WEBVTT - Global IT Chaos Blocks 911 Calls, Grounds Planes 0:00:00.600 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait Inside, from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.319 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.840 tech news. The Bloomberg Business Week podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.080 --> 0:00:28.639 It's safe to say we are living in a world 0:00:28.640 --> 0:00:31.520 fullest of prelatives. Pick your topic right. It feels like 0:00:32.360 --> 0:00:34.680 our Bloomberg team noting and what will go down is 0:00:34.680 --> 0:00:37.240 the most spectacular it failure that the world has ever seen. 0:00:37.320 --> 0:00:41.760 A Box software update from cybersecurity firm CrowdStrike holdings crashing 0:00:41.840 --> 0:00:46.040 countless Microsoft Windows computer systems globally. It's important to note, right, David, 0:00:46.040 --> 0:00:47.360 this wasn't a cyber hack, not a. 0:00:47.280 --> 0:00:49.440 Cyber hack as we understand it, and this is just 0:00:49.479 --> 0:00:51.600 part of a routine fix. But this is clearly something 0:00:51.600 --> 0:00:54.320 that was so pervasive in so many computer systems around 0:00:54.360 --> 0:00:57.960 the world they had a major effects. Microsoft and CrowdStrike 0:00:58.000 --> 0:01:00.720 rolling out fixes. Systems are being restored for several hours. 0:01:00.720 --> 0:01:04.280 Bankers in Hong Kong, doctors in the UK, emergency responders 0:01:04.280 --> 0:01:07.000 in New Hampshire, all over the place finding themselves locked 0:01:07.000 --> 0:01:09.760 out of programs that are critical to keeping their operations afloat. 0:01:09.800 --> 0:01:13.840 Here is CrowdStrike co CEO George Kurtz. Earlier today on NBC. 0:01:13.680 --> 0:01:18.600 News, the system was sent an update and that update 0:01:18.640 --> 0:01:22.319 had a software bug in it and caused an issue 0:01:22.319 --> 0:01:26.200 with a Microsoft operating system. And we identified this very 0:01:26.280 --> 0:01:30.279 quickly and remediated the issue. And as systems come back online, 0:01:30.319 --> 0:01:33.400 as they're rebooted, they're coming up and they're working. And 0:01:33.440 --> 0:01:36.640 now we are working with each and every customer to 0:01:36.680 --> 0:01:38.760 make sure that we can bring them back online for 0:01:38.840 --> 0:01:39.840 more and what happened. 0:01:39.520 --> 0:01:41.800 And what's happening next. We're joined now by Bloomberg Intelligence 0:01:41.840 --> 0:01:44.120 senior tech industry analyst man Deep Sing who's here in 0:01:44.160 --> 0:01:46.840 our studio in New York, along with Bloomberg News cybersecurity 0:01:46.840 --> 0:01:49.920 reporter Jamie Tavey who's in our Washington, DC bureau and Deep. 0:01:50.000 --> 0:01:52.360 Let me start with you, the co CEO. They're saying, 0:01:52.640 --> 0:01:55.720 this process is underway, how long is it going to take? 0:01:55.840 --> 0:01:58.680 And we were marveling at sort of how it affected 0:01:58.720 --> 0:02:01.400 so many parts of the economy, how widespread was thises 0:02:01.400 --> 0:02:02.640 and how bad could it have been? 0:02:03.080 --> 0:02:06.040 Yeah, I mean, look, the good thing, as you noted 0:02:06.120 --> 0:02:08.880 rightly is it's not a cyber attack. The last thing 0:02:08.880 --> 0:02:12.000 a cyber security company wants is a cyber attack on 0:02:12.040 --> 0:02:14.919 their own system, so that's not the case. But clearly 0:02:15.000 --> 0:02:18.800 the impact is wide reaching, simply because the number of 0:02:19.160 --> 0:02:22.520 endpoints the networks. If you take that into account, and 0:02:22.600 --> 0:02:25.560 I know the CEO said we have rolled back the changes, 0:02:26.360 --> 0:02:29.400 it requires a lot of manual steps. Even though they 0:02:29.400 --> 0:02:32.160 have rolled back the code or the content changes they 0:02:32.200 --> 0:02:35.160 made to their software, but that doesn't fix the issue. 