• Analysis
Microsoft Global Outage Could Cost Australian Economy Billions, Experts Warn
Experts warned the Microsoft global outage, which disrupted millions of users for roughly 18 hours from Friday morning, could cost the Australian economy billions of dollars and force some small businesses to close, as Microsoft apologised saying it had 'addressed the underlying issue'.
Economists and technology specialists warned the disruption may leave costs running into the billions of dollars, with smaller firms the most exposed. Ashwin Pal, a partner at RSM Australia, said many businesses had no fallback plan and that the smallest operations faced the gravest danger of closure.
"A protracted event like this can easily be the straw that breaks the camel's back for smaller entities."
Microsoft apologises as services recover
The company said it was 'deeply sorry' and that it had addressed the underlying issue, describing the failure as a technical problem unrelated to cyber-attacks or AI agents. Microsoft suggested the fault may have stemmed from problems with the settings applied to servers responsible for keeping Microsoft 365 up and running.
Charles Lamanna, Microsoft's executive vice-president of Copilot, said the company was working to fix the disruption.
"We regret that today's outages caused disruptions for our customers, and we are working to address the issue."
Investors reacted modestly: when Wall Street opened, Microsoft shares dipped 1.1% to $516.86.
Health, courts and government hit across Australia
Hospitals and health clinics were among the affected organisations, though the Australian Medical Association said on Friday there had been no impacts for patient care. AMA president Dr Michael Bonning said authentication that relies on Microsoft-supported email had pushed some facilities back to older methods.
"We've had some facilities return to using paper for scripts."
The public-sector fallout extended well beyond health services:
- •Courts in South Australia and Victoria reported their email systems were affected.
- •Many schools nationwide were hit by the disruption.
- •Service NSW encouraged customers to delay their visits to its service centres.
- •Federal government departments were affected, including national security agencies.
- •Asio head Mike Burgess said the spy agency's systems, which operate on multiple levels, were affected 'on one level, yes, but not completely'.
Global ripple and calls for a resilience review
The disruption was not confined to Australia. In the UK, healthcare systems were affected and several British police forces urged people not to try to report crimes online and to phone them in instead. In the United States, congressional offices reliant on Outlook were hit, with the House's chief administrative officer sending out a 'campus-wide alert' to staffers on Thursday, according to Politico. In Japan, Sagawa Express was unable to accept online reservations for some of its airport and train station services, while Taisho handled orders by phone.
The Australian Computer Society urged the federal government to urgently review which critical IT systems rely on a single provider, saying the outage exposed the country's dependence on overseas technology suppliers. ACS chief executive Prins Ralston said people affected by the failures had reason for concern.
"Australians who couldn't get paid, couldn't send an invoice, or couldn't reach a government service this morning are entitled to be worried."
Services were being gradually restored after roughly 18 hours, with Microsoft saying it had addressed the underlying issue.
