How the Microsoft outage will affect businesses—and their budgets

A slew of employees saw their work DMs go quiet yesterday after Microsoft experienced a widespread outage impacting millions of users across 74 countries.

For businesses, this meant a pause in essential tech infrastructure, spanning services like Teams, Outlook, and Microsoft’s AI assistant, Copilot. People reported varying levels of disruption to email, online calendars, and other software.

Revenue Brew asked experts what the outage means for essential revenue operations and delivery, especially at smaller- and mid-size enterprises.

“Microsoft 365 has become the plumbing of the working day,” said Luke Kehoe, lead industry analyst at connectivity intelligence firm Ookla in an email. “So when it fails, the damage runs well beyond email.”

Mission critical

While Microsoft says nearly 430 million employees worldwide rely on its technology, a precise figure on those affected is hard to quantify. According to Kehoe, tracking website Downdetector received more than 7.3 million reports about Microsoft services worldwide, about half of them from the US, where reports peaked at more than 14,000 a minute on Thursday afternoon—though the real total is likely much higher. (Downdetector is owned by Ookla, a subsidiary of Accenture).

In 2024, a similar outage of CrowdStrike’s cloud services resulted in widespread productivity disruptions and estimated insured losses of up to $1.5 billion. That outage was caused by a faulty software update and affected millions of Windows devices, spanning from corporate communications to airline scheduling.

Kehoe said, “on Thursday afternoon and evening, US reports about Gmail ran at more than 60 times their normal level, most often about messages not arriving, which fits mail to and from Microsoft-hosted addresses getting stuck. Reports about Zoom rose about 50-fold and Slack about 20-fold, as teams looked for other ways to meet and talk.”

It’s unclear how much businesses can expect to recoup. The outage was caused by a technical issue, not a cybersecurity attack—which is what many businesses are actually insured against.

Contingency planning

Cameron Crowell, a Managing Director in FTI Consulting’s Cybersecurity practice, said in an email that business impact also depends on preparedness. “Companies that regularly test their business continuity and incident response plans, establish alternate communication channels, and identify their most critical business processes are generally better positioned to minimize disruption,” he said. This means prioritizing limited resources and implementing manual workarounds that help get customer and business operations back on track quickly.

In a thread posted to X, Microsoft said the root cause of the outage was an increased load on its tech, which wasn’t “driven by an increase in traffic, but by a number of servers being unexpectedly unavailable; straining the remaining infrastructure.” The company said it has since seen recovery across the affected regions, with email service “approaching normal levels,” but some users may temporarily experience delays.

The road ahead

Overreliance on any suite of business-essential tech tools will be a heightened concern after this latest outage. In a rapidly evolving space that offers myriad standalone tools and bespoke solutions, mixing and matching could be one way businesses can hedge against the risks brought by a single vendor ecosystem. This naturally brings its own considerations, such as change management concerns, implementation costs, and proof of ROI. Revenue Brew will cover the story with interest. In the meantime, there’s more food for thought on your tech stack here, here and here.