0:02:35.200 --> 0:02:37.359 Otherwise the systems would have been all up by now. 0:02:37.480 --> 0:02:40.120 We know they're not. So the reason why this will 0:02:40.240 --> 0:02:43.840 linger on for a bit and god knows if it's 0:02:43.840 --> 0:02:47.120 going to be weeks or months. But clearly there are 0:02:47.200 --> 0:02:50.680 manual fixes to be done. And you have to remember 0:02:50.800 --> 0:02:53.840 not all of the Windows environments are at the same 0:02:53.919 --> 0:02:57.560 operating system. They're running different versions, some of them are 0:02:57.720 --> 0:03:01.400 very old. How do you fix that? Because I think 0:03:01.440 --> 0:03:05.840 the fix or the software update that they did impacted 0:03:06.120 --> 0:03:07.880 the different versions in a different way. 0:03:07.919 --> 0:03:10.600 Interesting, man, how did this happen? Why did this happen? 0:03:10.760 --> 0:03:13.120 I mean, Microsoft knows what they're doing, right you roll 0:03:13.160 --> 0:03:13.720 out something. 0:03:13.840 --> 0:03:15.440 CrowdStrike knows what they're doing. 0:03:15.720 --> 0:03:16.480 How did this happen. 0:03:16.639 --> 0:03:19.519 I mean, it's a big, I think failure in terms 0:03:19.560 --> 0:03:22.880 of the testing procedures that these companies have to carry 0:03:22.919 --> 0:03:25.919 out before rolling out their code changes. And the CEO 0:03:25.960 --> 0:03:28.160 said it wasn't a code change, it was a content 0:03:28.280 --> 0:03:32.720 file change, so basically a configuration change that runs at 0:03:32.760 --> 0:03:36.360 the operating system layer. Otherwise, how do you bring down 0:03:36.880 --> 0:03:40.600 an entire system if it's not at the operating system level. 0:03:40.600 --> 0:03:44.560 And it also puts into questions, you know, the single 0:03:44.640 --> 0:03:47.960 point of failure aspect, because all these companies invest in 0:03:48.040 --> 0:03:52.280 back end systems and replicating you know, backup environments that 0:03:52.320 --> 0:03:55.440 should come online if something like this were to happen, 0:03:55.480 --> 0:03:58.480 but that apparently didn't happen and everything went down at 0:03:58.480 --> 0:03:59.040 the same. 0:03:58.840 --> 0:04:03.080 Time, Jamie the uninitiated, how does this kind of software work? 0:04:03.080 --> 0:04:04.720 We talked about sort of the scale of this, how 0:04:04.720 --> 0:04:06.680 many companies are using it, but what is the kind 0:04:06.680 --> 0:04:10.000 of security software the CrowdStrike has pioneered? And I've been 0:04:10.000 --> 0:04:12.600 thinking a lot just about kind of the psychological ramifications 0:04:12.680 --> 0:04:14.360 of this that people are now going to have fear 0:04:14.400 --> 0:04:16.520 there's going to be this kind of instability in our 0:04:16.520 --> 0:04:17.239 connected world. 0:04:18.279 --> 0:04:20.400 It's a really it's a really interesting question. And I 0:04:20.400 --> 0:04:24.160 think it really does speak to the inter connectedness of 0:04:24.800 --> 0:04:27.000 all of the technology and all the systems that we 0:04:27.080 --> 0:04:31.080 have today. You know, I think that what CrowdStrike does 0:04:31.160 --> 0:04:35.320 is because it provides endpoint security protection, it has to 0:04:35.360 --> 0:04:38.240 have access to your system and that's what that's where 0:04:38.360 --> 0:04:41.760 it's sort of the compromise of the Microsoft system came 0:04:41.800 --> 0:04:45.440 into play. And look, it's it's not a good day 0:04:45.480 --> 0:04:51.320 for the cybersecurity industry. It's something that everyone is they're 0:04:51.360 --> 0:04:53.880 concerned about it because it is a real question about 0:04:53.960 --> 0:04:55.760 well how you know, as men Deep said, you know, 0:04:55.880 --> 0:04:58.599 testing before you put it out there. But while it 0:04:58.680 --> 0:05:02.800 isn't actually a cyber security incident, we do hear and 0:05:02.839 --> 0:05:05.479 we are hearing from people that this is a perfect 0:05:05.480 --> 0:05:07.760 opportunity for a lot of people to take advantage of 