Microsoft is counting the cost of last week’s major website outage.
Following last week’s outage of Microsoft’s websites, the company is now counting the cost of the problem and trying to ensure it doesn’t happen again. The problems, affecting Microsoft.com, MSN.com, Hotmail.com and MSNBC.com among others, were caused by an engineer changing a network router’s configuration. This made Microsoft’s DNS (domain name system) servers – which map website addresses to computers – stop working, in turn making the sites effectively inaccessible.
The press was quick to speculate that the company’s network had been hacked. It’s no surprise Microsoft vehemently denies this. External security breaches are expensive for firms both in terms of revenue lost, but more importantly in terms of reputation. Once corporate reputation and customer trust are lost, they are particularly difficult to regain. By claiming so quickly that it had not been hacked, Microsoft hoped to avoid this problem.
But it may have fallen into another trap. When considering using an Internet-based service (e.g. email, eBanking or ASP), the public also needs to consider the danger of incompetence from within the business. Indeed, research shows that the majority of unauthorized access breaches occur due to employees, often as a result of incompetence. The knowledge that this is what affected Microsoft will not set customers’ minds at rest.
Worse for Microsoft, the outage came just after the $200 million launch of its new .NET strategy. This is designed to catapult the company into the enterprise space currently dominated by Sun, Oracle and IBM by delivering software as a service via the Internet. Yet if customers were relying on the delivery of critical applications online and last week’s problems were to occur, the service’s future would be jeopardized. The .NET strategy could be a masterstroke from Microsoft – but it’s becoming clear that it is particularly risky.
Microsoft may get the benefit of the doubt this time. But, especially when firms start being highly reliant on .NET applications for day-to-day business, any such future problems are likely to seriously affect the company’s success.
