While businesses in the US and Europe awoke on Friday to a global IT meltdown that shut down administrations, airports, and hotels, China entered its weekend largely unaffected.
KEY FACTS
- The problem turned out to have come from a software update from Texas-based cybersecurity company CrowdStrike, which generates more than half of its revenue from the United States. The company’s technology is used by many of the world’s largest banks, healthcare and energy companies.
- “The impact of Friday’s incident on China was very small, with almost no impact on local public life,” said Gao Feng, senior research director at Gartner. “Only some foreign companies in China were affected.”
- “The main reason is that domestic Chinese companies do not use CrowdStrike products, so they are not affected,” Gao said. “CrowdStrike’s customers are mainly concentrated in Europe and the United States.”
- Anecdotally, ride-hailing services, e-commerce and other internet-related systems in China were running smoothly on Friday. Chinese state media also said Friday evening that international flights at Beijing’s two airports were operating normally and that Air China, China Eastern Airlines and China Southern Airlines were not affected by large-scale technical system failures.
- One of the most notable impacts of the IT outage – including in China – was on Microsoft Windows devices trying to integrate an update to CrowdStrike’s Falcon product, resulting in a blue screen and computer reboot cycle.
- Microsoft products are widely used in China, with Windows accounting for about 87 percent of PC shipments on the mainland last year, according to Canalys. This is higher than the share of 79% for the rest of the world in the first quarter of this year.
- Microsoft Office 365 products and the Azure cloud service are operated in China by a local company called 21Vianet. It is not yet clear whether localization contributed to the limited impact of Friday’s crash.
WHY AREN’T CHINESE COMPANIES USING CROWDSTRIKE?
In recent years, the US and Chinese governments have forced domestic companies to use proprietary technology and store data locally for national security reasons.
Canalys pointed out that the Chinese-made UOS, or Unity operating system, has seen growing adoption among state-owned enterprises and government sectors, although Windows still dominates the domestic PC market.
“There is very little impact because CrowdStrike is hardly used in China,” said Rich Bishop, CEO of AppInChina, which publishes international software in China.
“That’s partly because many of the security threats that CrowdStrike is designed to protect against come from China,” he said, adding that Chinese companies typically use products from Tencent, 360 and other businesses.