0:05:07.760 --> 0:05:10.840 those systems being down, to get in there and try 0:05:10.880 --> 0:05:14.120 to attack it, attack systems in some way. So the 0:05:14.240 --> 0:05:19.200 vulnerability right now is it's there, and there are people 0:05:19.279 --> 0:05:22.360 who would be using as an opportunity to take advantage 0:05:22.360 --> 0:05:22.560 of that. 0:05:22.760 --> 0:05:24.600 It makes me wonder though, as we know talk so 0:05:24.680 --> 0:05:27.480 much about generative AI and increasingly more data out there 0:05:27.520 --> 0:05:29.240 and more data maybe up in the cloud or some 0:05:29.320 --> 0:05:31.760 of it on premise. But I do wonder Mandeep, I mean, 0:05:32.680 --> 0:05:35.680 is this just the beginning of probably similar system failures. 0:05:36.839 --> 0:05:40.560 I think again, it's hard to extrapolate we are going 0:05:40.600 --> 0:05:44.039 to see attacks like this because clearly, if it wasn't 0:05:44.080 --> 0:05:47.719 for an operating system level outage, we wouldn't be talking 0:05:47.760 --> 0:05:51.360 about this, and you know, the magnitude of it wouldn't. 0:05:50.960 --> 0:05:51.640 Be this big. 0:05:51.920 --> 0:05:55.520 The reason why this had a far reaching impact then 0:05:55.560 --> 0:05:59.080 a cyber attack would is because it touches the Windows 0:05:59.080 --> 0:06:04.359 operating systems of you know, Windows, Linux and Apple having 0:06:04.360 --> 0:06:07.160 their own operating there are three operating systems that control 0:06:07.240 --> 0:06:10.559 all your devices right now. You can't roll out a fix. 0:06:10.960 --> 0:06:13.280 If your operating system is down and it needs to 0:06:13.320 --> 0:06:16.599 be rebooted, you can't do anything. There is no patchwork. 0:06:16.640 --> 0:06:19.559 And that's where you know, all the backup systems didn't 0:06:19.600 --> 0:06:22.880 work because there was no way to bring anything online. 0:06:22.920 --> 0:06:25.200 So that I think is a risk that companies need 0:06:25.240 --> 0:06:27.720 to think about. But I would say cyber attacks. We 0:06:27.760 --> 0:06:30.040 have had a lot of cyber attacks, and look, there 0:06:30.040 --> 0:06:32.600 are data breaches, you have to pay fines. In this case, 0:06:32.680 --> 0:06:37.080 what I'm really interested in is who's Libel Is it Microsoft? 0:06:37.240 --> 0:06:41.440 Is it CrowdStrike, who will pay the customers for the indemnification? 0:06:41.680 --> 0:06:45.000 I mean clearly there was asso. Yeah, I think CrowdStrike 0:06:45.080 --> 0:06:47.159 probably has to take a lot of the blame. But 0:06:47.240 --> 0:06:51.680 clearly Microsoft and look, these are the two biggest endpoint 0:06:51.760 --> 0:06:56.320 security companies. CrowdStrike actually competes with Microsoft in that space, 0:06:56.360 --> 0:07:00.000 so even though it was on Microsoft system they can say, oh, 0:06:59.800 --> 0:07:02.960 we will bundle our security solution. And if that was 0:07:03.000 --> 0:07:05.160 the case, you know, we wouldn't be in this situation. 0:07:05.360 --> 0:07:07.520 So David, you ready put you all your medical information 0:07:07.560 --> 0:07:07.839 out there? 0:07:08.040 --> 0:07:09.680 Got to say we saw this play out in medical 0:07:09.680 --> 0:07:12.160 offices in the hospitals as well. But Jamie, we're using 0:07:12.160 --> 0:07:13.960 this term endpoint and I want to ask you a 0:07:13.960 --> 0:07:15.720 bit about that. Men deep talking about sort of how 0:07:15.720 --> 0:07:18.360 companies are processing this and dealing with this. I mean, 0:07:18.440 --> 0:07:20.600 companies have had to allow access to their systems. This 0:07:20.640 --> 0:07:23.920 company to have access to their systems. Does this change 0:07:23.960 --> 0:07:25.440 that calculus at all? I mean I think of the 0:07:25.520 --> 0:07:27.920 days when like I bought on cd RAM the McAfee 0:07:27.920 --> 0:07:29.720 software and put it on my computer and that was 0:07:29.760 --> 0:07:32.240 like us protecting it from threats? Then what lo those 0:07:32.280 --> 0:07:34.880 many decades ago? But talk about just the level of 0:07:34.960 --> 0:07:38.080 comfort that companies have using or outsourcing security in this fashion, 0:07:38.160 --> 0:07:40.280 what this might do to that. 0:07:40.280 --> 0:07:42.240 That's a really good point, and I think that a 0:07:42.240 --> 0:07:45.600 lot of the conversation now is about third party vendors 0:07:45.600 --> 0:07:49.400 and third party entities that you invite into your systems 0:07:49.440 --> 0:07:53.400 to protect them. And look, every time something like this happens, 0:07:53.720 --> 0:07:56.560 there is a moment of awareness, there's a moment of oh, 0:07:56.640 --> 0:07:58.760 let's put in all these protections, let's put in all 0:07:58.760 --> 0:08:01.360 these guardrails, let's try to figure out how we can 0:08:01.400 --> 0:08:04.040 mitigate this, and then we go back down again. And 0:08:04.080 --> 0:08:09.440 you know, it's ironic that you sort of mentioned like refixes, right, 0:08:09.680 --> 0:08:12.760 because the last time this happened was with the McAfee bug, 0:08:12.840 --> 0:08:14.880 you know, in twenty ten, and we did have this 0:08:14.960 --> 0:08:20.160 kind of level of outage across systems universally. So it 0:08:20.240 --> 0:08:23.600 kind of ebbs and flows, and where at the point 0:08:23.600 --> 0:08:26.240 where we're seeing the government still exhibit a lot of 0:08:26.240 --> 0:08:30.640 frustration with people trying to impose minimum cybersecurity standards on 0:08:30.680 --> 0:08:34.600 a lot of their systems. This doesn't help at all 0:08:35.000 --> 0:08:37.640 in terms of giving people faith in the security systems 0:08:37.640 --> 0:08:40.880 that they're meant to be installing. But at the end 0:08:40.920 --> 0:08:43.840 of the day. Look, this is going to make everyone 0:08:44.080 --> 0:08:47.000 hyper aware about what they're putting in and what they're 0:08:47.040 --> 0:08:49.480 sending in as updates, and I would like to think 0:08:49.559 --> 0:08:52.480 that this would actually give people a little more concern 0:08:52.520 --> 0:08:55.800 about Okay, before we launched this, are we sure? Are 0:08:55.800 --> 0:09:00.320 we double sure? Are we triple sure? Just because just 0:09:00.400 --> 0:09:04.320 the sheer impact that we've seen, not just on crowdstrikes 0:09:04.320 --> 0:09:07.640 bottom line, but just as Mende said, across the planet. 0:09:07.400 --> 0:09:09.120 Reminds me of my dad, who was an engineer and 0:09:09.160 --> 0:09:12.120 so like he had flashlights and back up flashlights and 0:09:12.160 --> 0:09:15.280 backup redundancy was a big part of our family growing up. 0:09:15.360 --> 0:09:18.720 That's a lot. 0:09:19.000 --> 0:09:22.560 Jordan Robertson, you're with us cybersecurity reporter at Bloomberg News, 0:09:22.960 --> 0:09:25.559 joining us from London. Our teams in Asia London have 0:09:25.640 --> 0:09:29.200 been following this story as it impacted the globe. Jordan, 0:09:29.280 --> 0:09:32.040 where are we right now? What's the update? What can 0:09:32.080 --> 0:09:34.280 you add to this story at this you know, what 0:09:34.400 --> 0:09:36.960 is it? Two to eleven pm Wall Street time on 0:09:37.040 --> 0:09:37.640 this Friday. 0:09:38.640 --> 0:09:40.240 Yeah, it's been a wild day, you know, I mean 0:09:40.240 --> 0:09:43.600 the day starts with, you know, massive outages related to 0:09:43.640 --> 0:09:46.600 both Microsoft and CrowdStrike, and we've had to figure out 0:09:46.679 --> 0:09:49.719 kind of which ones are responsible for which, And as 0:09:49.720 --> 0:09:51.959 you said, what has turned out to be the case 0:09:52.320 --> 0:09:55.679 is that CrowdStrike kind of alone is responsible for this 0:09:55.800 --> 0:09:58.599 massive outage. And you know, what we've learned today is 0:09:58.600 --> 0:10:01.680 that CrowdStrike has apologized for the They've released kind of 0:10:01.720 --> 0:10:05.119 instructions for how to fix this problem, but those instructions 0:10:05.160 --> 0:10:08.079 call for manual fixes. You know, people are going to 0:10:08.160 --> 0:10:11.160 have to go machine by machine to fix this problem, 0:10:11.600 --> 0:10:14.360 and it just highlights kind of the fragility and the 0:10:14.440 --> 0:10:18.320 vulnerability of the modern IT system which is built on 0:10:18.640 --> 0:10:21.160 you know, really just a few companies that you kind 0:10:21.160 --> 0:10:23.000 of have to trust and hope are doing the right 0:10:23.040 --> 0:10:26.120 things when it comes to deploying these patches responsibly. 