Microsoft 'deeply sorry' for global outage that could cost Australia billions

US software company Microsoft on Friday apologised for a widespread outage that disrupted millions of users, organisations and businesses around the world. In Australia, experts warn the consequences for the economy could be severe, with costs running into the billions of dollars and some small businesses possibly forced to close.

The outage began on Friday morning and lasted roughly 18 hours before services started to recover. The company says it was a technical issue, not a cyber-attack or something caused by AI agents, and that the underlying problem has been addressed. Services are being restored gradually to ensure stability. Microsoft has suggested the cause may have been problems with settings on servers that keep Microsoft 365 running.

Health, courts and government services hit in Australia

Ashwin Pal, a partner at risk advisory firm RSM Australia, said his clients had activated business continuity plans, but many businesses had no fallback. He said a prolonged event could be the final blow for smaller firms, and expressed surprise that a change that should have been tested was pushed out.

Prins Ralston, chief executive of the Australian Computer Society, said the outage exposed Australia's reliance on foreign technology. The society renewed its call for the federal government to urgently review which critical IT systems depend on a single provider.

Hospitals and clinics were affected. Dr Michael Bonning, president of the Australian Medical Association, said some facilities went back to paper prescriptions because prescribing software requires multifactor verification through Microsoft-supported email. The association said patient care was not affected. Courts in South Australia and Victoria, many schools and federal departments, including national security agencies, were also hit. Service NSW, the state's one-stop government services agency, urged customers to delay visits.

Effects elsewhere

In the UK, healthcare systems were disrupted and several police forces asked people not to report crimes online. US government offices, including congressional offices, had problems with Outlook email. In Japan, shipping company Sagawa Express could not accept some online reservations, and pharmaceutical firm Taisho handled orders by phone. Microsoft shares fell 1.1% to $516.86 when Wall Street trading opened.