Last week the world had a taste of the kind of chaos which was predicted, but failed to eventuate, 24 years ago. This time the millennium bug couldn’t be blamed. Instead, a tiny human coding error temporarily paralysed banks, airports, media outlets and other organisations around the planet, connected by the cloud of data that binds us all.
The Texas-based company responsible, CrowdStrike, are disruptors – part of the ‘move fast and break things’ school of business management. Until recently this worked in their favour. Since their emergence in 2012 they have become the dominant cybersecurity firm globally, financially underpinned by major institutional investors including Google, the Vanguard Group and BlackRock, who between them own pretty much everything.
CrowdStrike’s signature software, Falcon, gained market share over its competitors by digging deep into its host networks, deeper than potential attackers, making it a popular choice for systems related to industries such as banking, transportation, healthcare and education. In Australia, CrowdStrike have held a number of major government contracts, including with the Department of Defence, since 2019.
The company’s slogan is ‘we stop breaches’, but last week’s global meltdown showed the risk of putting too many eggs in one IT basket, with a tiny patching error in Falcon temporarily disabling at least 8.5 million computers running Microsoft software; freezing airports, forcing broadcasters off the air and disabling large parts of the cashless economy.
Danger, Will Robinson
As the scale of the emergency became clear, Prime Minister Anthony Albanese took to X (formerly Twitter) to declare that he understood ‘Australians are concerned about the outage that is unfolding globally and affecting a wide range of services.’
He said his government was working closely with the National Cyber Security Coordinator, later adding, ‘There is no impact to critical infrastructure, government services or Triple-0 services at this stage. The National Coordination Mechanism has been activated and is meeting now.’
It was ironic that Mr Albanese chose a private platform owned by another eccentric billionaire, Elon Musk, to communicate with the Australian people, rather than the ABC, further underlining the problem of outsourcing critical functions to private enterprise. Like CrowdStrike, X has no enforceable public duty.
As for the National Coordination Mechanism, this is a fancy name for a collection of state and federal government reps, along with unidentified ‘industry and private sector stakeholders’. The idea began with COVID, but in this case it appears they had no more control over the unfolding situation in the global cloud than did National Cyber Security Coordinator Lieutenant General Michelle McGuinness.
There was one Australian at the heart of last week’s disaster, namely CrowdStrike’s president since 2023, Mike Sentonas, who personally lost $30m in share value in a single day last week, when CrowdStrike’s shares plunged. No doubt he will be hoping the world has a very short memory, and the company will be raking it in again soon.
For the wider world though, the problem remains. Crucial technology is entirely out of the control of governments.
Australia calling
A sad example of this is Telstra Research Labs, which until its closure in 2006, at the hands of Sol Trujillo, employed many of the top minds in telecommunications and related fields.
In various incarnations, these people were responsible for developing crucial technologies over many years, including WW2-era radar, the bionic ear and the cochlear ear implant, termite-resistant cabling, the first local fax service, the optical fibre cold clamp, the first system to route calls depending on the caller’s location, and the first Australian public TV broadcast.
The former staff of Telstra Research Labs are now retired or scattered around the world, mostly in the private sector, their collective wisdom lost to Australia. Telstra is now completely privatised, and Australia has become a telecommunications customer, instead of being an innovator.
Telstra has also invested in CrowdStrike.
In the USA, a large sector of the taxpayer-funded government space program has been outsourced to a company controlled by an unstable genius who is supporting a man who tried to destroy American democracy, and this very column is being brought to you this week (from a remote bush location) by technology from another company owned by that same individual, with Telstra no longer up to the job of connecting its own citizens.
What to do?
Originally from Canberra, David Lowe is an award-winning film-maker, writer and photographer with particular interests in the environment and politics. He’s known for his campaigning work with Cloudcatcher Media.
For four decades The Echo has printed the stories some people loved, some people hated, and some pretended not to read. If you want us to keep telling the truth, the real truth, not the sugar-coated version. We’ll need your support to keep the presses rolling. 