0:10:26.360 --> 0:10:28.760 Jordan County among those who thought that the blue screen 0:10:28.760 --> 0:10:31.320 of death was something from years past that we weren't 0:10:31.320 --> 0:10:32.680 going to face that once again. But you know, you 0:10:32.720 --> 0:10:35.120 talk about the steps that one has to take now 0:10:35.120 --> 0:10:40.000 to reboot manually to make this happen. Just play that 0:10:40.040 --> 0:10:41.360 out a little bit for me now. And men Deep 0:10:41.400 --> 0:10:42.839 was talking about this a few minutes ago, just sort 0:10:42.840 --> 0:10:45.040 of what this process looks like and how long it's 0:10:45.080 --> 0:10:48.000 going to take. I'm sure that every chief technology officer 0:10:48.240 --> 0:10:51.160 is sending out that strongly worded memo telling the staff 0:10:51.160 --> 0:10:54.480 to do this immediately as quickly as possible. But what's 0:10:54.559 --> 0:10:56.160 your sense of how long this is going to take? 0:10:56.200 --> 0:10:58.120 And indeed, you know how hard it's going to be 0:10:58.240 --> 0:11:00.680 to get every employee a company to do this. I mean, 0:11:00.679 --> 0:11:02.839 there are a lot of Windows machines I imagine at 0:11:02.840 --> 0:11:04.280 most major companies around the world. 0:11:05.120 --> 0:11:07.640 Yes, someone remarked online today that you know, this is 0:11:07.880 --> 0:11:10.680 this is the best malware of the year, you know, 0:11:10.720 --> 0:11:13.240 and it was delivered by by CrowdStrike. You know, it 0:11:13.280 --> 0:11:15.760 has essentially the same effect as ransomware does you know 0:11:15.760 --> 0:11:17.920 a lot of times when we when we write about 0:11:17.960 --> 0:11:20.960 ransomware cases, we'll talk about, you know, the recovery time 0:11:21.000 --> 0:11:23.760 will typically take several weeks to a month, and maybe 0:11:23.760 --> 0:11:26.720 two months or longer. We're looking essentially at that for 0:11:26.800 --> 0:11:28.880 this incident, you know, according to folks that we've been 0:11:28.880 --> 0:11:30.840 talking to. And the reason for that is simple. We 0:11:30.880 --> 0:11:33.440 work in kind of a remote work era. Now, not 0:11:33.559 --> 0:11:36.040 everybody is in an office where they have their computers, 0:11:36.320 --> 0:11:41.000 and unfortunately, for these affected organizations, in order to implement 0:11:41.040 --> 0:11:43.960 this fix, you have to have a technician physically touch 0:11:44.040 --> 0:11:48.240 the computer and with administrative privileges delete this one file, 0:11:48.360 --> 0:11:51.040 tiny little file, one file only, but they have to 0:11:51.080 --> 0:11:53.800 have a physical hands on the machine to delete that file. 0:11:54.040 --> 0:11:56.720 You can't do that remotely. So we've talked to organizations 0:11:56.720 --> 0:12:00.160 that are having their remote employees, you know, FedEx their 0:12:00.200 --> 0:12:03.200 laptops in if it got broken, or servers and things 0:12:03.200 --> 0:12:05.840 like that. So that's why it's going to take so long. 0:12:05.920 --> 0:12:08.440 And you know this this update isn't It's simple. Once 0:12:08.480 --> 0:12:10.400 you get your hands on a machine, it might take 0:12:10.440 --> 0:12:12.800 fifteen twenty minutes only to do that. But if you've 0:12:12.840 --> 0:12:14.679 got thousands of machines and you've got to do this 0:12:14.720 --> 0:12:17.840 for you're going to prioritize your critical systems first, of course. 