Microsoft, CrowdStrike Hit Back At Delta’s Compensation Bid

Microsoft has suggested that the long recovery of Delta Air Lines systems was related to its old IT infrastructure – and not Windows, following the huge global IT outage last month.

The world’s largest outage took place on Friday 19 July and resulted in CrowdStrike’s CEO George Kurtz apologising when it became clear that a faulty content configuration update for CrowdStrike’s Falcon sensor tool had plunged an estimated 8.5 million Windows computers into a ‘Bue Screen Of Death’ reboot loop.

The flawed software update disrupted airlines, banks, hospitals, emergency lines and business operations around the world.

Delta’s recovery

The CEO of Delta,Ed Bastian, has previously told CNBC and other media outlets that the airline was facing a cost of up to $500 million due to the over 6,000 cancelled flights.

Last week the airline reportedly hired prominent attorney David Boies to seek damages from both CrowdStrike and Microsoft.

The Atlanta-based carrier is also facing an investigation from the US Department of Transportation amid claims of poor customer service over refunds, during the operational chaos and cancelled flights.

Delta seemed to have been impacted to a greater extent to other American airlines.

Two of its rivals, United and American were able to restore their operations in the weekend following the Friday outage, but Delta’s flight disruptions continued well into the following week.

Last week, Delta’s CEO Ed Bastian had told CNBC that while the airline heavily relies on the two tech companies, they had reportedly failed to deliver an “exceptional service.” In the interview, he also reportedly alleged that Microsoft had the “most fragile platform.”

CrowdStrike hits back

CrowdStrike has already hit back at Delta Air Lines’ threat of litigation, and denied it was responsible for the carrier’s own IT decisions and days-long disruption.

According to CNBC, Michael Carlinsky, CrowdStrike’s lawyer and co-managing partner at Quinn Emanuel Urquhart & Sullivan, wrote to Delta’s lawyer David Boies on Sunday saying that Delta’s litigation threats “contributed to a misleading narrative that CrowdStrike is responsible for Delta’s IT decisions and response to the outage.”

He said CrowdStrike CEO George Kurtz had reached out to Bastian to “offer onsite assistance, but received no response.”

“Should Delta pursue this path, Delta will have to explain to the public, its shareholders, and ultimately a jury why CrowdStrike took responsibility for its actions – swiftly, transparently, and constructively – while Delta did not,” Carlinsky’s letter was quoted by CNBC as stating.

CrowdStrike’s contractual liability is capped in the single-digit millions (i.e. up to $10 million), the letter reportedly added.

Microsoft response

And now Microsoft has also issued its response to Delta’s attempt to wring compensation from it and CrowdStrike.

CNBC reported on Tuesday Microsoft’s lawyer wrote that Redmond CEO Satya Nadella had actually emailed Delta CEO Ed Bastian offering help, but didn’t receive a reply.

Mark Cheffo, a Dechert partner representing Microsoft, reportedly wrote in a letter Tuesday to Delta’s attorney David Boies, that Microsoft is still trying to figure out why American Airlines, United Airlines and others were able to recover more quickly than Delta.

“Our preliminary review suggests that Delta, unlike its competitors, apparently has not modernised its IT infrastructure, either for the benefit of its customers or for its pilots and flight attendants,” Cheffo reportedly wrote.

Delta responded on Tuesday that it has “a long track record of investing in safe, reliable and elevated service for our customers and employees.

“Since 2016, Delta has invested billions of dollars in IT capital expenditures, in addition to the billions spent annually in IT operating costs,” Delta was quoted by CNBC in its response to the Tuesday letter from Microsoft.

CNBC also cited a 29 July letter, in which Delta’s Boies reportedly told Microsoft’s chief legal officer, Hossein Nowbar: “We have reason to believe Microsoft has failed to comply with contractual requirements and otherwise acted in a grossly negligent, indeed willful, manner in connection with the Faulty Update” from CrowdStrike that caused Windows computers to crash.”

Microsoft lawyer Cheffo reportedly wrote in his response that the company empathises with Delta and its customers on the impact of the CrowdStrike incident. “But your letter and Delta’s public comments are incomplete, false, misleading, and damaging to Microsoft and its reputation,” he reportedly said.

Cheffo reportedly said Microsoft will “vigorously” defend itself if Delta files a lawsuit, amid reports that the Delta’s crew-scheduling platform that matches crews to flights, was being serviced by other technology providers.

CrowdStrike meanwhile was sued last week by disgruntled shareholders, who allege the cybersecurity firm defrauded them by concealing inadequate software testing.