Outlook outage expected to cost Australian businesses billions of dollars

The Microsoft outage is calculated to cost Australian businesses billions of dollars, with experts warning small businesses will be the hardest hit by the technology failure.

A widespread outage, which started about 3:15 am AEDT, has hit platforms including Outlook, with many users having trouble accessing emails and encountering errors across the Microsoft suite of products.

Workers across multiple types of businesses have reported being unable to access email or SharePoint, with some resorting to using fax machines to keep operating.

RSM Australia Risk Advisory partner Ashwin Pal said the cost to professional service businesses, such as lawyers or accountants, would be hundreds of thousands of dollars per hour.

"It's not just the initial downtime, it's more actually about then the catch up effort because that costs money," he said.

"Because now when things do normalise, you're going to have to spend money to actually catch up because of all the backlog."

He said the impact of the outage was amplified by the 3.9 million businesses globally that used the Microsoft suite, with many not having backup systems, resulting in huge costs to the economy.

"This is what happened with CrowdStrike. So when the outage happened, because of where we are in the world in terms of time zones, we felt the impact first."

"As the US and Europe come online, and they can't operate, it's going to get worse. So you're going to have a multiplier effect."

He said the repercussions would be most keenly felt by small businesses, due to operating on thin margins.

"You take a CBA as an example, they'll be able to absorb an impact like this a lot easier than the five-person accounting shop down the road," he said.

"They were already actually working on very thin margins. All of a sudden they're actually out for three, four, five days or whatever it takes for them to recover. That could be the final straw."

Paying staff to do nothing

Owner of small Queensland business Regal Shower Screens, Tracey Tucker, said the lost day of business would cost at least $30,000, but there were numerous flow-on effects.

"I'm paying my girls sitting in here in the office to do nothing," she said.

"The phone rings, they can't order anything."

"Then it puts undue pressure because if it's back online on Monday, everything we missed Friday, we're going to try to catch up on."

She said the outage meant the business would struggle to meet its promoted deadlines because the glass manufacturers would also be inundated on Monday.

"It's going to put pressure on everybody down the track because our girls are going to get yelled at, like, 'You just said my shower's going to be two weeks now, it's two and a half weeks', all because we can't send the order through today."

Hacking risk with firewalls down

Service delivery manager with telecommunication company Hubify, Chloe Mombeshora, said she had received numerous calls from less tech-savvy clients who were unsure what was happening.

"They're thinking that their internet is down, they don't know what to do," she said.

She said the business was concerned that with Microsoft Defender down, they were unable to monitor for any malicious activities, adding the inability to communicate could impact the business's reputation.

IT support specialist James Coates said he had been inundated with requests for help but was unable to reply through his helpdesk because it used Outlook.

"We actually have to call each client individually, every single personal phone number, every single Teams number, hope it gets through and update them that way because the email service is just not working on their end either," he said.

He said he also could not do other work over concerns it would not be saved.

Firms to reconsider Microsoft products

Liam Jones from the Australian Chamber of Commerce & Industry said the outage would have some businesses reconsidering using Microsoft.

"This is a reminder of just the increasingly digital nature of the modern economy and disruptions like this can occur."

"They need to be worked through. We need to get to the bottom of what's occurred here and work out steps to ensure that disruptions like this don't occur into the future where they can be avoided."

He warned there would be ripple effects.

"But this is the digital world. This is the digital economy in which we live," he said.

Australian Industry Group chief executive Innes Willox said the outage demonstrated how important technology was to the modern economy, especially on a Friday when many hybrid workers would work from home.

"What the outage tells us is that technology is great until it isn't," he said.

He said the biggest issues would be communication and delays.

"Time is money and that disruption will be very difficult for some businesses, more difficult for some than others because it will represent lost opportunities," he said.

"So it's too early to even contemplate the impact, but this has global ramifications so it will lead to a significant downturn in productivity as well. And that will be of concern at a time when we need to drive productivity as much as possible."