0:12:18.480 --> 0:12:20.840 But to get through thousands of machines, that's what's going 0:12:20.880 --> 0:12:22.280 to take weeks or potentially longer. 0:12:22.360 --> 0:12:25.160 It's not just control all delete I guess. Okay, So, Mandy, 0:12:25.480 --> 0:12:28.600 So what's changed now in our world because of this? 0:12:29.160 --> 0:12:32.440 Well, so from a stock perspective, I would say, you know, 0:12:32.559 --> 0:12:35.600 CrowdStrike was a darling when it comes to the software 0:12:35.640 --> 0:12:40.040 company's twenty times zv DO sales premium valuation. They couldn't 0:12:40.040 --> 0:12:43.480 do anything wrong, you know, top line growth steady. I 0:12:43.520 --> 0:12:46.160 mean the fact that it happened to them. I think 0:12:46.200 --> 0:12:49.480 they will be definitely a big brand hit that they 0:12:49.520 --> 0:12:53.640 will take from this. And look, people typically. 0:12:53.160 --> 0:12:54.839 Move no excusing them, but was it a case of 0:12:54.880 --> 0:12:56.040 them growing too fast or no? 0:12:56.320 --> 0:12:58.960 Or no, no, they were doing everything right in terms 0:12:59.000 --> 0:13:01.720 of execution, but just goes to show there is always 0:13:01.840 --> 0:13:05.200 idiosyncratic risk when it comes to these companies, and no 0:13:05.280 --> 0:13:07.920 matter how good you are, there are little things that 0:13:08.000 --> 0:13:10.920 can take you down. And in this case, everyone is saying, 0:13:10.960 --> 0:13:14.120 you know, people will move past this outage and they'll 0:13:14.160 --> 0:13:17.480 forget it. I think the brand has taken a big hit. 0:13:17.559 --> 0:13:20.960 And I mean if it the longer it takes come 0:13:21.200 --> 0:13:23.559 to restore the systems and come out of it, I 0:13:23.800 --> 0:13:26.080 think the bigger the damage will be. And don't forget 0:13:26.120 --> 0:13:29.240 the lawsuits. I think it's critical here to think about 0:13:29.480 --> 0:13:30.920 what kind of payouts they. 0:13:30.760 --> 0:13:32.720 May have and don't forget the lawsuits. It's the mantra 0:13:33.160 --> 0:13:36.400 Jamie for everything, Jamie altern to user, what are you 0:13:36.440 --> 0:13:38.440 watching for here in the days and weeks to come 0:13:38.559 --> 0:13:41.840 as we sort of see this process play out. 0:13:41.360 --> 0:13:43.719 We're looking for impact. We're looking to see how long 0:13:43.760 --> 0:13:47.160 it takes people to get back online and also obviously 0:13:47.200 --> 0:13:50.680 anyone trying to take advantage of this opportunities. As Jordan said, 0:13:50.720 --> 0:13:52.560 you know, it's like the malware of the year, and 0:13:53.280 --> 0:13:56.200 it's going to be something to watch. You know, there 0:13:56.200 --> 0:14:00.160 are massive reports about all kinds of compromises around the 0:14:00.200 --> 0:14:02.839 world and delays and clearly you know, how long is 0:14:02.880 --> 0:14:06.439 it going to take to get everything back online and 0:14:06.640 --> 0:14:09.640 just watching to see, you know, the reaction in terms 0:14:09.640 --> 0:14:13.480 of the sort of the scrutiny about having these critical 0:14:13.520 --> 0:14:17.119 supply chains dependent on these tiny little pieces of software 0:14:17.320 --> 0:14:19.360 and just you know what kind of comes from that 0:14:19.400 --> 0:14:20.520 and the risk involved in that. 0:14:20.800 --> 0:14:24.480 Yeah, good point, Jordan, last thirty forty seconds for you, 0:14:24.800 --> 0:14:26.360 It's been a long day for you as you get 0:14:26.360 --> 0:14:29.440 into the weekend and probably looking forward to getting some sleep. 0:14:29.520 --> 0:14:32.240 What's top of mind for you, you know, next day, weekend 0:14:32.480 --> 0:14:33.320 Monday story. 