The Microsoft Outage - A Lesson For The City in Concentration Risk

As Crowdstrike’s share price continues to slide today, Microsoft is doing its best to distance itself from the massive outage of 8.5 million Windows devices.

The funny thing is, I was penning a piece for you on how smug Microsoft has been of late due to its success in marketing Copilot, its AI tool. Almost every pub conversation has graduated from “are you using AI?” to “have you tried Copilot?”

Microsoft – for the first time in years – has actually done a thing. It has made an original product that is useful and better than many others. In my opinion, it’s the first time in years. There is a cute little smile on the faces of those running sales for the company.

But the outage above is a warning shot to the City – one that regulators are keenly aware of: concentration risk. That is the over-reliance on one area of the business to perform. And if that were to fail, it would be catastrophic.

If the world were made pure by cloud providers, they would each have you ‘cloud native’ – that is 100 percent committed to their product, environment and their way of doing things.

Regulators and anyone sensible in system design would veer away from this approach. While it’s easier to implement, it is highly risky in the event of a massive outage like the one above.

The damage of the outage is long term for Microsoft. It is a master of dealing with blue-screen shit-storms that blow over quickly. But this will now have boardrooms questioning their alternatives, redundancy and failover strategies more than Microsoft would like.

Not so smug this week then, eh?

Article re-penned.

Now – please go and fill in the Growth Blockers Survey for H1 and I’ll buy you a coffee next time we meet. If you already have, thank you.

Dan