the chaos for small business owners was evident immediately.
The Hidden Risks of Relying on Big Tech
This incident is a wake-up call about the risks of relying too heavily on large tech companies. When one update can bring everything to a standstill, it raises serious questions about our digital dependence. Imagine if this update had affected even more critical infrastructure, like our water or energy grids. The results could have been catastrophic, impacting not just businesses but the safety and security of our entire country.
Small businesses are particularly vulnerable. As highlighted in an article by Julia Talevski, 70% of cyber-attacks target small-to-medium-sized businesses (SMBs), and 63% face ransomware and advanced threats. The SMB market is vital to Australia’s economy, contributing half a billion dollars in gross domestic product and consisting of about 2.5 million businesses. Yet, many small business owners lack the resources to defend against these threats effectively.
Government and Corporate Responses: Help or Hurdle?
In response to the growing cyber threats, the National Australia Bank (NAB) recently partnered with CrowdStrike to offer a year of free cybersecurity software to small businesses. This includes access to AI-powered protection from CrowdStrike Falcon Go. While this sounds promising, it also ties businesses even more tightly to the very systems that can fail so dramatically, as we saw with the recent outage.
The Queensland Government’s push towards a cashless society also comes with risks. Natural disasters and technical failures can leave businesses and consumers without access to money. The 2019-20 Black Summer fires showed how essential cash can be when digital systems fail. Small businesses, especially in rural areas, rely on cash transactions, and any disruption can be devastating.
The Need for More Varied Suppliers
This incident also highlights the need for more varied suppliers in the market. Relying on a few big tech companies makes the entire system more vulnerable. By diversifying our suppliers, we can reduce the risk of a single point of failure causing widespread disruption. Small businesses should advocate for policies that encourage competition and innovation among tech providers, ensuring that they have multiple options for their cybersecurity and other digital needs.
What Now?
As a small business owner, you might be wondering what can be done to protect your livelihood. The Prime Minister’s recent holiday announcement amid this crisis might feel like a slap in the face, but rest assured, the government is monitoring the situation. CrowdStrike claims to have deployed a fix, but the full impact will unfold over days and possibly weeks.
It’s crucial to stay informed and prepared. Evaluate your dependency on digital systems and consider diversifying your cybersecurity measures. This incident underscores the importance of having backup plans and the need for government support tailored to the unique challenges faced by small businesses.
Moving Forward Together
The CrowdStrike software failure has shown us how vulnerable our digital world can be. For small business owners, it’s a stark reminder of the need for robust, reliable systems and support. As we recover from this incident, let’s push for better protections, more resilient infrastructure, and a diverse range of suppliers to safeguard our businesses and livelihoods. Stay strong, stay informed, and let’s work together to ensure that small businesses can weather these digital storms and continue to thrive.
Written by Linda Shave, Policy Advisor, Small Business Association of Australia