0:14:34.320 --> 0:14:36.200 I think that you know, as I mentioned, lots of 0:14:36.240 --> 0:14:38.080 it technicians are going to be trying to fix these 0:14:38.080 --> 0:14:40.360 machines throughout the weekend and then the coming weeks. I 0:14:40.360 --> 0:14:42.400 think the biggest question is going to be for CrowdStrike, 0:14:42.720 --> 0:14:46.160 whether they will you know, outline how this this really 0:14:46.280 --> 0:14:49.640 bad little piece of software made it past their quality 0:14:49.680 --> 0:14:52.680 assurance program? Was there a quality assurance program? Did anybody 0:14:52.760 --> 0:14:54.520 look at this before it went out? That's going to 0:14:54.560 --> 0:14:55.600 be the next big question. 0:14:55.600 --> 0:14:56.200 You guys, rock. 0:14:56.360 --> 0:15:00.240 Thank you so much much. Bloomberg Intelligence Senior Tech Inustry 0:15:00.280 --> 0:15:04.320 Alas Mandeep seeing Bloomberg News cybersecurity reporter Jamie Terraby and 0:15:04.360 --> 0:15:07.960 Bloomberg New Cybersecurity reporter Jordan robertson everything you need to 0:15:08.040 --> 0:15:10.720 know about that was right there. 0:15:10.720 --> 0:15:11.400 I watched for the. 0:15:11.360 --> 0:15:13.200 Reboots in the lawsuits. 0:15:12.720 --> 0:15:15.640 Main takeaway from that t shirts hots being made. 0:15:15.720 --> 0:15:20.520 Right now, you're listening to the Bloomberg Business Week podcast. 0:15:20.720 --> 0:15:24.040 Catch us live weekday afternoons from two to five pm Eastern. 0:15:24.200 --> 0:15:26.600 Listen on Apple car Play and then Brout Auto with 0:15:26.600 --> 0:15:30.840 a Bloomberg Business app, or watch us live on YouTube. 0:15:31.440 --> 0:15:33.480 One other sector of the market that we've been watching 0:15:33.480 --> 0:15:36.480 closely today is the airline group. And I'm looking at 0:15:36.480 --> 0:15:40.200 the S and P five hundred supercomposite Airlines subindustry index 0:15:40.640 --> 0:15:42.640 was down almost two percent right now, it's up about 0:15:42.720 --> 0:15:46.760 nine tenths of a percent round noon today. The FAA 0:15:46.920 --> 0:15:48.880 put out a post on x David that the global 0:15:48.920 --> 0:15:52.080 IT issue could continue to affect flights this week, and 0:15:52.080 --> 0:15:54.080 that it's still working with airlines to kind of closely 0:15:54.120 --> 0:15:55.200 keep an eye on the issue. 0:15:55.320 --> 0:15:58.320 This is airlines begin slowly resuming some operations following that 0:15:58.440 --> 0:16:02.840 widespread global software melt down. Thousands of people delayed on 0:16:02.920 --> 0:16:05.880 canceled flights, likely to cascade through the systems for days. 0:16:05.960 --> 0:16:08.440 As the FAA said airlines stocks as a whole down 0:16:08.440 --> 0:16:11.000 one point nine percent earlier today. With more on this 0:16:11.080 --> 0:16:13.720 aspect of the global it OT outage story, we welcome 0:16:13.720 --> 0:16:16.520 in long time airline industry analysts planne Becker, TD Cowan 0:16:16.560 --> 0:16:20.680 Managing Director and senior research analysts. Let me just start 0:16:20.760 --> 0:16:22.720 big picture here. This is something I think it's safe 0:16:22.760 --> 0:16:25.200 to say the airlines must have been fearing, and just 0:16:25.240 --> 0:16:29.160 give us your perspective from your vantage of how disruptive 0:16:29.160 --> 0:16:31.280 and devastating this has been for airlines. 0:16:32.680 --> 0:16:33.880 Yeah, thanks for the question. 0:16:34.160 --> 0:16:38.680 So it disrupted operations as you noted, all day, and 0:16:39.480 --> 0:16:42.960 because there will be crews out of place, in aircraft 0:16:42.960 --> 0:16:47.120 out of place, it'll probably cascade into Sunday. I would 0:16:47.120 --> 0:16:51.680 say Friday and Sunday are probably the worst two days 0:16:51.720 --> 0:16:54.840 to have issues because those tend to be the days 0:16:54.880 --> 0:16:59.760 when we see the most number of people flying, especially 0:16:59.800 --> 0:17:04.399 as summer Friday. So I know the airlines were offering 0:17:04.440 --> 0:17:08.280 waivers if you wanted to change your plans, but pragmatically, 0:17:08.320 --> 0:17:10.840 if you're going on vacation today, you kind of want 0:17:10.840 --> 0:17:13.920 to go. 0:17:14.080 --> 0:17:14.399 That's. 0:17:16.640 --> 0:17:17.080 Yeah. 0:17:17.200 --> 0:17:21.120 So so I'm I guess you know, I'm hearing reports 0:17:21.240 --> 0:17:26.480 that air reports are starting to get aircraft out, airlines 0:17:26.480 --> 0:17:30.399 are getting air crept out. Yeah, obviously with massive delays. 