When Information Systems Fail: Financial Consequences of the Global CrowdStrike IT Crash for Users and Software Providers

The accelerating digitalization of industries has increased systemic exposure to IT disruptions. This study analyzes the financial effects of the CrowdStrike software outage, which caused widespread operational failures, particularly in the aviation industry. Using an event study approach, we examine abnormal returns for affected firms and the software provider, indicating who has to carry the financial consequences. The results show significant short-term losses for aviation firms and a persistent decline of over 18 percent in the provider's market value. Despite no malicious intent, markets reassigned responsibility toward the software provider. These findings suggest a shift in investor expectations regarding digital resilience. The study introduces the concept of a digital black swan to describe high-impact, non-malicious IT failures. Our findings extend information systems research with corporate risk management for digital infrastructure. As digital technology becomes more system relevant in business models, understanding and managing such risks becomes increasingly vital.