A large-scale outage wrought havoc on IT systems, causing travel delays at Sydney Airport
A large-scale outage wrought havoc on IT systems, causing travel delays at Sydney Airport. AFP

As the impact from the IT glitch caused by CrowdStrike's software update could linger on for weeks, experts believe the damage is likely to surpass AU$1 billion, with businesses exploring options to seek compensation.

The IT outage, last Friday, affected government agencies, servers and businesses across the globe, following a security software update by the US-based CrowdStrike. The Windows-based computers displayed the "blue screen of death" on restarting after the software update.

Australia's Home Affairs Minister Clare O'Neill said the impact caused by the outage could last "one to two weeks," and industry Group CEO Innes Willox estimated the damage bill to run into billions of dollars. However, he added that it was still not clear how the businesses could claim compensation from the company, ABC News reported.

"It's impacted different businesses and different sectors of the economy in wildly different ways, and the reality is we're going to be seeing the tailpipe of this for weeks to come," Willox told The Business. "Whether there might be some federal government scheme in place to help businesses seek redress, or if businesses are going to have to deal directly with CrowdStrike to try to work through compensation through their insurance [is still unclear]."

Wedbush Securities technology analyst Dan Ives pointed out the CrowdStrike's brand image has been hit, and the company will have to face scores of legal action.

"There's brand damage here. This is something that's going to be going for months, potentially years," Ives said. "I think if you're a CrowdStrike lawyer, you're not really seeing a beach the rest of the summer."

Businesses in New South Wales alone could amount to AU$200 million bill in damages, according to the News.com report.

Under Australian law, compensation claims can be made on the grounds of failure of any major product. Due to CrowdStrike's IT outage, more than 5,000 flights worldwide were grounded.

It also raised the issue of individual damages as thousands of travelers were caught in the chaos. As in the case of oncology nurse Felicity Sims and her family, who were stranded in Bali after their Jetstar flights were cancelled. The airline company has offered free flights and ticket refunds to its passengers.