0:17:30.480 --> 0:17:32.200 So I would say, before you go to the airport, 0:17:32.359 --> 0:17:37.159 check your flight status. But that said, they're going to 0:17:37.200 --> 0:17:38.840 do their best to get you where you want to go. 0:17:39.280 --> 0:17:42.200 Is there do you edicipate a kind of financial impact 0:17:42.200 --> 0:17:45.399 material impact here as of this out of this excuse me? 0:17:45.880 --> 0:17:50.120 Yeah, yeah, no, So we're going to treat it as 0:17:50.160 --> 0:17:54.520 if it was a storm, sort of a winter weather 0:17:54.680 --> 0:17:59.800 event or summer thunderstorm, and and there will be, you know, 0:17:59.840 --> 0:18:02.920 a little bit of an impact for sure, but we're 0:18:02.960 --> 0:18:03.840 early enough in. 0:18:03.800 --> 0:18:06.400 The quarter that they'll be able to recover. 0:18:07.119 --> 0:18:12.359 And also, since almost three million people are traveling on 0:18:12.440 --> 0:18:16.760 Fridays and Sundays these days, if you're starting your vacation, 0:18:17.160 --> 0:18:20.120 you're going to still persevere. And if you're ending your vacation, 0:18:20.240 --> 0:18:23.560 you obviously have to come home and seeing with a 0:18:23.600 --> 0:18:26.479 business trip, if you're ending a business trip, you have 0:18:26.520 --> 0:18:29.040 to come home. Not a lot of business trips start 0:18:29.119 --> 0:18:30.600 on Fridays. 0:18:30.320 --> 0:18:36.760 Fair enough, the good ones, Helena, I was thinking that far. 0:18:37.000 --> 0:18:38.960 Actually Farnborough starts Monday. 0:18:39.040 --> 0:18:39.480 There you go. 0:18:42.080 --> 0:18:44.160 Trips that started on a Friday or Saturday. 0:18:45.880 --> 0:18:48.080 I'm not going this year, but a lot of my 0:18:48.160 --> 0:18:50.600 friends we're leaving tonight. 0:18:50.520 --> 0:18:53.560 A few extra days in London, you know. I was 0:18:53.600 --> 0:18:56.040 just in Atlanta and while waiting for my plan, I 0:18:56.080 --> 0:18:58.320 looked over and I love when that there was a 0:18:58.320 --> 0:19:01.919 dot matrix printer at the gate. And I'm always so 0:19:02.040 --> 0:19:05.000 amazed at the longevity of the dot matrix printer, particularly 0:19:05.000 --> 0:19:08.920 in airports. But I bring this up to say, how 0:19:08.960 --> 0:19:11.000 old are these systems, how outmoded are these systems. If 0:19:11.000 --> 0:19:12.560 we're to step back and look at any kind of 0:19:12.560 --> 0:19:16.199 broader takeaways of what's happened here, does it say anything 0:19:16.240 --> 0:19:18.959 about how good this infrastructure is. We were talking earlier 0:19:18.960 --> 0:19:21.240 with men deep Singh just about how people are running 0:19:21.400 --> 0:19:23.280 all kinds of versions of Windows don't have they're running 0:19:23.280 --> 0:19:25.760 Windows ninety five. But no one's on the same thing 0:19:25.840 --> 0:19:27.480 or the most modern thing and I always feel that, 0:19:27.520 --> 0:19:29.720 particularly acutely when I'm at the airport. It feels like 0:19:29.760 --> 0:19:31.560 the systems that a lot of these airlines are using 0:19:31.720 --> 0:19:32.720 are pretty outmoded. 0:19:34.200 --> 0:19:38.679 Yeah, you know, that's another good observation actually, because Southwest 0:19:38.800 --> 0:19:42.400 was one of the least impacted airlines today and as 0:19:42.480 --> 0:19:45.879 most people know, they have one of the oldest systems 0:19:45.960 --> 0:19:49.959 out there. So thinking about it over the years that 0:19:50.080 --> 0:19:52.120 and you pointed out, I've been doing this a long time. 0:19:52.960 --> 0:19:58.680 Airlines were early adopters of technology, and then because of 0:19:59.359 --> 0:20:02.560 all the issues they had and the bankruptcy filings in 0:20:02.640 --> 0:20:06.520