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Press Release: CrowdStrike issues highlight perils of IT interdependency

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Press Release hub banner blue with title in red white and blueS&P Global Ratings said today that the wide-scale disruption caused by the software update launched by CrowdStrike Holdings Inc. highlights the risks to the global IT ecosystem arising from the interdependency of critical systems and software.

This event also underscores the concentration risk arising from the dominance of a few key vendors in the global IT ecosystem. We understand that CrowdStrike is actively working with customers impacted by a defect found in a content update for Windows hosts, and that Mac and Linux hosts are not impacted.

While CrowdStrike has indicated this is not a security incident or cyberattack and that they have identified, isolated, and are fixing the problem, the event has disrupted critical systems across a wide range of companies worldwide and we believe it has wide-ranging ramifications. Even organizations that do not directly use CrowdStrike may also have been impacted by third-party vendors/stakeholders that do.

Typically following an event like this, whether malicious or not, credit risks tend to rise from revenue loss and reputational damage, and longer term many companies will continue to incur costs to respond to and remediate impacted IT systems and business processes. With growing digitization, S&P Global Ratings believes these incidents may become more commonplace. Therefore, the ability of organizations to recover quickly and restore operations will be more paramount. Typically, defined business continuity and well-tested disaster recovery plans can mitigate the risk.

We will monitor any potential credit impact on rated issuers, including Microsoft Corp. and CrowdStrike, as events evolve.

This report does not constitute a rating action.

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S&P Global Ratings, part of S&P Global Inc. (NYSE: SPGI), is the world’s leading provider of independent credit risk research. We publish more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities. With over 1,600 credit analysts in 27 countries, and more than 150 years’ experience of assessing credit risk, we offer a unique combination of global coverage and local insight. Our research and opinions about relative credit risk provide market participants with information that helps to support the growth of transparent, liquid debt markets worldwide.

S&P Global Ratings is the world’s leading provider of independent credit ratings. Our ratings are essential to driving growth, providing transparency and helping educate market participants so they can make decisions with confidence. We have more than 1 million credit ratings outstanding on government, corporate, financial sector and structured finance entities and securities. We offer an independent view of the market built on a unique combination of broad perspective and local insight. We provide our opinions and research about relative credit risk; market participants gain independent information to help support the growth of transparent, liquid debt markets worldwide.

S&P Global Ratings is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence.

Featured image credited to Mary Kirby